Channel partners are an integral piece of the operation for many high-tech companies. A significant portion of revenue for companies that sell through the channel comes from indirect channels. However, misaligned incentive programs can become a company’s largest expenditure. Mismanaged incentive programs can cause overspending, duplicate programs, and wasted funds, all of which may negatively impact a company’s indirect channel incentive ROI.
There are plenty of opportunities to incentivize channel partners. Many businesses often end up losing revenue, however, because it is such a complex process to manage. If not implemented correctly, indirect channel incentive programs can be a complete drag on your resources. But if your business adopts an automated system with capabilities to identify these inconsistencies, you can cut overspending due to errors, duplicate programs, and fraudulent claims – huge money wasters in the channel partnership incentive world.
Your indirect channel incentive program should be designed to accomplish two things: meet the needs of your partners and drive sales. If your business is seeking the most out of incentive programs for channel partners, this post is for you.
In this post, we will highlight the complexities of indirect channel partner incentive programs and provide solutions on how you can best structure programs to get positive ROI and greater revenue growth.
Finding The Right Program
There are a variety of indirect channel incentive programs out there, and it’s important to choose the right one for your mix of channel partners. MDF, Co-Op, and SPIFF programs are common examples of a plethora of incentive programs. And one of our favorites is gamification. A little fun and games never hurt to drive engagement.
Indirect channel incentive programs can be costly and negatively impact ROI if not properly structured. Just as the way we do business evolves, incentive programs also need a refresher. Change is good. And with companies largely turning to remote options due to the pandemic, and the face of the workforce getting younger, it may be time to give your channel incentive program a makeover.
Multiple Partners with Differing Strategies and Approaches to Selling and Marketing Goods
The channel partner community is extremely diverse with varying business models and programs. Coordinating various indirect channel partner programs with multiple layers can be a complicated process and can lead to confusion. The more channel partners you have and the longer the duration of the partnership, the greater the complexity. This can cause confusion when trying to create channel incentive programs to drive sales. Implement an automated solution to streamline and manage various workflows.
Lack of a Dedicated Team
Usually, companies don’t have a dedicated team to manage their indirect channel incentive programs, which can become quite complex. And because of the complexities, money oftentimes gets left on the table. Appoint a dedicated resource to search for opportunities to incentivize indirect channel partners and then determine the best approach.
No Clear Strategy
Once you decide on the right programs for your indirect sales channels, you need to develop an indirect channel incentive sales strategy. At the very least, your strategy should include methods for managing your current program and identifying new programs.
Rewarding Existing Habits VS. Behavior
Indirect channel incentives are an important component of generating revenue, building customer relationships, and increasing partner loyalty. Positive reinforcement is the key and the goal here is to inspire action in your sales channel partners. Create programs that incentivize changes in new behaviors rather than rewarding existing habits. Incentivize indirect channels to build channel loyalty and ultimately drive greater growth and ROI. You can accomplish this by implementing a progressive model that incentivizes channel partners every step of the way. Start out by choosing an incentive relative to the behavior, and then incrementally increase the incentives as partners reach establish milestones.