The Incentive Research Foundation has compiled a go-to resource for planning channel partner incentives.
In a channel incentive program, the sponsoring company relies on dealers or channel partners to sell its products or services. How do you design incentive programs that build product awareness, grow sales and market share, and instill customer loyalty? The Incentive Research Foundation has come up with an online toolkit to help plan channel partner incentives.
Best practices in developing channel incentives include:
- Strong focus on goal-based structures such as sales quotas in their program structures
- Multiple award types in a single program are very common. Over 80% of U.S. firms use more than one award type. U.S. businesses with channel incentive programs use:
o Gift cards (63%)
o Merchandise (51%)
o Award points (43%)
o Trips and travel (30%)
- The vast majority of top-performing organizations either have multiple programs designed and managed under a common purpose (48%) or a single program for the entire company (42%).
- While the product and interest in travel were important parts of program satisfaction, so were fairness and an opportunity to bond with leadership.
A few best practices used by companies in their channel partner incentives include prioritizing participant benefits when selecting rewards, budgeting based on operating income vs. gross margin and prioritizing reach over exclusivity.It’s important to have clear, concrete qualifiers, with no tiers or segment adjustments.Companies with successful programs also promote them in their broader corporate communications,
How to measure success
In channel partner incentive programs, almost 70 percent measure the firm’s revenue from increased product sales, while 75 percent track new customers and 50% track increased market share. While harder to measure, intangible benefits – such as culture, collaboration, and teamwork – are a critical component of the most impactful programs.
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