For years end users have been rewarded for remaining loyal to certain brands and companies with reward programs. Now vendors are realising that resellers are just as important in this process and offering them programs to keep their business.

It’s no secret that the printer consumables market is very a competitive one and according to Penfold’s Research in 2007, of the $11.81 billion that the office products industry represents around $2.5 billion of that accounts for computer consumables- over 20 per cent of the total market. Considering the number of OEMs, distributors and sub-distributors that are inthe channel, vendor’s have had to come up with new ways of keeping customers loyal and it would seem that reward programs are the plat du’jour. Like them or loath them, reward programs are here to stay especially considering that they are present with in most industries today including airlines, supermarkets, car parts and of course credit cards.

In August of last year HP launched its`Supplies Rewards’ program for resellers who purchase genuine HP consumables. “This program was set up in an attempt to get resellers, no matter what their size, involved with HP,” said Jason Su, HP South Pacific market development manager. “We also have our `Supplies Channel Health’ program which is open to resellers who purchase in excess of $100,000 per year but with this new program it has opened up avenues to smaller players which is fantastic for us.”

This program was intended to run for trial period for six months but Su stated that due to the popularity of the program, the vendor would keep it running for a lot longer than that initial period. “Since we launched the program the number of resellers that have signed up have been higher than expected and the responses that we are hearing are very positive. The program is free and it offers our resellers something for nothing, which in this day and age is a huge bonus. We have really focused on offering members, top quality lifestyle orientated products and vouchers,” said Su. “By providing quality prizes at the lower end of the price scale as well as excellent products at the higher end, the program offers something for everybody but the trend that we are seeing however is that members are saving their points to get a high end prize.”

Another relatively new program around is Lexmark’s STAR (Supplies Target and Rewards) program, which was unveiled on 1 July last year. In a statement released by Lexmark, it says that the company is focused on offering resellers the “best possible deals including access to exclusive promotions, use of the Lexmark authorised supplies partner logo and special pricing”. The goal of this program is to broaden the distribution of Lexmark genuine supplies, there by offering customers greater choice when purchasing.

While some manufacturers are unveiling programs others are looking at how their program can better serve its customers which sees Brother making changes to its current scheme. The `At Your Side’ program is currently under going a little bit of a face lift so that going forward it will be able to offer members of its program a little bit more. “At the moment we are looking at ways to help resellers combat things like Fringe Benefit Taxes and offer cash awards that may help with the running of their business,” says Heidi Webster, Brother’s marketing specialist IT and Office Products.

“At the moment the program is available on purchases of our laser categories and acouple of labelling lines, and we are finding that our resellers are happy with the current arrangement.” The way that the Brother program differs in relation to others is that is more an incentive based program that rewards resellers on their sales. Given three months to reach their goal, resellers can then claim their award and also go into the running for a major quarterly prize, an incentive inside the incentive. As Brother just celebrated its 100th birthday the last prize draw saw 10 lucky people head off on a five-star holiday to Japan.

“We set targets for our members to reach, which to be honest are extremely obtainable, and that way we make sure that when they are selling products our brand is fresh in the mind of the sales person. Although it is a reward there is still that responsibility there that the job has to be done as well. Yes the rewards are there if targets are met but if you fail to reach the goal then you lose whatever points you have and have to start again. We find that this is a good way to keep resellers motivated and the redemptions that are available are all excellent prizes that sell themselves.”

But it is not just manufacturers that are getting in on the act, some distributors have also come up with their own rewards program which reward customer loyalty rather than brand loyalty. Melbourne based distributor Tonnex launched its program, Reseller Rewards, in February 2007. Currently there are over 1000 dealers signed up to the program with many more to come, especially after a recent deal with the Office National group.

“Our program was launched to reward our customers no matter what brand they purchase,” said James Rendell, Tonnex’s national marketing manager. As one of the first rewards programs in the industry, Tonnex has used it to benefit members in many varied ways from promotions to the issuing of bonus points.

“The key for us was simplicity and value. If a customer has to spend $1 million to get a set of golf balls then they are not likely to be motivated. Likewise if they have to put in too much effort to participate then this again is less than inspiring. It must be achievable, it must be engaging, and it must be attractive,” Rendell says.

“We have tried to cater to everybody’s tastes by including everything from homewares to push bikes to power drills and kids toys. But by really focusing on the type of rewards that we offer, the reseller is certainly getting more for their dollar with our program.”

Not all vendors though are sold on rewards programs, with many still believing that offering excellent products at excellent prices is a better way to do business. A spokesperson from Ricoh said that while it can understand how programs like rewards can be attractive to resellers, the company was happy to continue dealing with resellers and concentrate on offering better rebates.

Another manufacturer that shares this belief is Epson. Mike Pleasants, director of marketing communications at Epson said, “Epson provides incentives and rewards to resellers who buy consumables direct from Epson. These are negotiated individually with each reseller. Epson has no generic reseller rewards program.”

So with all of these programs and many more out there, what advantage do they offer resellers when it comes to using the points or awards accumulated? Richard Brown of Rosebud Stationery and Office Supplies on Victoria’s Mornington Peninsula says that being able to pass on prizes to performing staff is an excellent way to keep them promoting the products.

“If my staff are aware that if they sell more of a particular brand there is a chance that the incentive on offer will be a worth while one receiving. It can motivate them (the staff) which in turn can only help business. The other use that we get from these programs is that we can leverage the points to use in a promotion to our customers. If we can promote that if you buy your products through us then you have a chance at winning something like a flat screen TV, then there is definite value in using the programs.”

The idea of getting something for nothing these days is an attractive one, especially considering economic climate in which we are in. One thing remains clear though, and that is that resellers are certainly better off with these programs in place. The added competition vendor’s face when it comes to promoting their product has forced them to generate ideas that can benefit the dealers out there. Even as things start to slow down the prospect of getting a reward could just be the tonic that it needed to give a business a little push back on track.

Ref: 46255474 Copyright Agency Limited (CAL) licenced copy

Stationery News

January, 2009

Page: 16

General News

Region: National

Type: Magazines Trade

Monthly