---
title: "Practical Guide | Terminal Policy Design: Sell More, Earn More!"
description: "As 2020 draws to a close, regional supervisor Xiao Zhang drafts a New Year promotion plan: sales target of 10,000 cases, promotion from Jan 1-15, 2020, targeting 500 core outlets, with purchase rewards and display rewards. The business manager points out issues, especially for new products, and teaches Xiao Zhang about terminal promotion strategies, including the difference between purchase rewards and sell-through rewards."
author: "刑仁宝"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-11-26"
categories: "Distribution & Channels"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/practical-guide-terminal-policy-design-sell-more-earn-more-acadf85d.md"
original_source: "https://mp.weixin.qq.com/s/8Wa1Ot0apiqto5uHU4E3Eg"
translation: "https://xinjignxiao.com/zh/articles/%E5%AE%9E%E6%88%98-%E7%BB%88%E7%AB%AF%E6%94%BF%E7%AD%96%E8%AE%BE%E8%AE%A1-%E5%8D%96%E5%87%BA%E8%B6%8A%E5%A4%9A-%E5%A5%96%E5%8A%B1%E8%B6%8A%E5%A4%9A-acadf85d.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/practical-guide-terminal-policy-design-sell-more-earn-more-acadf85d/"
citation: "刑仁宝. “Practical Guide | Terminal Policy Design: Sell More, Earn More!.” New Distribution, 2019-11-26. https://xinjignxiao.com/en/articles/practical-guide-terminal-policy-design-sell-more-earn-more-acadf85d/"
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---

# Practical Guide | Terminal Policy Design: Sell More, Earn More!

> As 2020 draws to a close, regional supervisor Xiao Zhang drafts a New Year promotion plan: sales target of 10,000 cases, promotion from Jan 1-15, 2020, targeting 500 core outlets, with purchase rewards and display rewards. The business manager points out issues, especially for new products, and teaches Xiao Zhang about terminal promotion strategies, including the difference between purchase rewards and sell-through rewards.

As 2020 draws to a close, regional supervisor Xiao Zhang drafted a New Year promotion plan:
**Sales Target**: 10,000 cases
**Promotion Period**: January 1-15, 2020
**Target Outlets**: 500 core outlets
**Activity Format**:
Product A (15 years on market): Buy 10 cases get 1 free, buy 20 cases get 3 free;
Product B (1 year on market): Buy 5 cases get 1 free, buy 10 cases get 3 free;
Display 10 cases (5 of A and 5 of B) at the checkout counter for 1 month, reward 2 cases of Product A.
**After reviewing, the business manager raised two points:**
1. The New Year period offers great opportunities for full-case purchases, making it the peak sales season. Pressuring terminals with purchase rewards is the right approach, and considering full-case displays at key terminal positions aligns with consumer shopping habits. **However, it is essential to have support from visual merchandising materials such as shopping bags and price tags; gift boxes would be even better.**
2. Among the purchase rewards, Product A is mature, with large volumes and good executability. However, Product B has not yet established healthy turnover at terminals, so terminal willingness to stock up will be low. Some terminals may purchase due to the strong incentives, but stocking far above average turnover poses significant post-management risks. It is recommended to adjust the approach for the new product.
Xiao Zhang, recently promoted from salesperson, was making a promotion plan for the first time by imitating others. After hearing the business manager's thoughts, he still felt confused. The business manager noticed this and decided to give Xiao Zhang a lesson on terminal promotions.
**-01-**
**Conventional tactics work, but overuse has hidden dangers**
"Your entire plan increases terminal direct purchase profits, allowing our products to offer more benefits than competitors. This is essentially what most manufacturers use: purchase rewards and display rewards."
**Display rewards generally include end-cap displays, shelf displays, freezer displays, stack (cut-case) displays, and multi-point displays. Purchase rewards quickly achieve stock pressure through significant price incentives, while display rewards require store owners to invest in some advantageous display resources to earn extra rewards.**
This approach is effective in seizing terminal funds and locations, and increasing product visibility in stores. However, under high performance pressure, our salespeople are prone to over-stocking terminals using this method. For large inventories, our A and B products are definitely different situations.
Our A brand is a mature product with high awareness, a stable consumer base, transparent and stable pricing, and fast natural sell-through each month. Even if a store stocks 20 or 30 cases, the owner has confidence, typically clearing it within two months.
But our B product is in the brand cultivation stage, with low awareness and not yet deeply rooted in consumer minds. Daily sell-through is unstable. If we follow the above plan, salespeople, driven by immediate sales targets, may use relationships or strong promotions to achieve stock pressure, unknowingly planting a time bomb.
**Because terminal owners typically adopt a hesitant and wait-and-see attitude toward such products. The more money you pressure them to invest, the more anxious they become. Once sell-through stalls or our salespeople fail to visit promptly, this anxiety amplifies.** This easily leads to discount dumping or, if they silently absorb the loss, they will vent their frustration when salespeople visit, damaging good relationships and creating obstacles for future new product launches.
**-02-**
**Dig deeper into terminal opportunities, use clever force to break through**
Besides the above methods, some mature brands use another approach: **binding purchase volume ranges. In display-paid store agreements, include purchase requirements during the display period; only by reaching the corresponding purchase volume can rewards be redeemed.**
For example, a salesperson signs an agreement with a store, specifying that during the June-August peak season, the store will purchase a full end-cap display exclusively for our product, and set a three-month purchase target. If both the purchase target and display requirements are met, product rewards are issued the month after the activity ends. The intensity is typically higher than pure display rewards.
Combining traditional display rewards with purchase rewards leverages their respective strengths: seizing key terminal positions while controlling purchase volume. Additionally, deferred payment of fees avoids the risk of terminals discounting products.
Of course, this approach has drawbacks. First, some terminals may question that the reward is for display and should not have purchase requirements. Second, there is potential for financial loopholes: salespeople may refuse to pay rewards citing display non-compliance, while in company finance they claim the display was compliant to apply for reward funds, embezzling money.
Besides the two methods above, there is another terminal incentive plan worth considering: **terminal sell-through rewards, based entirely on sell-through; the more you sell, the more rewards you get.**
**For a real case, the company I was with launched a new product. After six months on the market, we adopted a sell-through reward plan for terminal incentives. During the June-August peak season, average sales per store more than doubled compared to before the activity.**
**Promotion Period**: June-August
**Target Outlets**: 200 outlets with good relationships and relatively good turnover
**Activity Format**:
For every case (1*24 pack) sold, give 3 single-item incentives (delivered on the next visit after weekly visits);
For every two cases sold, give half a case incentive; for monthly cumulative sales reaching 5 cases, give two cases incentive the next day.
The execution of the above terminal sell-through plan requires attention to the following six points:
1. Focus on outlets with sell-through foundation, and have collected basic sell-through data as the basis for setting sell-through targets;
2. The per-case incentive should be greater than typical manufacturer purchase rewards, because rewards are deferred and require store owners to actively promote;
3. Target setting should be cautious, from low to high. The lower limit should not be below normal sales; the upper limit should be set so that the first time is a stretch, the second time a jump, like a gambler playing a slot machine—terminal owners must taste the sweetness;
4. Accurate sell-through data tracking is essential. Sign agreements, not just based on what the store owner or salesperson says. There must be high-frequency visit records, data, and photos, otherwise financial risks arise;
5. Supervision and evaluation mechanisms are needed. Supervision prevents financial loopholes and avoids executing as purchase incentives before distribution. Evaluation creates a competitive atmosphere, involving salespeople to professionally coach store owners and help them get rewards quickly. This process improves salesperson performance and, more importantly, cultivates relationships;
6. If a mature brand launches a new product, rewards can be paid with the mature brand for better incentive effect and stronger terminal confidence. Once the new product has sell-through foundation, switch to rewarding with the new product.
In terms of format, there are also innovative approaches. For example, besides returning goods for reaching distribution targets, you can set purchase points: one point per case sold, monthly redemption, with different reward tiers. The more points, the richer the rewards, such as promotional products, physical rewards, or accumulating until year-end for larger rewards.
Alternatively, based on distribution volume, terminals can earn monthly lottery draws with prizes like calculators, lighters, game cards, or product redemption vouchers for owners to draw. (Prize settings should match owner preferences.)
Also, store owners who achieve terminal sell-through incentives for three consecutive months can be invited to meet with the general manager at the branch and participate in a marketing training session. This allows owners to experience brand culture, improve business skills, and cultivate brand loyalty.
The business manager's analysis suddenly enlightened Xiao Zhang, giving him a deeper understanding of terminal promotions. Xiao Zhang gave feedback to the business manager: "Actually, the biggest differences between purchase rewards and sell-through rewards are three:
> **1. Purchase rewards aim to get owners to stock up first; sell-through rewards aim to get owners to sell first.**
>
> **2. Purchase rewards are more suitable for mature brands; new products should be used moderately.**
>
> **3. Sell-through incentives require target setting and retail data tracking, unlike purchase rewards.**
In fact, many salespeople have a misconception: once products are pressed to terminals, money collected, and sales counted, their task is complete. This is wrong. After products reach terminals, we need to invest time and effort to monitor them.
In today's intense product homogenization competition, every product has competitors in stores. How to make consumers choose your product and form repeat purchases is crucial for exploring terminal sales opportunities and sustaining performance growth.
Harmony among people is key to success. Fully mobilizing the enthusiasm of key personnel at all levels, giving terminal owners confidence in the product, and stimulating their initiative to promote sales will better drive channel growth and accelerate brand development.


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## Citation metadata

- Publisher: New Distribution
- Author: 刑仁宝
- Published: 2019-11-26
- Canonical: https://xinjignxiao.com/en/articles/practical-guide-terminal-policy-design-sell-more-earn-more-acadf85d/
- Original source: https://mp.weixin.qq.com/s/8Wa1Ot0apiqto5uHU4E3Eg

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