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How Much Do You Incentivize Your Vendors?

Posted by Robert McFarland

It’s extremely important to build relationships with your vendors and others around you who can bring in new customers and clients.

The people you work directly with on your products and services are really the ones with the most to gain when you have success. By taking the time to learn how you can benefit them, you’ll find a whole host of opportunities you didn’t realize were there.

When you offer your vendors rewards for helping grow your business, everyone wins. One of the ways you can equip your vendors to help you is by offering performance-based incentives that are much larger than their normal charges.

Here’s the step-by-step process to putting together a partnership with a vendor:

  1. Offer an incentive based on performance to all the vendors you work with. Let them know you will make it worth their while to help you bring in new business.
  2. Put together a generous incentive plan by looking at the situation from your vendors’ perspective. Use suggestions from your vendors to make it as attractive to them as possible.
  3. Make the incentive plan clear, concise, and easy to track. You can even publicize results among your vendors to encourage competition and therefore higher performance levels.
  4. Give your vendors more of the profit from the initial sale in order to incentivize subsequent sales, so you can make higher profits off the back end products. As a result, this arrangement will allow you to encourage future sales, upsell better and more profitable products/services, and cross-sell additional products.
  5. Create an incentive plan that’s irresistible to your vendors by offering generous, exclusive compensation.

Think of all the vendors you work with and the creative ways you can put together an incentive plan that entices them to be part of your business. If you use their talents, capabilities and connections, you’ll both be winners.

Putting together an incentive plan doesn’t have to be a complicated process. Use our GUIDED TOUR to come up with some great ideas and put your incentive plan together for maximum results.

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