Distributor Engagement
Plumbing and HVAC distributors play a central role in ensuring the success of HPWH programs. Even with generous financial incentives, distributors are typically wary of engaging in new programs because many of them have had bad experiences with poorly designed utility programs in the past. Because of this, finding a program implementer that has run successful midstream programs in the past can be important. Program implementers need to establish an ongoing relationship with the distributors in the territory, gain their trust with effective program design that is not intrusive on the distributors business, and maintain a positive relationship over time with regular check ins. Distributors may be concerned that HPWHs won’t sell and will take up valuable inventory space, or more commonly, worry that the administrative burden will outweigh any benefits they may realize from participating. Establishing rebate and Sales Performance Incentive Funds (SPIFs) levels in accordance with best practices will go a long way towards easing some of those concerns. Perhaps, most important, is the commitment to and implementation of a rapid payment timeframe. Participating distributors should receive reimbursement for midstream incentive and SPIFs no more than 21 days after sale.
Another essential element, particularly in the early stages of program deployment, is robust distributor and contractor trainings which clearly explain the value proposition of the technology, the unique features from manufacturing representatives, and provide resources and contact information to assist in quickly answering installer questions.
The following are recommended steps for program designers and implementers to consider for increasing distribution partner engagement and support:
- Encourage distributors to identify their top 5 installers for emergency replacements.
- Promote greater loyalty of HPWHs with enhanced training, tools, and recognition.
- Offer additional services to plumbing partners including loaner equipment, loaner tanks, demo tanks, lift systems, and trailer hitch cargo systems.
- Improve the inventory holding terms for HPWHs – (i.e., no-risk cost of inventory and/or buy back if they don't sell).
- Negotiate better pricing terms for HPWH volume sales from OEM.