You have probably seen channel incentive programs work effectively at other companies. You may have also seen how they can motivate distributors, dealers, contractors, and other sales agents to step efforts and drive higher revenue. Channel incentive programs are a smart business investment. They are designed to drive partner behaviors, strengthen partner relationships, and improve sales.
Channel incentive programs can be leveraged to do more than boost sales. Many companies use channel incentive programs to launch new products, gain market share, raise brand awareness and loyalty, develop and incentivize brand ambassadors, and increase profitability.
If you haven’t run one of these programs, or you are taking on the task of implanting or enhancing a program at your workplace, you won’t want to overlook these best practices for setting your program up for success.
Understanding True Channel Incentives
True incentives are always based on performance and aim to motivate, engage, and recognize your partner base. True channel incentive programs do not use cash prizes, nor do they gift bonuses or other monetary rewards. Effective channel incentive programs reward your sales partners for changing their behavior and ideally help to boost their sales performance.
Non-cash programs help set clear goals for sales representatives as the program encourages them to visualize the television or tablet or computer or home furnishings they want to earn. This creates a direct line of sight between the program participant’s behaviors and their award. So, the program makes it easy for a person to see how much more they need to sell to receive their award.
Channel incentive programs are built strategically to motivate your partners and motivate them to sell. Programs are easy to use, engaging, and can improve sales performance and boost partner loyalty over time.
Define Program Objectives
For a channel incentive program to be successful, you must define and set clear objectives for the program from the very beginning. It isn’t enough to set a goal to sell more. You should specify how much more you want to sell and who will be purchasing your products. You must also create a plan that utilizes your channel incentive program in a way that engages your sales partners and motivates them to be part of reaching those goals.
Clearly defined objectives serve as a roadmap for success. Knowing what your company goals are and aligning your program to those goals can help you achieve those goals much faster. For example, if you want to sell 10,000 more units of a product, you might use your program to motivate your channel partners by offering them additional incentive points or a specific reward to the first sales agent who sells 1,000 units.
Having defined objectives before initiating a channel incentive programs makes it possible to customize the program around those goals. Engagement modules can be built to motivate sales agents towards specific behaviors and maximize program results.
Communicate Program Objectives and Strategic Plan
Most channel incentive programs fall flat due to poor communication and little to no direction. While you may have a clear set of goals, and your program may be attuned to those goals, it can only be as effective as the sales representatives who are using the program. If you don’t promote your objectives in a way that resonates the importance of employee participation, they are never going to find the program, or your objectives, as important as you do.
Communication is key when launching a new program, making changes to an existing program, and even highlighting sales partner achievements through the program. Program participants should be able to log into the program and not only have a defined set of goals but also be able to see where they are appreciated and that their work is effective in reaching those goals. Having a clear set of goals can help sales channel partners create a strategic plan for achieving those goals. Communicating how much you appreciate their work through rewards and incentives is a motivator for partners to continue working hard.
Incentive programs offer a variety of ways to communicate and promote company objectives and keep sales agents engaged with meeting those objectives. It is up to you to continuously promote the program in a way that motivates positive behaviors as well as generates energy and excitement.
Track the Data
Data collection through the incentive program is important for proving program success. Knowing how to track the data and determine its value to your organization are essential to the longevity of your channel incentive program. Remember those defined program objectives you set before launching your program? How will you know if those goals are being met if you are not using program data to track success?
To create a thriving channel incentive program, make sure the goals and objectives you set for sales agents and the program are attainable. When you set achievable goals and communicate those goals effectively with your sales partners, you should be able to collect and analyze data that proves program impact. That data can be leveraged when determining how rewards are given, what new incentives you’ll launch, and whether or not maintaining a program is worth the return on investment.
Through data tracking, you can see what is working and what is not working to make adjustments and offer additional incentives as motivators. The data you collect could help define ideal behaviors and formulate new program initiatives that make a stronger push towards program success.
Anticipate Slumps and Boost Long-term Program Effectiveness
Return on investment is a phrase anyone in charge of budgeting is familiar with hearing. Company leaders want to know how you are justifying the expenses of the program. Your channel incentive program might fall under scrutiny if you’re not prepared to show the effectiveness of the program.
Incentive programs are an excellent way to motivate channel partners to set, work towards, and achieve big goals. But, they are also a great way to launch short term goals. Using the program to foster achievement in both long and short term goals can enhance the life cycle of the program and set your organization up for continued success year after year.
When you collect data with an emphasis on showing return on investment through a mix of short and long term successes, you ensure it remains healthy for the long run. Consider setting a few long-term, steady program goals and strategically sprinkling in spurts or bursts of short-term, easy to achieve goals throughout a year. Use communication, earnings, and awards to motivate sales channel partners to keep up participation when you anticipate a slump.
Not sure how to determine if a sales slump is coming? Use data collected over time to discover sales trends.
Where sales higher at a certain point in the year? Were you running a specific incentive motivator to encourage sales agents to sell more of your product at that time?
Analyzing this data and pointing out specific patterns can help you anticipate when sales are expected to rise or fall. You can also track which short-term incentive program activities were the most successful and decide whether or not you should make them annual events. Maybe in June, you offered sales agents an additional 500 incentive points towards rewards for reaching a specified sales target. If this initiative was successful, consider hosting it each year to curb a sales slump and keep participants motivated. This method helps show return on investment as profits continue to climb even during slow months. It also proves long term success for your incentive program and extends its effectiveness as a tool for building and maintaining relationships with partners year after year.
A well communicated, data-focused channel incentive program can have a significant impact on your organization’s profitability. When you understand the true purpose of channel incentives, set specific goals and communicate program objectives, and track and analyze data to make adjustments and set new program goals, you can prove program return on investment and see positive results.