Channel Incentive Program Design for the 2015-2016 Sales Cycle

May 16, 2014 Deb Broderson


First,  let me say that while there is a science to motivation,  we aren’t talking about rocket science.  It may not be easy, but with the right planning, inputs, governance and processes in place, you CAN improve participation rates and achieve the ROI needed to reach your business objectives.  Some of the best advice I can give is NOT to shortcut the planning phase of your channel incentive programs.  Successful programs that works for all your partner communities and stakeholders,  require time to survey, segment, determine how you will finance the program, develop governances and put a strategy in place that uses both the intrinsic and extrinsic motivators.

Channel Incentive Programs should be more thoughtful, than just running spiffs for sales that your partners may or may not have made anyway.  They should be about how you help your channel partner be more successful in their relationship with your organization.  The starting point is the development of a game plan. Your success and your partners’ success within the program depends on a well thought out game plan that starts with a clearly defined challenge.  What problem are you REALLY trying to solve.  Just saying that you want to increase sales is not the challenge. The challenge is HOW to increase sales. What should you do differently in this new program that is different from what you are currently doing? Is training needed?  Are your channel managers not focused enough on helping the channel partners succeed?  Or is that that the thousands of unmanaged partners are not participating and without them,  you cannot get the required growth.  Once you drill into the real challenge,  then you are able to address the elements of your game plan.  This graphic shows some typical items that need to be addressed within the planning of your Channel Incentive Programs.

TAX & COMPLIANCE – Consider how rewards reach your participants so that you won’t incur cross-border VAT fees.  Understand bribery laws for each country that your program will be available in and meet with your Tax Department and/or legal team to ensure corporate policies are being observed.

REWARDS — Depending on your goals and program structure, your rewards mix should vary.  How do you want your earnings used?  What about building a catalog offering that includes pre-packaged lead generation campaigns, sales training, product training, etc. Include brands that are meaningful and local.  Consider including your branded merchandise and/or products.

GOVERNANCE  define ownership, management and funding.  This can be difficult when dealing with a global program.  Typically branding, overall incentive policies and program objectives are held at a corporate level AND if corporate is providing the funding,  they would be responsible for high-level program objectives and success metrics.  The regional teams would be responsible for promoting the channel incentive programs, both internally and to their partners, fine-tuning and achieving the objectives and are a first contact point for resolution of local issues.  Terms and conditions may be driven by the geo or regional teams,  whichever your legal team prefers.

STRATEGY – Depending on the size of your company and your overall strategy of stacked incentives, how you implement channel incentive programs and who can participate will vary.  Define who can participate, based upon levels, regions, other programs, etc.  Assessing the channel incentive program against all discounts/incentives available to the partner, ensures that you are not giving away too much margin.  As part of your strategy,  also determine how incentives are structured AND monitored.

COMMUNICATIONS — Don’t let the program fail because you didn’t project the concept in a way that made participants care.  Consider all the deliverables that will help create excitement and engagement with the program.  To do that, you need a plan that includes a Message Matrix by Audience, the types of messages needed for each audience, the value statements for those audiences and the actual deliverables.  Define the messaging for Channel Account Managers (internal) Partner Sales Managers, Partner Sales Reps, etc.  Push the right information to the right targets at the right time and determine the best mediums for each of these audience.  Combine broad air cover with targeted, personalized communications.  Then measure, evaluate and modify as needed.

CONTENT: Just as in any marketing program,  change up your content,  keep participants interested and coming back for more.  Use videos, FAQs, Success Stories, games, training, etc. to keep people interested and participating.  Keep track of what participants are, and are not using,  then keep adjusting.

INTEGRATIONS: Integrate smartly.  Use single-sign-on to make logging in simple.  Think about other systems where integration makes sense and phase them into the system.  Don’t start with all your integrations live at launch.

COMPETITIVE BENCHMARKS or benchmarking against industry leaders is also an important element of the game plan.  Your channel partners are a wealth of information about your competitors,  after all,  they are probably participating in most of the programs.  Use them as a resource for understand how they earn, what the enrollment process looks like,  who can participate, what types of training they provide and how they redeem their earnings.

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