What are Channel Incentive Programs and why are they needed?
A channel incentive program is a strategy used by vendors as a way to influence the actions and behaviors of their channel partners. Vendors often find that channel partner performance can begin to flatten over time, particularly as the channel partner ecosystem continues to evolve and partners begin to represent multiple brands. This is where channel incentive programs play a crucial role in influencing partners’ behaviors, building channel loyalty and ultimately enhancing indirect sales performance.
Channel incentives are generally monetary rewards given by vendors to partners for their efforts in achieving or exceeding specific goals. Such incentives can include co-op funds, market development funds, spiffs and rebates amongst others. We discuss these different partner incentive types in another blog.
Vendor partner bases vary in size and complexity, from tens of partners to thousands, and from running a single incentive program to multiple programs at one time. There can be many moving parts, which means it is impossible to apply a one-size-fits-all approach to incentives. So how do you, as a vendor, go about successfully executing a channel incentives program?
This is a topic we have previously discussed on our webinar: ‘Modernizing Incentive Programs for Today’s Channel’. Channel Mechanics’ CEO Kenneth Fox was joined by Sunny Song, Director Channel Operations at SentinelOne and Margaret Fetting, Channel Strategy, North & Latin America with Zebra Technologies.
Download the full webinar on-demand: “Modernizing Incentive Programs for Today’s Channel”
Together they came up with 6 top tips for running a successful incentives program. Read on to learn more about their top tips.
6 Top Tips for Running Successful Channel Incentive Programs
- Measure Results
- Make The Channel Incentive Easy to Understand
- Track Channel Incentives
- Use a Dashboard for Motivation
- Fast Payments
- Keep it Fresh
1. Measure Results
First and foremost, to be successful you must ensure there’s an operational process that supports the execution of any channel incentive program. You need to also make sure you have a way to measure the results, so that you can prove that the incentive is working.
Partner engagement on this is important. Is the partner really engaged? Do they really know what you are offering? Do they know the terms and conditions of the channel incentive?
2. Make The Channel Incentive Easy to Understand
“You’ve got to make it easy for partners to access the information,” said Song. “A lot of times we send them a flyer via email and then we’re done. But you’ve got to remember these partners are working with so many different vendors. You’ve got to make that information easily accessible to them, repeatedly.”
And with partners dealing with so many different vendors and incentive schemes, don’t forget the incentive itself also has to be easy to understand. “Whether it’s the internal sales rep or the partner, just keeping it simple on how to achieve the incentives makes a world of difference,” said Fetting.
3. Track Channel Incentives
Partners should be able to track their incentives – especially if there are additional or multiple steps or aspects of that incentive. For instance, if you’re incentivizing them for an initial meeting with a prospect, and then rewarding them for doing a proof of concept (PoC). Or rewarding them for registering a deal, and then ultimately closing that opportunity.
“You’re nurturing them along the journey and showing them where they are at every single point. And in some cases, rewarding them for those steps to ultimately get to revenue,” said Fox.
4. Use a Dashboard for Motivation
Another use of a dashboard that tracks incentives is for motivation – for both partners and internal account managers. “You have to help your own team do a better job, by not having them rely on spreadsheets and emails and trying to pull information from multiple systems,” said Fox.
This translates to the ability to stay on top of partners’ progress and encourage them onto the next level or milestone for reward.
“They have something to look at together and they can see the progress of how they’re earning those incentives. It’s always great to have that visual, and then they can see how quickly they’re being paid. That’s another way to maintain their mindshare of your company and your products,” said Fetting.
5. Fast Payments
Timeliness is important. Vendors will say they need to be able to pay partners within an hour of achieving their goal, “or they forget what we were paying them for.”
This is an important point. “If you only pay people out at the end of the month, or the end of the quarter, you might be paying out money that’s not having the impact you need it to.” This is because the partner may not even remember what they’re being paid for, especially when it comes to spiffs.
“Be it points or dollars, you have to do it quickly, or it doesn’t get the same effect,” says Fox. Again, this is why having a systematic dashboard for partners to access is critical.
6. Keep it Fresh
Finally, don’t get stuck in a rut with your incentives. “Keeping it fresh is important; you don’t want to just repeat the same incentives, over and over again, each quarter, each year,” said Song. “Try something new that you haven’t offered before, so that you can really excite the partners and their individuals. You want to really stand out against all the other vendors that they’re working with.”
To run a successful channel incentives program, I suggest following these six simple, but effective top tips. And if you need any help along the way, we’re always here.
For more information on channel partner incentives and to see how your incentive program stacks up against your competitors, download our eBook today.
Download the eBook: “What’s Happening with Partner Incentives”