Types of Channel Partner Incentive Programs You Should Know About
Types of Channel Partner Incentive Programs You Should Know About
Types of incentive programs You Should Know About
Owing to the growing significance of channel partners in the overall sales scenario, it is imperative to engage the partners through well-designed channel partner incentive programs. It is crucial to reward your channel partners appropriately to drive the best results from them. These partners sell your brand, products, and services even though they do not work directly for your business. You need to incentivize them well so that they are motivated continually to put your brand above that of your competition.
Today we will talk about the different channel partner incentive programs available for business owners, CEOs, and business managers to pick from.
Types of Channel Partner Incentive Programs You Should Know About
1.Sales-based Incentives
This is the most common type of incentive program for channel partners. Consider this as a traditional program where the sales team of the channel partner is incentivized based on the volume of sales sold, revenues and margins generated, and incremental sales/revenues achieved.
Common rewards include gift cards, merchandise, travel rewards, single-use debit cards, loyalty-based promotions, etc.
2.Sales Performance Index Funding Formula or SPIFFs
This is a form of sales-based incentive where the individual salespeople of the channel partner are rewarded. In contrast to the former, SPIFFs are usually executed for short-term promotions. For example, to promote sales during the off-season, you can design a SPIFF program for your channel partners.
The crucial thing to remember in this case is that the incentive should get the participants excited. Thus, customization is the key to this program. Reloadable debit cards, gift cards, tech gadgets, etc., are lucrative rewards for individual sales personnel.
3.Value-Added Reseller Incentives
In this incentive program, channel partners sell as VARs or value-added resellers. These partners add certain service factors and features to your brand’s products and sell them on a turnkey basis. These services and features are over-and-above the standard features of your products. For example, Cisco has a VAR program where resellers are offered extensive training, and tools to not just sell Cisco’s products but also grow their business and achieve higher profitability.
This is one of the best ways for brands to increase their market reach and penetrate further into the market. For IT companies, this incentive program brings in the best results.
4.Activity-Linked Incentives
Most channel partners are appointed to sell your products and services. But some partners, however, are willing to go the extra mile. If you have any such partner, you can work with on activity-based incentives. These incentives reward the partner for extra activities. For example, if the partner schedules demos and site visits for your sales team, you can accordingly draw up a plan to reward them.
5.Marketing Incentives for Channel Partners
MDF or Market development funds and Co-ops or Co-operative funding are the two popular forms of rewarding partners for the brand-related marketing efforts they undertake on your behalf.
- MDF include tools and resources offered by you to your channel partner to support their marketing efforts. Hence, radio ads, road shows, trade shows, etc., where your channel partners participate on your behalf are the best examples. Incentivizing partners through MDFs helps in reaching out to new customers effectively, developing leads, converting leads, and leveraging the partner’s local market reach.
- Co-op incentives are allocated to partners who have been loyal to your brand and have stood by you through thick and thin. These incentives are meant for partners who invest in advertising and other expensive marketing efforts for your brand and products. Microsoft’s cooperative marketing program is a great example of where partners are incentivized when they promote Microsoft products.
6.Rebates to Channel Partners
Rebates are given to channel partners based on the size of the order or the frequency of orders for products in your product line. Rebates are quite popular and doled out to partners who surpass the given target per product. Most channel partners then pass on a percentage of the rebate to customers for better sales prospects.
7.Warranty Registrations & Bundling
Bundling helps brands and manufacturers combine products and services as a bundle so that they can optimize the sale value. When your partners undertake bundling efforts, they are given bundling incentives. Similarly, warranty registrations wherein customers and end-users return the warranty card for warranty coverage. With a higher number of warranty registrations, the partner ensures voluminous end-user data is recorded which helps your brand keep the end customer informed about various marketing and sales efforts undertaken by your brand. These channel partners, thereby, are rewarded over and above the standard incentive program.
8.Loyalty Incentives for Channel Partners
80% of your channel sales come from your top channel partners who are probably about 20% of the entire distribution network. Besides the typical incentive program for individual salespeople from their team, it is important to reward the channel partner as an organization too. This needs to be done to retain the partner rather than incentivize sales.
9.Training & Enablement Incentives
Training incentives are important so that the channel partners are abreast with the updated information about your brand and products. Incentives include certificates, online quizzes, being a part of your brand roadshows, conferences, tradeshows, etc. Such enablement programs or incentives help the partner be motivated and engaged with your brand as they are prone to sell products that they know well.
My Incentives for Channel Partner Incentive Programs
Choosing suitable channel incentive programs for your partners is the key to leveraging their market potential. With the help of the right program, your brand can look at increased sales, revenues, market penetration, and reach.
But running multiple programs with multiple channel partners, calculating the incentives and then disbursing the sales incentives can be extremely cumbersome. Even as a lot of companies understand the importance of it, many are still struggling to maximize its potential due to manual processes. Using excel to manage your incentive program is not a great idea. It limits your opportunity to strategize and build incentive programs that drive business value, often leaving you snarled up in managing the operational parts including incentive disbursal.
My Incentives solves this problem for you. A platform that has been built to run multiple incentive campaigns, automatically calculate incentives based on the set-up rules and then give access to end users to a reward store of 500+ brand vouchers.
If that sounds like what you need right now, we’d love to give you a quick demo.
Types of Channel Partner Incentive Programs You Should Know About
Owing to the growing significance of channel partners in the overall sales scenario, it is imperative to engage the partners through well-designed channel partner incentive programs. It is crucial to reward your channel partners appropriately to drive the best results from them. These partners sell your brand, products, and services even though they do not work directly for your business. You need to incentivize them well so that they are motivated continually to put your brand above that of your competition.
Today we will talk about the different channel partner incentive programs available for business owners, CEOs, and business managers to pick from.
Types of Channel Partner Incentive Programs You Should Know About
1.Sales-based Incentives
This is the most common type of incentive program for channel partners. Consider this as a traditional program where the sales team of the channel partner is incentivized based on the volume of sales sold, revenues and margins generated, and incremental sales/revenues achieved.
Common rewards include gift cards, merchandise, travel rewards, single-use debit cards, loyalty-based promotions, etc.
2.Sales Performance Index Funding Formula or SPIFFs
This is a form of sales-based incentive where the individual salespeople of the channel partner are rewarded. In contrast to the former, SPIFFs are usually executed for short-term promotions. For example, to promote sales during the off-season, you can design a SPIFF program for your channel partners.
The crucial thing to remember in this case is that the incentive should get the participants excited. Thus, customization is the key to this program. Reloadable debit cards, gift cards, tech gadgets, etc., are lucrative rewards for individual sales personnel.
3.Value-Added Reseller Incentives
In this incentive program, channel partners sell as VARs or value-added resellers. These partners add certain service factors and features to your brand’s products and sell them on a turnkey basis. These services and features are over-and-above the standard features of your products. For example, Cisco has a VAR program where resellers are offered extensive training, and tools to not just sell Cisco’s products but also grow their business and achieve higher profitability.
This is one of the best ways for brands to increase their market reach and penetrate further into the market. For IT companies, this incentive program brings in the best results.
4.Activity-Linked Incentives
Most channel partners are appointed to sell your products and services. But some partners, however, are willing to go the extra mile. If you have any such partner, you can work with on activity-based incentives. These incentives reward the partner for extra activities. For example, if the partner schedules demos and site visits for your sales team, you can accordingly draw up a plan to reward them.
5.Marketing Incentives for Channel Partners
MDF or Market development funds and Co-ops or Co-operative funding are the two popular forms of rewarding partners for the brand-related marketing efforts they undertake on your behalf.
- MDF include tools and resources offered by you to your channel partner to support their marketing efforts. Hence, radio ads, road shows, trade shows, etc., where your channel partners participate on your behalf are the best examples. Incentivizing partners through MDFs helps in reaching out to new customers effectively, developing leads, converting leads, and leveraging the partner’s local market reach.
- Co-op incentives are allocated to partners who have been loyal to your brand and have stood by you through thick and thin. These incentives are meant for partners who invest in advertising and other expensive marketing efforts for your brand and products. Microsoft’s cooperative marketing program is a great example of where partners are incentivized when they promote Microsoft products.
6.Rebates to Channel Partners
Rebates are given to channel partners based on the size of the order or the frequency of orders for products in your product line. Rebates are quite popular and doled out to partners who surpass the given target per product. Most channel partners then pass on a percentage of the rebate to customers for better sales prospects.
7.Warranty Registrations & Bundling
Bundling helps brands and manufacturers combine products and services as a bundle so that they can optimize the sale value. When your partners undertake bundling efforts, they are given bundling incentives. Similarly, warranty registrations wherein customers and end-users return the warranty card for warranty coverage. With a higher number of warranty registrations, the partner ensures voluminous end-user data is recorded which helps your brand keep the end customer informed about various marketing and sales efforts undertaken by your brand. These channel partners, thereby, are rewarded over and above the standard incentive program.
8.Loyalty Incentives for Channel Partners
80% of your channel sales come from your top channel partners who are probably about 20% of the entire distribution network. Besides the typical incentive program for individual salespeople from their team, it is important to reward the channel partner as an organization too. This needs to be done to retain the partner rather than incentivize sales.
9.Training & Enablement Incentives
Training incentives are important so that the channel partners are abreast with the updated information about your brand and products. Incentives include certificates, online quizzes, being a part of your brand roadshows, conferences, tradeshows, etc. Such enablement programs or incentives help the partner be motivated and engaged with your brand as they are prone to sell products that they know well.
My Incentives for Channel Partner Incentive Programs
Choosing suitable channel incentive programs for your partners is the key to leveraging their market potential. With the help of the right program, your brand can look at increased sales, revenues, market penetration, and reach.
But running multiple programs with multiple channel partners, calculating the incentives and then disbursing the sales incentives can be extremely cumbersome. Even as a lot of companies understand the importance of it, many are still struggling to maximize its potential due to manual processes. Using excel to manage your incentive program is not a great idea. It limits your opportunity to strategize and build incentive programs that drive business value, often leaving you snarled up in managing the operational parts including incentive disbursal.
My Incentives solves this problem for you. A platform that has been built to run multiple incentive campaigns, automatically calculate incentives based on the set-up rules and then give access to end users to a reward store of 500+ brand vouchers.
If that sounds like what you need right now, we’d love to give you a quick demo.