Channel Incentives Types Versus Programs

Claudio Ayub

There's a lot of miscommunication and misconception out there in the channel about incentive types and incentive programs; they're often confused. One of the biggest examples I see is when companies and partners talk about spiffs when they're really talking about rebates.

Those are two different things. In many instances, there are companies talking about rebates that are really spiffs. Spiffs are at the individual level for sales reps or sales engineers and rebates are a company level incentive for a partner company. It's important that you understand that there are different types of incentives designed to do different types of things.

Co-Op funds, accrual-based Co-Op funds, are used at the company level, whereas market development funds (MDF), which is more discretionary funding is also used at the company level. You can invest in launch funds using MDF. Rebates, while they are at the company level, are a back-end incentive that appear as a back-end discount often. And then your typical spiffs for your sales reps and points-based rewards are very different. Points-based rewards are more behavior based. Partner sales reps can accumulate points through specific activities and behaviors where a spiff is designed to get a salesperson to do one thing. These are incentive types, which are different from the types of incentive programs. Incentive types are a lagging indicator whereas promotions or incentive programs are a leading indicator.

And there's a whole range of incentive program and incentive promotion types that you can put through to engage partners.

An example that is critical to partner engagement is onboarding velocity. You did your ideal partner profile and you put the right content to engage to the right partners, engaging the right personas. Now, that there's a commitment from the partner side, an onboarding velocity program or promotion is very important to ensure that a partner has made all the desired commitments, filled in all the contracts and agreements, and completed the required training within a specific time frame. Onboarding velocity is important to get that partner productive sooner rather than later.

Managed business objectives incentives are also important, and you can do this through rebates. What you can do with MBO type programs is reward partners for achieving specific supplier defined objectives. It's not just about revenue, right? It's about net new accounts; it's about new line of business; it's about adding services to a particular sale.

Different types of incentive programs or incentive promotions are going to do different things. Lead reporting is extremely critical today. When you send MQLs to partners, put an incentive on that and they are going to SAL that MQL or not within 5 to 8 hours. There are even promotions to help partners with digital transformation.

The important message here is, you deliver those incentives through these different types of programs to impact those personas at the partner level.

About the Author

Claudio Ayub

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.

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