Loyalty Innovation in Other Industries, International
In India, Samsung Mobile reaches end-user consumers through a three-level channel comprising national distributors, re-distribution stockists (RDS), and retailers. In the past, Samsung’s direct relationship with the channel was through national distributors, but Samsung realized the importance of building a direct relationship with the RDS’s that was strong on engagement and went beyond transactions. Additionally, given the dynamism of the mobile phone industry and the intense competition from multiple players, it was critical to grow and groom the RDS’s to insulate them against competitive inroads as well as effectively take on the challenges of new technology–especially regarding mobile.
Samsung launched a structured partner- loyalty program for the RDS channel in 2011–Samsung Shikhar, or “peak.” The goal of the program was to retain and grow the RDS base, thereby building a stronger relation- ship with the channel as a whole. Phase 1 of the program focused on opening RDS communication channels and developing a relationship, while phase 2 focused on augmenting the proposition with performance rewards.
The program followed a communication and relationship activity calendar that kept Samsung in touch with the RDS’s on a regular basis. It included:
- business-related communications highlighting new models, phone features, incentive and margin structures
- skill and knowledge enhancement communication, offering stocking and inventory tools
- performance trackers across key metrics like weekly targets, new product launch targets and Stock Compliance Ratio achieved
- and relationship initiatives during the year for the RDS and his or her family.
The program was launched with enthusiastic events, which were well-attended by the RDS’s and their distributors. The events presented Samsung with opportunities to meet the RDS’s on a one-to-one basis and establish the beginning of a strong relationship.
Samsung Shikhar has generated tremendous awareness, good will and equity with the RDS base. The year ended with a 50% growth in the number of RDS’s enrolled, and the average number of units sold to the RDS base per month grew by 40-50%.
Voice of the Voters:
- “A well-adapted distribution strategy and an innovative business model.”
- “The program moved beyond just a transactional viewpoint.”
- “Solid use of rewards and events to cultivate B2B results. Strong use of personalized weekly progress reports and Stock Compliance Ratio scores to help channel sales people track their progress and get hooked on the program.”