“We need more attention.”
If you run a distributorship, you’ve heard that line this week. Probably today. Prioritize us. More placements. Sell more cases. And then an email shows up with an incentive the supplier dreamed up, and a note to go ahead and put it in front of your team.
Geoff Rifkin at Dynamo Distributing heard it so many times that he and his team started asking a different question back. Here’s how he put it on the show: “We kept saying to ourselves, well, what does that mean? Put a number on that, or put a plan together.”
So they did. In June 2023 Dynamo built a pay for performance program with their suppliers, and three and a half years later the brands that run on it are seeing a 9 to 11% lift in their baseline that sticks around after the program ends. A recent supplier town hall about it left them with more suppliers wanting in than they have slots.
If you’re sitting through ABPs right now and planning next year’s supplier programs, this one’s for you.
A lot of suppliers, a lot of noise
Some context first. Dynamo started out as a tiny NA-focused distributor in Austin. Through acquisitions it’s grown into the largest independent DSD in Texas, covering Houston, Dallas, San Antonio and Austin. They have 125 to 130 active suppliers across beer, wine, NA and Delta 9, and close to 4,000 accounts.
Do the math on that. If every one of those suppliers gets to push its own incentive on your reps whenever it wants, your reps don’t have a sales strategy. They have a pile.
Geoff knew it. What they needed was “something that guarantees focus.” That meant accountability for the supplier and for Dynamo, plus a way to actually measure the sales team.
Accountability runs both ways
This is the part I love. We talk about suppliers as partners all the time in this industry. We almost never talk about holding them accountable.
Geoff does. A supplier in a Dynamo PFP month has to have product available, be in the market, and help educate the team. Then they put money in, and Dynamo matches it dollar for dollar. “If we’re gonna be all in, we want our supplier all in. The doors are open. This is your time to shine.”
And then there’s the guardrail that makes the whole thing work. If the team as a whole doesn’t hit 80% of the goal the supplier and Dynamo agreed on, the supplier pays nothing. Zero.
The reps who did hit still get paid, though. Geoff covers that “on my own dime.”
They used to charge suppliers $1,500 just to be on the program, and suppliers kept asking why they’d pay that if Dynamo finished at 50 or 60%. Fair question. So Geoff dropped the fee and put Dynamo’s own money on the line. He was confident in his team, and the 80% floor got him more suppliers in the door.
It also forces honest goal setting on both sides. Dynamo aims a little high on purpose. When you’ve averaged around 90% across the years, Geoff said, a finish at 95 “is a huge win for us.” And in all that time, only one or two KPIs have ever finished below 80%.
On the top end, reps can earn on a straight line up to 125% of goal, and Dynamo funds everything past 100. Geoff’s take: “I don’t want to cap people at a hundred percent.” Some reps push to 125 every month. “It’s the same people, and I love it.”
Four KPIs and three metrics. No rebuys.
Here’s the structure, and it’s simple on purpose.
Four KPIs a month, max. Each rep has no more than four PFP focuses in a month. They’re spread across beer, wine and Delta 9, plus one flex KPI Dynamo can aim wherever it sees an opening, like a brand that just invested and is still sliding. On top of that, reps get paid on gross profit through VXP.
Three metrics a supplier can pick from. Cases, placements (going deeper in accounts where you already sell), or distribution (new buying accounts). That’s the whole menu. Geoff walks each supplier through which one fits where they are. A new brand in the book? Go get distribution in the right accounts. Dynamo has about 1,100 accounts buying THC, and maybe 300 to 400 of them really turn. Start there. “No buyer who doesn’t know who you are just yet is gonna put eight cases in their store… they’re gonna buy one case.”
No qualifiers. No rebuys. “I don’t want qualifiers. I don’t want rebuys. That’s all over-the-top stuff to me.”
Alicia from our team asked him about this, because we see it in client after client. Programs are so over-engineered with qualifiers and tracking hoops that reps tune them out. Geoff is now coaching his brand team to push back instead of just saying thank you and running whatever the supplier sends. His example: “Why are we doing a keg rebuy incentive within the same month? It’s only a 30-day incentive. Let’s not do that.”
He also said the quiet part out loud. It would be easy to take the variable pay bucket the reps already earn and stuff ten more PFP brands into it. More supplier money, less out of his pocket. “But that wouldn’t be right for any of the brands, and the performance across all the brands would start to dip.”
When everything’s a priority, nothing is.
The $3,500 sticker shock
So how do you sell this to a supplier who balks at writing a $3,000 or $3,500 check for one month?
You stop calling it one month. Here’s Geoff: “This isn’t a one-month program. This is how do we increase your baseline of business moving forward.”
Before the town hall, he pulled three and a half years of data. He took every month every brand had been on PFP and compared the business before and after. Placements went up, distribution went up, and the 9 to 11% baseline lift held after the program ended. It’s not a 30% spike that disappears the next month. “There’s an ongoing lift.”
And he frames the spend in terms a supplier understands. “You’re not in our market, you don’t have feet on the street. What is your yearly budget to spend on the state of Texas?” What Dynamo is really selling them is share of mind with the sales team. “Everything is share of mind.”
Know when to say no
Mike asked the obvious follow-up. What about the supplier with a big budget and a goal that’s nowhere near realistic?
Ross took it a step further: some suppliers just don’t care about ROI. They’re not afraid to burn five dollars to get fifty cents back, because that counts as growth to them.
Geoff’s answer is clean. If the goal isn’t realistic, it’s not a PFP. Make it an over-the-top incentive instead, let reps choose whether to chase it, and pay per action. The PFP is a big piece of what his reps take home, “the people I’m feeding,” and he’s not going to set “some goal out there that works well for my supplier, but at the end of the day is not realistic for my sales team.”
For an established brand, 15 to 25% growth on the chosen metric is a great month. Ask for 50% and up, and he’ll walk. “I’m not afraid to walk away from a supplier PFP commitment if we can’t align on what the metrics look like.” He’s never had trouble filling all four slots.
Was it comfortable at first? Nope. “It was extremely uncomfortable at first,” he said. The first six months of those conversations were hard. Then the data started coming in, and every conversation after that got easier.
Ross had a good reminder for both sides of the table. Your brand is 100% of the supplier’s business and maybe 1% of yours. Remember that when you’re sitting across from them, and suppliers should remember it too
What to do Monday
Pull next month’s supplier programs and incentives. All of them. Then put each one through three questions.
What’s the one metric we’re actually paying on? Cases, placements or distribution.
Can the team realistically hit 80% of it?
Is there a qualifier or a rebuy in there that only exists because the supplier ran it somewhere else?
If you can’t answer the first one, or the answer to the second is no, you don’t have a performance program. You have a supplier’s wish list with your reps’ paychecks attached.
Geoff summed up the whole thing in one line: “I want behavioral change focused on what matters.”
Want the full conversation?
Geoff Rifkin from Dynamo Distributing joined Mike, Ross, Alicia and me on Episode 133 of the Tapped In Sales Podcast, “Pay for Performance vs. Over-the-Top Incentives: What Reps Actually Execute.” We also got into how he keeps ABPs with 125 suppliers down to an hour each, using AI to build his A/B/C account lists, and what makes a brand manager survive in the middle.
▶️ Geoff on the $3,500 sticker shock and the 9 to 11% lift at the 16:04 mark.
If you want to see how a focused PFP and GP pay plan actually get built for your team, let’s talk. vxptech.com
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