Although headwinds still abound for business in 2023, the data shows incentives are still a top priority for C-suite decision makers. In October 2022, we surveyed industry leaders in key verticals, including automotive, consumer durables, and technology, on their channel incentive strategies with interesting results.
You can read the full report here: 2023 State of Channel Incentives: Tacking Against the Headwinds.
Beyond the numbers, the data points to shifting attitudes and approaches toward both traditional and non-traditional incentive programs, with emphasis on budgeting and bottom-line benefits. From an Eagle’s Nest view, here a few key highlights and trends to note:
- Capturing mindshare is a top benefit and challenge across industries
“Increased mindshare” was listed as a top benefit of incentives across all industries, although technology leaders in particular described it as their number one benefit. But if we dive into the details, this trend points to shifting consumer attitudes and issues of brand relevancy and authenticity.
As we’ve previously highlighted, consumers today want more than points-for-purchase; they want rewards for their loyalty. This means incorporating behavioral incentives (compared to cash-only rewards) into loyalty programs, which industry leaders also described as a top challenge. In fact, 55% of leaders in all industries said they lacked efficient models for non-traditional programs, which means more support is needed to ensure brands can meet consumer expectations.
Bottom line: There’s a clear opportunity for manufacturers – and especially technology vendors – to use non-traditional programs to capture mindshare. But success will require support from expert partners who understand how to implement non-traditional programs.
- Expanded partnerships and program utilization are key to effective budgeting
A notable 87% of respondents were concerned about unclaimed incentive budgets and under-engagement in their programs, but 60% also believed the strength of their partner relationships was the strongest driver for claiming and redeeming incentives. Like consumers, partners are similarly interested in non-traditional incentive strategies.
Brands are also interested in adopting unconventional partner models, looking beyond the traditional channel relationships to include both industry and digital influencers in their incentives strategy.
Bottom line: Partnerships continues to be a core theme woven throughout the data, as the strongest ROI is achieved with high partner engagement. But more partners to manage and incentivize means more complexity, which leads to a need for streamlined and flexible technology investments in addition to new incentive strategies.
- Reducing technology complexity and program friction provides a path to success
Nearly half of all respondents said they used 3-5 vendors to implement and manage incentives, with some using 11 or more. Application complexity was another top listed challenge, with 61% of participants reporting that their current systems were hard to use. Internal stakeholders running programs face similar problems, describing the need for multiple applications and interfaces to run their programs as a roadblock to effective program utilization.
Manual methods like spreadsheets and other technology-adjacent challenges, like a lack of flexibility and the inability to effectively measure data and ROI were also concerns for brands across industries.
Bottom line: Consumers and partners demand more from their relationships with vendors, but that also means more program complexity and technologies are needed to fill in the gap. The good news is that as leaders invest in automation to overcome these challenges and implement non-traditional programs, the more responsive their partner ecosystem will be.
For a complete picture of the data, including insights and takeaways, read the full report here: 2023 State of Channel Incentives: Tacking Against the Headwinds.