Home » Library » Whitepaper: Building the Business Case for a Channel Incentive Program
Head of Marketing
July 12th, 2018
Est. reading time
The age-old question all channel managers ask with respect to their channel partners is as relevant today as it was when the channel first started…”To incentivize or not to incentivize?”
If the answer is yes, as is so often the case (according to the Incentive Federation, 84% of U.S. businesses use non-cash rewards to recognize and reward key audiences in the form of award points, gift cards, incentive travel, and merchandise – up from 74% in 2013), a channel manager will have to prepare a business case for their CFO to justify their position for incentivizing partners. To get the most from your channel investment, our whitepaper illustrates why you should think about implementing a strategic channel incentive program sooner rather than later.
We live in a business performance culture. A merit culture. Channel practitioners are finding their channel partners’ performance flattening, at a time when they’re chartered to get more out of channel partners.
Unfortunately, many vendors wait far too long before employing an incentivization strategy, and in their rush to establish a channel incentive program, don’t take the time to analyze what channel incentive strategy to implement.
Many channel practitioners believe they have an adequate channel comp/incentive model, i.e. their channel partner tier model. Like hiring employees into position levels, channel practitioners often slot new channel partners into one of three or four tiers, based on their historical performance (oftentimes their revenue) or their potential (forecasted revenue), with different discount levels. For example, Bronze partners may get a 20% discount, Silver partners a 30% discount, and Gold partners 35%. The assumption is that Bronze partners will be motivated (incentivized) to attain Silver, and Silver partners Gold, in order to get a larger discount margin. But is that the correct way to implement a channel incentive program?
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