How often have you received a survey or offer, either through snail mail or email, asking for some of your time and energy, and promising some minimal reward in return? How often do you actually follow through on any of those offers? 

Such is the result of constantly being sold to. The fine print is simply too complicated to sift through, the rewards too meager. As a result, the offers aren’t worth our time. And this promotion fatigue isn’t limited to any particular industry, or even to the B2C space.  

Just like the everyday consumer, for smaller dealers and auto repair shops, time and resources are precious commodities. These businesses juggle tight schedules, limited staff, and the constant need to keep up with industry demands.  

When OEMs and large distributors roll out channel programs, they’re intended to benefit their down-channel dealers. But if these programs are onerous or complicated, they can feel more like a burden than an opportunity. Complex registration processes, unclear program benefits, and cumbersome reporting requirements are just a few of the barriers that can leave smaller dealers feeling frustrated and disengaged. In many cases, they can even lead to non-participation. 

Instead of bolstering collaboration, overly complicated programs risk alienating the very dealers they aim to support. To gain real buy-in, auto OEMs and distributors need to step into the shoes of their smaller dealers and design programs that prioritize simplicity, transparency, and efficiency.  

What We’ve Found 

For our report “Small Shops, Big Impact: Driving Loyalty in the Auto Aftermarket, we surveyed hundreds of smaller dealer managers, auto repair shop owners, and automotive technicians, to learn what their main pain points are, and how they feel generally about incentives. 

What we found is that these dealers, who deal with end-user customers in the day-to-day trenches of your channel, strongly prioritize simplicity when it comes to their channel incentive programs.  

In fact, when asked which factors most influence their participation in these programs, the top two answers were “ease of use” and “easy to understand”, with 50% and 57% respectively citing these factors as either influential or highly influential.  

These owners and managers are speaking pretty clearly about what moves the needle for them when it comes to incentives. They want programs that are simple and straightforward, from sign-up to redemption, during login and for rewards, and everything in between. 

Unfortunately, it doesn’t seem like that’s what they’re getting. When asked to name their top incentive program challenges, some of the most cited answers were: 

• Complex program requirements (42%) 

• Difficulty tracking and redeeming incentives (33%) 

• Administrative burden (33%) 

These point to significant issues and a general disconnect when it comes to program design in this space. This is leading smaller dealers and shops to gravitate towards the more basic incentive types, such as volume discounts and consumer rebates. 

Perhaps the most telling stat, though, is that nearly half (48%) of these down-channel partners aren’t engaged in any type of incentive program at all. We think program complexity might be a big reason why. 

The Opportunity 

There are a number of areas throughout a program where you could take steps to simplify or optimize things. This will depend on the type of program or promotion you’re running, but could run the gamut of: 

• Program rules and requirements are too confusing, complex, or lack flexibility 

• Communications are unclear or unhelpful 

• Training resources and learning materials are minimal or unengaging 

• Marketing/sales support is insufficient or inconsistent 

• The claims and redemption processes are burdensome and have too much friction involved 

• The rewards structure is poorly designed and/or convoluted 

We’ve highlighted one example of channel complexity in a previous post on MDF and Co-Op. In this case, your down-channel dealers might be looking for an off-the-shelf promotion that requires minimal marketing resources on their end to help sell your products.  

If they find themselves having to do too much of the legwork for you, they’ll simply turn down the funds being offered to them. In other words, they’re looking at free money, and saying “thanks, but no thanks”—because it’s literally not worth their time. 

Alternatively, if you can provide the necessary enablement and support for your dealer network, not only can you improve the engagement of your existing partners, you can also increase the overall participation rate throughout your channel. And when there’s an opportunity to potentially double your audience, small changes can lead to big gains. 

The Solution 

Looking back at the bulleted issues above, it’s clear that opportunities abound when it comes to providing a more engaging channel incentive program. Just to give some high-level examples, you could start by: 

• Creating a simplified program rules structure 

• Reducing requirements and/or offering more flexibility 

• Providing clearer, more direct communications 

• Following best practices with your training resources 

• Gamifying learning materials 

• Providing more accessible marketing/sales support 

• Reducing friction and lessening the burden during the claims process 

• Establishing a more streamlined redemption process 

• Simplifying the rewards structure 

But to solve challenges like these, you also need to put yourself in your dealers’ shoes. Let’s return for a moment to the challenges with MDF and Co-op. Imagine you’re a small dealer manager or repair shop owner. Your time and resources are limited. What sales or marketing support would you need to make any extra promotional efforts worth your while? What would turn you off from taking advantage of this support? 

Maybe your dealers would be more inclined to use your marketing materials if a representative visited them at their physical location, providing some brief training on how best to stand up these materials. This could be effective whether the materials were analog or digital.  

If this isn’t logistically possible, you could offer a simple instructional video—one that’s gamified and/or incentivized with rewards to encourage follow-through. We touched on the importance of channel partner training in a previous post, but it’s worth mentioning again. 

In our Auto Aftermarket report, we also cited a side-by-side example of a complex vs. a more streamlined channel incentive promotion. In the simplified version, your channel dealers are provided with: 

• A longer promotional period  

• In-store POS materials produced by the manufacturer or distributor 

• Clear instructions and communications directed at the managers, salespeople or technicians 

• Online (video-based) training modules that are fun, easy, and engaging 

• Rewards along the way (steps-to-the-sale incentives), and perhaps even a tiered rewards structure for more ambitious dealers 

• Tech-forward tools like a program app that allows for easy scanning and uploading of invoices. You could also put these tools in the hands of your technicians or counter salespeople, further reducing the burden on managers and owners. 

These are just a few examples. But with a variety of stages throughout your program that are worthy of a review, this clearly leaves open opportunities for optimization no matter your budget or bandwidth. Of course, you’ll need to zoom out and take a more holistic view of your channel.  

To do that effectively, though, and to truly add value, you need to listen to your downstream dealers and find out what’s driving them to—or away—from your program.  

Conclusion 

In an increasingly complex world, there’s a growing consensus that simpler is better. Sure, we’re all getting more competent at multitasking. But there’s also a limit to how many tabs each of us wants to have open in our brain at one time.  

If you’re a smaller dealer or shop owner, you’re not going to prioritize a channel incentive if it takes up too much of your time, energy, and resources. And you almost certainly will choose to opt out if you’re not finding a clear value-add for your business. 

But when programs are engaging, easy to understand, and participate in, they can become tools for organizational growth and empowerment, rather than obstacles. In the end, this is what creates stronger, more productive partnerships throughout the automotive supply chain. 

Now, if you would just click on the link below, you’ll be directed to a short 18-question survey of this blog, and upon completion, you’ll be put into a raffle for almost no chance to win your very own koozie. Oh, and many rules and restrictions will apply.  

Is that something you’d be interested in? No? Ok.  

Want to learn more about the specific ways that you can simplify and optimize your channel engagement strategy? Download our report, or contact us to speak directly with a channel incentive expert.