, ,

Things You Must Know About a Trade Loyalty Program

WM Circle Logo

By: Wise Marketer Staff |

Posted on March 30, 2020

Today’s businesses across all sectors understand the importance of trade and channel partners in supporting their business operations. The significant role that trade partners play in an organization’s business model and their influence cannot be underestimated or ignored. They are a strong medium through which the organizations are able to make their products reach their targeted users.

By: Girirajsingh Rajpurohit

For instance, if a company wants to launch a new product, before getting directly to the customers, the company first needs to introduce the product to its distributors and retailers. After knowing about the product details, the distributors and retailers will further introduce and promote the product to the consumers for selling purposes using various marketing tactics. Moreover, connecting and engaging with trade partners can also help in augmenting the sales of existing products.

What is a Trade/Channel Loyalty Program?

According to Channelplay, “A Trade or Channel Loyalty Program is a long term structured incentive plan designed for trade partners with the intent to provide additional monetary benefits to them.” It is a powerful way to develop loyal, long-lasting relationships with trade/channel partners including resellers, dealers, and retail partners. This type of program is usually extended only to the biggest trade partners and runs on a yearly cycle. Combining best practice loyalty methodology with strategic incentive program design, the program provides a quick and reliable communication channel between the brand and its trade partners.

As a channel marketing program works with an aim to convey the value of an organization’s products and services to its trade or channel partners network, it becomes essential to consider the value an organization offer to those partners. Trade partners are usually the people who can assist your business in distributing your product to the end user. Therefore no matter what product or service you are offering with regards to your trade partners, you must consider two very important questions in your mind: what are you offering and why should your trade partners care about your offerings? Well, having an understanding of these questions can help an organization in shaping its approach to channel marketing.

In order to survive in today’s competitive business world, it is important for businesses to build true loyalty with their channel partners. Ensuring true loyalty requires a brand to employ multichannel loyalty and engagement solutions as part of its larger loyalty initiatives. Enterprises must change their approach to loyalty and concentrate on building relationships across channels. The partners must be rewarded for the various ways by which they engage with a brand and not just a sales transaction.

Importance of Developing Trade Loyalty Programs

Figuring out numerous ways and choosing the best ones to support your trade partners is the key to identifying your channel’s marketing strategy. Developing a channel incentive program that can keep your business at the priority of your channel partners' minds is perhaps the best way to connect and engage with trade partners. These programs help in encouraging partners to perform their best to promote your products over your competitors.

In order to boost the interest and energy of the trade partner to sell and support your product and services, you must introduce the best incentive and reward programs. With incentives and reward programs, you can engage and motivate underperforming channels and build mutually beneficial relationships for long-term loyalty.

However, offering members a loyalty program that consists only of rewards based on transactional points is not just enough. In order to gain real and emotional loyalty, brands must endeavor to understand their partners’ individual needs, desires, and urges to persistently deliver exceptionally customized experiences and relevant offers.

Some of the most important factors that help to build a strong emotional relationship between a brand and its trade partners include mutually beneficial scheme and incentive structures, quick and foolproof two-way communication, transparent pay-outs, and emotional connections through personalized rewards and experiences. In the end, transforming the relationship between a brand and its trade partners from an entirely transactional one to a more emotional relationship is the key to the success of a trade loyalty program.

Key Benefits of Professionally Managed Trade Loyalty Programs

Mentioned below are some of the key benefits of running a professionally managed centralized loyalty program to trade partners; have a look:

  • Data Analysis: Data analysis and dashboards are quickly becoming must haves in any loyalty program. These programs provide companies with a vast array of customer data and loyalty analytics. Providing actionable dashboards and data, and keeping all stakeholders updated through them, is perhaps an excellent value addition that can be provided through trade loyalty programs.
  • Reliability of Communication: In any sales organization, communicating to the trade partners about the latest offerings, products, and schemes is of utmost importance. Relying on centralized communication through the third party ensures timely communication, which further leads to channel partners taking full advantage of the communication.
  • Emotional Connections: When a trade loyalty program is customized and personalized for each partner, it helps in building a strong emotional connection with trade partners. This emotional connection helps to transform the relationship between a brand and the trade partners from a transactional one to an emotional one.
  • Create a Good Image of the Company: In today’s highly competitive business world, a well designed and professionally managed loyalty program helps sending out a signal to the trade partners that they are dealing with a professional company. After all, having a good image in the market and among the trade partners can make or break an organization’s fortune.
  • Price Control: Traditional methods of rewarding channel partners through discounts or cash schemes may result in price breakdowns in the market as the discounts are passed on downstream. However, with the help of a professionally managed long term reward-based loyalty program, price breakdowns can be reduced to a great extent as the rewards are not easy to liquidate.


A channel or trade loyalty program is a powerful way to develop loyal, lasting relationships with dealers, resellers, and retail partners. When designed perfectly and managed professionally, trade loyalty programs can help to achieve high impact sales and revenue growth for businesses. If you are considering a trade loyalty program, make certain to hire the services of a professional company that can offer the best practice loyalty methodology, channel partner engagement techniques, strategic incentive program design, and customized solutions for your industry.

Girirajsingh Rajpurohit is a content marketer at LoyaltyXpert, a loyalty program company in India. He holds spectacular skills in loyalty programs, marketing, and customer retention.