Channel incentive programs are a popular choice for businesses that rely on sales channel partners to help the employees of vendors and resellers sell their products or services.
A study from the Incentive Federation, which measured the expenditure of US businesses using non-cash rewards for their employees, customers and partners, showed that the overall incidence of channel reward programs increased by 15% – an overall 57% increase since 2013.
So, aside from their ever-growing popularity, why set up a channel incentive program?
Considering Your Objectives
When it comes to achieving set objectives, there are a range of compelling reasons to set up an incentive program for your channel sales partners:
- Increase your sales and market share
- Raise brand awareness and loyalty across your extended team
- Increase product and brand knowledge within your channel
An incentive program can help you to quickly achieve such objectives and, in turn, bring easily trackable ROI to your business.
Explaining the Benefits
Providing your channel sales teams with incentives that encourage them to meet and exceed sales targets can help to make them feel appreciated and valued. This level of engagement can help create an emotional bond with your brand, which can, in turn, increase loyalty to your business.
More engaged and better-informed partners will sell your offerings more effectively. In turn, it’s likely they will want to do more for you above other businesses they are selling for, making your company stand out from the competition. In doing this, you can develop brand ambassadors – people who will talk about your company in a positive way – embodying your brand and business values.
Incentive programs are designed to make it easy to track performance through opportunity management and leader boards. Integrated platforms make it easy for vendors to track the performance of multiple channel partners - giving them visibility of pipeline throughout a sales campaign. In doing this, vendors can also keep track of the effectiveness of your market development funds (MDF) spend. For instance, you can potentially see direct results from the funds you’ve provided your channel partners with to create awareness of your brand.
Understanding the Impact on Your Business
It’s important to consider the impact a successful channel incentive program can have on your business, in terms of the boost in sales, sentiment, market knowledge and ultimately, the positive effect on your bottom line.
When it comes to understanding your return on investment, this can be split into hard and soft ROI.
- Hard ROI is reflected in the dollars coming into your business.
- Soft ROI involves positive factors that can’t be measured in dollars, including an increased level of engagement, improvement in product knowledge, and an uptake in vendors using your platform and program.
A report from the Incentive Research Foundation (IRF) demonstrates the financial impact of non-cash channel incentive programs. A case study which featured one of the U.S.’s top 500 companies, showed a 32% increase in total revenue, a 30% increase in market share, and a 19% increase in net operating income in those organizations that deployed incentives.
Research also conducted by the Silicon Valley Research Group, a global provider of technology market research and strategy development services, found that incentives boost partner sales by as much as 40%.
Setting Up an Effective Channel Partner Incentive Program for Your Channel Partners
Incentive schemes are the perfect way to improve engagement with your brand and drive a consistent level of high performance with your channel partners, resellers and their employees. The right incentive program can reap major rewards for your channel partners and your business – keeping your brand top of mind and encouraging sales teams to prioritize your products and services above others.