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Why You Need to Host a Food Broker Partner Summit
“Forget champagne and caviar – Taste the world instead!”
Incentivizing food brokers is the key to unlocking a harmonious partnership. Incentives drive a dash of motivation, a sprinkle of engagement – this ensures that your brokers aren’t just going through the motions, but are fully invested in stirring up success. Effective incentivization not only creates a synergy of interests but also encourages them to go above and beyond, leaving you with boosted sales and market expansion.
Let’s do an overview on all the different incentives you can use with your broker. After describing each one, we will highlight in green (highly effective), orange (moderately effective), or red (not effective) for how each is perceived.
Pro Tip: When structuring incentives, consider implementing quarterly payouts. Even if the incentive is designed to span a year, dividing it into four equal installments can yield significant benefits. This approach ensures that your brokers remain engaged and experience a sense of achievement every month when they receive their payout. Recognizing that a year can be a lengthy timeframe, waiting 365 days for a single payout could dampen their enthusiasm, especially as they juggle various responsibilities. To further enhance motivation, you could introduce a sliding scale. For instance, in the first quarter (Q1), they could aim to achieve 10% of the annual goal, followed by 20% in Q2, 30% in Q3, and finally, 40% in Q4. This not only ensures consistent compensation throughout the year but also maintains their focus and momentum. It’s important to note that each payout remains consistent once they hit the respective quarterly thresholds and if they miss a threshold in a single quarter, they can still make it up in the next.
Savory Strategies for Satisfying Results:
- Commission Structure Increase: A well-structured commission system forms the foundation of broker incentivization. Some manufacturers go above and beyond, choosing to foster deeper partnerships. They establish growth objectives; if the broker accomplishes these goals, their brokerage rate increases, starting from the first case sold that year. To illustrate, consider a scenario: Suppose you’re compensating the broker at a 5% rate and you aim for them to elevate your business from 100 to 120 cases. Should they achieve or surpass this 120-case target, they’ll earn a 1% increase in their brokerage rate, retroactive to case one. Thus, on 120 cases sold at 5%, the total amounts to $6. By incorporating this 1% performance-based incentive, the broker, by year-end, not only receives the $6 but also an additional $1.20 for meeting the goal. This kind of incentive framework has proven to be highly effective.
- Placement Payout: A placement payout typically refers compensation that is provided to broker reps for successfully selling a product into a specific target or customer. For example, this could mean for every case sold in to a specific account, that broker rep receives a dollar amount per case within the promotion window. This kind of incentive framework has proven to be not effective. Many times these types incentives require the infrastructure to track how many cases that specific customer purchases and that can be laborious. Don’t position yourself in a paperwork nightmare.
- Tiered Incentives: Implement a tiered system where additional payments are earned as the broker achieves higher sales volumes. For instance, let’s say you set three separate tiers based on your baseline of 100k cases sold the year prior. If they broker hits 120k cases this year, they will earn a $5k payout. If they hit 140k cases, the payout jumps to $7500. And if they hit 160k+ cases, then they earn $10k. This tiered approach not only maintains their motivation but also urges them to consistently exceed their sales targets, reaping greater rewards with each level of achievement. This kind of incentive framework has proven to be highly effective.
- Training and Support: When you have designated time to train your broker sales force, bring gift cards with you! $5-$100/card works great. As you lead the training, ask the broker representatives questions to ensure they are following along. Those who answer the question first and correctly, win one of the gift cards. This kind of incentive framework has proven to be moderately effective.
- Innovative Contests: Organize contests or challenges that encourage healthy competition among broker reps. Offer enticing rewards directly to broker reps for achievements like highest sales growth, most engaged, or most new accounts sold. This kind of incentive framework has proven to be highly effective. Here is a good example we have seen done before:
- Within ABC Brokerage, the representative with the most tickets wins a $2500 Travel Voucher. Note: you can ask the brokerage leadership to throw in 2 PTO days too for the winning broker rep.
- The contest is a lottery drawing. The more a broker rep sells, the more ticket entries they will have. At the conclusion of the promotion, one winner will be chosen at random.
- How can a rep get entries in the drawing? Great question! Here are the qualifying product categories
- Product Category #1 – 5 Tickets for every new customer sold (must sell 25+ cases in the promotion period)
- Product Category #2 – 5 Tickets for every new customer sold (must sell 25+ cases in the promotion period)
- Product Category #3 – 3 Tickets for every new customer sold (must sell 25+ cases in the promotion period)
- Bonus Kicker – 10 Tickets for every new customer sold (must be 500+ cases annually)
- Within ABC Brokerage, the representative with the most tickets wins a $2500 Travel Voucher. Note: you can ask the brokerage leadership to throw in 2 PTO days too for the winning broker rep.
- Enhanced Commission Rates for Product Categories: This incentive structure revolves around elevating broker commissions on specific product lines. These line items often hold greater profit potential or value-added features, making it advantageous to steer brokers towards securing new placements. Typically, products in this higher price range experience a slower rate of movement due to their premium nature, resulting in lower customer interest. For example, if brokers are earning 3% on total sales within your line, but they could earn 5% on a particular product category, the additional benefit might not justify the effort. When we analyze the figures, let’s consider a scenario where the broker sells $50k worth of the specialized product category annually. The difference amounts to an extra $1k per year. However, this might not be a substantial incentive compared to the potential of selling $200k worth of your lower-cost, high-demand products at the standard 3%, resulting in a more substantial commission payout. This kind of incentive framework has proven to be not effective.
