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.  

5 Smart Ways to Build Employee Loyalty Digitally

In our last blog, we explored how channel sales incentive programs can fail if there is a lack of communication and if the program isn’t monitored from end-to-end. Now, one way to easily ensure an effective channel sales program is a well-made sales incentive software system. But not all the software out there will have the same capabilities.   

In this blog, we will list five must-have features in the sales incentive software that you should be looking out for. Being the decision-maker, this will ensure that you empower your business by choosing the right tool available in the market. 

So, what are the things to consider when buying channel sales incentive software? 

Even though it is imperative to a business’ success, many still depend on traditional methods especially using the spreadsheet to drive their channel sales. This could be detrimental to business growth and the scaling of the incentive program itself.

Investing in the right software is of utmost importance. It is one of the key pillars of your channel sales incentive program. So, what are the things to consider when investing in one? 

1) Is the software secure?  

Overlooking security-related concerns can be a big mistake. This is because security breaches have become pretty frequent these days. As the digital landscape grows, so does the world of cybercriminals.   

The automated incentive program for your channel partners needs to have the right security features in place. This is critical to safeguard company data. When considering buying a software system to help expedite the channel program and make it effective, ensure that the platform is impregnable.   

2) Comprehensive dashboard for analysis and reporting for real-time visibility

A modern-day sales incentive software cannot be effective minus the dashboard. Every good system will have a payee dashboard that will keep the sales teams informed about their performance, reward status, targets assigned, achievement information, etc. All of this information will also be captured in real time.   

Introducing hierarchy is also important in the dashboard view. Can an area manager see data of channel partners in their area? Can a zonal manager be given a similar but more detailed view? Besides this, individual sales representatives with targets should have access to the details of the commission plan and calculations for better clarity. Plus, if the system comes with built-in forecasting features, it can work as a motivator for the team members of the channel partner.

3) Gamification features to drive better engagement

To ensure that the incentive program keeps the channel partners engaged, including gamification is an interesting option. Such features usually include things that you would expect from an online game. Examples include leaderboards, chatrooms, quizzes, target meters, and more. Such features keep the program interactive and fun. It can help create a healthy competitive spirit amongst team members.   

4) Mobile access 

If the software system is accessible from a handheld device like a smartphone, it can make things further engaging for the ground team. On-the-go access is an essential parameter if the majority of your channel sales team is on the road.   

Be it the redemption of awards, checking status, or getting a real-time report on key parameters, the team feels empowered. As you look to increase your sales and revenues, mobile accessibility can help the channel sales incentive program robustly.  

5) Well-designed administrative functionalities 

Another pre-requisite for the software program is related to making the system accessible on a role-based module. Managers, payees, HR, Finance, Operations, Support Help Desk, and the admin-in-charge should be able to access the system seamlessly. The system should have in-built functionalities that help send emails, messages to phone numbers, SLACK integrated, and so on.  

In a nutshell … 

A channel sales incentive program’s performance can be further boosted with the help of a well-designed software system. My Incentives is one such customizable platform that helps collaborate across distributed teams, provides authentic analytical insight, and is accessible from mobile phones. A versatile and multi-faceted software system that makes automation of your incentive compensation program a comfortable and seamless journey.  

Interested to know more about My Incentives? Get in touch for a detailed demo! 

Are you investing in a program to incentivize your channel sales team without seeing strong results or ROI? Here are some of the reasons why we have seen channel programs fail 🚫📈

A channel sales incentive program is a proven method of driving and engaging your channel partners to achieve higher sales. However, that said, having a channel incentive program is one thing, and making it successful is another ballgame altogether. In 2020, SiriusDecisions which is now a part of Forrester Research carried out a survey covering 10,000 business leaders in the US. The purpose was to understand how their channel partner incentive programs are faring. The results are eye-opening:

• 58% of the incentive programs had failed miserably
• Only a mere 5% achieved the set objectives
• The remaining 37% could only achieve the objectives partly

Unfortunately for us, there are no such detailed surveys conducted in India or data available for easy reference.

But it won’t be wrong to assume that, even in India, many channel sales incentive programs are failing miserably.

The solution then isn’t in abandoning your sales incentives programs completely. If you understand the possible reasons behind the failure of your channel sales incentive programs, you’ll be able to curate a more efficient program. Explore the requisite best practices in the designing and deployment of a futuristic incentive program for better ROIs, payoffs, and of course, increased sales and that’s what we’ll help you with here!

Five reasons your channel incentive program is likely to fail

1. Your channel partners lack knowledge of the program

Maybe you do have an excellent program in hand. It’s designed by the best of the brains. It promises fair rewards to the ground team. But unfortunately, it has turned into a recipe for failure because somewhere down the line, someone forgets to inform the concerned people about it.

Globally, one of the top reasons for the failure of a channel partner incentive program is that the partners do not have complete information about the program. 

Communication or the lack of it is the real culprit in such cases, not necessarily the program itself. Organizations unwittingly miss sharing important product and campaign information with their dealer networks and other channel partners. As a result, in the absence of the right tools and resources, the programs become ineffective.

Therefore, the clearer the communication, the better empowered the team would be to deliver. Emailing may be one of the ways to inform your partners but we encourage you to look beyond traditional channels. Take the help of modern communication tools including text messages, desk drops, WhatsApp groups, and Slack messaging, to keep broadcasting the program on a continued basis.

You could possibly also use an app like My Incentives. This will not only automate the sales incentives program for you, it will also enable communication and sharing of information with your channel partners on a single platform.

2. Assuming that everything is fine with the incentive program

You have built a great incentive program and also invested in the right tools so that your channel partners are informed, motivated and empowered to sell. The communication channels are open, and you have ensured that there is no lag between the actual incentive program and how the ground team interprets it. So far, so good. 

Your team too may be happy with the design of a stellar incentive program and making sure that the last person from the channel sales team is well aware of the details. But, if you become complacent thinking that everything will now run on auto-pilot, it would be a big mistake. 

Assuming that the program needs no revisiting in between or needs no tweak here and there can very well become one of the reasons for its failure. Ongoing and persistent monitoring is necessary to ensure consistent results. Your admin needs to work towards the optimization of the program on a regular basis so that it becomes a result-driven endeavor.

3. Unrealistic targets & unmeasurable results
   
   

If the targets assigned are unachievable and too idealistic, the program is doomed. While your team would be eager to allocate bigger targets to channel partners for increased sales and revenues, doing so without an understanding of the capabilities of the channel partner can be an unwise decision. In many cases, manual or semi-automated systems make measuring a tough challenge. 

Targets and rewards should be such that they resonate with your partners. Not only should the program be fair, but it also needs to be realistic. Else, channel partners can become disheartened pretty soon and switch to selling your competitor’s products with renewed aggressiveness, thus, causing your sales to downslide with a spiraling effect. 

Here’s an idea. Ensure that the targets are SMART for your incentive program to be a success.

4. One program made to fit all sizes

Another common mistake that organizations commit when designing their incentive programs is that they launch a generic program for all. In most cases, this may not work. If you are not tailoring your channel sales incentive program as per the operations of the channel partner, you could be making a big mistake. Personalized programs are the need of the hour. Ensure that key people from the channel partners’ side are involved while the program is being designed for them. 

This level of partnership can make the incentive program truly effective.

5. Lastly, the incentive program is not engaging and motivating

Engagement is the key that can make a difference between a successful and failed channel sales incentive program. If the rewards and incentives lack to thrill the people on the ground, then, however modernized the program is, it will definitely fail. 

Try to add elements of gamification with leader boards, target meters, quizzes, etc., to keep the sales team motivated and inspired.

Final note…

To make your incentive program for channel partners successful, ensure that you go slow in the beginning. Pick up speed as the program starts to generate results. And, accelerate even faster when you are sure that the program is moving as per expectations and all set to achieve the grand goals. 

Want to evaluate your sales incentive program for channel partners and also automate it? My Incentives can help. Book a one-on-one demo today.

For a lot of businesses, a considerable percentage of their revenue comes through indirect sales channels. And for a long time now, channel partner rewards and loyalty programs have been adopted by organizations to drive consistent performance among their distributors, retailers, franchise stores, influencers and more. While some of these programs have been successful, a lot of others have failed. Yet, among the sales fraternity, there is a general knowledge that if implemented and managed well, channel partner loyalty programs have huge potential to drive the bottom line. 

Let’s dig a little deeper. 

Channel Partner Rewards, Incentives, and Loyalty Programs – What Do Statistics Say 

The Incentive Research Foundation (IRF), a US-based not-for-profit foundation recently published in a marketplace survey that almost 43% of US businesses run non-cash channel reward programs. Various case studies in this context by the Foundation hint at an approximate 32% increase in revenues of businesses that invest in channel partner reward programs and a 30% increase in market share has also been recorded. 

It further states that such programs help increase product/brand awareness in channel partners by 71%, sales and market share by 67%, and push customer loyalty and satisfaction by 55%. 

These pieces of data are very powerful and revealing. In the context of a channel partner loyalty program, organizations can uncover immense hidden opportunities if planned and executed well. 

But what are these opportunities, to be more clear? 

Here are the three reasons to invest in channel partner loyalty programs 

• A well-defined program drives channel partner brand loyalty

It’s a competitive world out there. Fiercely competitive. Incentivizing your channel partners appropriately and going beyond their expectations can give your business a leading edge in the marketplace. Cash and non-cash rewards, lifestyle and financial benefits can boost their enthusiasm and motivation to work around your brand and products. 

Businesses strive so hard for customer attention. They incentivize them in multiple ways to keep them; turn them into loyal customers. The same kind of drive needs to be focused on channel partners too. After all, your partners are helping you sell your products and services.  

With evolving technologies, there has been a paradigm shift in channel partner rewards too. Most partners prefer non-cash rewards, for example, free foreign trips, shopping vouchers, etc.  

It also makes perfect sense to give a percentage or share of your profit to the people who are making it happen on ground zero. Consider a channel partner loyalty program that is inclusive of profit sharing. It will make your channel partners confident of the relationship and gives them a much-needed sense of security, encouraging them to put in committed efforts for your products/brand. 

Take the case of Cisco’s Channel Partner Program which offers value-added rewards like providing training and tools to resellers. This has helped the partners to increase their profitability alongside Cisco. These partners are also allowed to reinvest their rewards when they sell specifically targeted technologies. 

•  Lets your business grow organically

One of the key takeaways of a channel partner loyalty program is how a unique program can guarantee the organic growth of your business. This is because of the synergized relationship between your business and that of your channel partners. The marriage should work well for both partners with a ‘give-and-take’ philosophy deeply etched into the relationship. For obvious reasons, the program needs to be well-designed meeting the needs of the channel partners.  

Invariably, once you have aligned channel partners, sales and revenue boost will happen on their own.  

A notable example, in this case, is that of Dell’s Partner Program Reward. The Program is designed to build long-term sustainable relationships with partners staying true to the corporate belief that “you must spend money to create money.” This viewpoint has helped the company retain partners, increase partner retention and add new partners. The loyalty program of Dell helps partners earn marks or points which they can then exchange for e-vouchers.  

Implementing such a reward system that is points-based is simple with high-tech platforms like My Incentives. It offers seamless integrations that track performance and ensure optimized rewards and incentive payouts. 

• Helps leverage the channel partner’s market and clients

Every channel partner of yours has a well-defined territory, list of top clients, top-performing geographic regions, etc. When you reward your channel partners with a loyalty program, your access to such markets and client base is empowered and enhanced. Backed by consistent support and resources and a loyalty program that is synced with the business goals of your channel partners, it gives you direct access to a market that would have taken years to develop on your own. Your sales and revenues automatically get a boost with the channel partner reaching out to new potential customers and leads. In such cases, the lead conversions are not a time-taking process as the channel partner is dedicatedly involved in ensuring conversion. 

Parting thought… 

Loyalty programs empower your channel partners. When oriented properly, the gains can be meaningfully streamlined as the partner’s top priority would be to focus on your brand, products, and services. Additionally, the word-of-mouth publicity that your brand gets helps amplify brand credibility, sales, and revenues for your brand. 

Driving channel partner loyalty programs can often be tedious and time-consuming. But with the right sales commission and incentive software, you can break through these challenges. My Incentives powered by GRG India is one such platform. If you would like to know how My Incentives can help, get a free demo with our product experts.