During our webinar about the current state of channel incentives, guest host Angela Leech, Research Director, Channel Marketing, EMEA at SiriusDecisions, spoke about a survey conducted by the B2B agency. The survey queried channel marketing and sales professionals from a cross section of organizations that sell a wide variety of software, hardware, and services.
Below are highlights from the webinar. You can watch the full discussion about the current state of channel incentives here.
Channel Rewards Programs Today
According to Forrester’s Global Tech Market Outlook Report almost 2 trillion dollars flowed through the channel in the IT/Telco space in 2016. Three percent of that revenue ($57B) was spent on channel marketing, the majority – $46B – going to channel incentives.
With the move to the Cloud more of that incentive program money is being spent on supporting channel partners as they transition to a recurring revenue model. Channel marketers will spend about 50% of this budget on market development funds (MDF) and co-op.
Sadly, a lot of that money is being wasted. When asked by SiriusDecisions about strategy and goals, 14% of respondents said that channel incentives were not meeting ANY of their incentive goals and 27% said that incentives were only meeting a limited amount of goals.
Channel Rewards Program Pain Points
Three of the key issues in channel incentives are adoption, execution, and demonstration of return on investment.
The SiriusDecisions survey stated that the top four incentives challenges are:
- Poor partner participation
- Incentives not driving growth
- Incentives not influencing the right behavior
- No incentive ROI measurement
Other issues include:
- Overspending, cumulative rebates/margin/fraud
- Little or no governance
- Siloed programs, little connection to overarching goals
- Influencing wrong behaviors
So, what are some of the gaps that cause these problems?
One-size-fits-all methodology – A lack of alignment to the partner types, partner business models, and partner personas are the source of many channel rewards program challenges. Taking a holistic approach that aligns the incentives to the partner audience, will massively improve participation and the incentive results.
- Undue burden on field resources – 32% of survey respondents said that channel incentives management sat with field channel sales; 24% said field channel marketing oversaw their program. Incentives are still a significant burden for channel sales and marketing field resources, which prevents these valuable field resources from driving other activities that could contribute to pipeline and channel revenues. Technology used to execute, manage, and measure channel incentives will reduce the burden on your field resources.
- Manual processes – A surprising number of respondents (21%) are still using desktop and manual processes, such as spreadsheets, to manage incentive programs. Considering the number of programs offered and investments, your channel incentives program can’t continue to be a manual process. and improve accuracy and incentive compliance. Automation of processes also offer a more consistent, easy-to-use partner experience.
- Unutilized funds – 47% of respondents said MDF and co-op funds were being left on the table. The solution is to provide prescriptive guidance, fund enablement, support partners in driving demand through activities such as through-partner marketing training and certification.
Ultimately, you want your channel incentives program to stand the test of time. To do so, you must adapt to the digital transformation taking place in the channel ecosphere. You will meet this challenge when you take a holistic approach with an incentive framework designed to reward desired behaviors and align to your partner’s sales cycle and business objectives.
Want to hear more of the SiriusDecisions survey results and see a case study featuring a successful channel incentive portal? Watch the State of Channel Incentives webinar.
About the Author
Chief Strategy Officer Claudio Ayub brings over 20 years of global channel marketing experience to Perks.He has executed major go-to-market programs for a variety of vendors, including Bing, Cisco, Dell, EMC, IBM, Kaspersky, Lenovo, Microsoft, Motorola, Seagate, Symantec, and VMware among others.More Content by Claudio Ayub