Many companies that rely on partners to achieve revenue goals and expand product reach use channel incentive programs to motivate and engage partners. Indeed, research shows that effective incentive programs can boost sales by as much as 40%.1
However, research also shows that 58% of channel incentive programs fail to meet any of their objectives2, prompting many vendors to wonder if these programs are worth the investment.
“How many times have you heard recently that incentives are dead, incentives don’t work, or incentives cost too much?” asked Cindy Herndon, senior vice president of Channelnomics, in a recent session with Model N. “Incentives are not dead, but they’re incredibly dependent on the work you do to prepare before you execute them.”
Here are the four initial steps Cindy sees as essential to laying the groundwork for an effective channel incentive program strategy.
Step 1: Home in on desired outcomes.
“It’s very important that you understand what your company wants from channels,” said Cindy, adding that the only way to do that is to ask. She recommends going straight to your CEO, CRO, and other C-level decision-makers and asking them to identify their top two to three desired outcomes. Keeping the list short helps avoid spreading funds too thin and allows you to prioritize the most impactful areas.
Step 2: Align business and partner priorities.
“Identifying these desired outcomes and priorities is one thing,” said Cindy, “but then going back and getting agreement on what the channel will focus on is really critical.” For example, your CRO may want to incentivize acquisition of new logos. But if you’re an enterprise company, your partners may have a small handful of customers they’re deeply involved with, making it difficult for them to give you new logos. Instead, an incentive around bringing in new business from existing customers will likely be more effective.
Step 3: Determine routes to market.
The next step, according to Cindy, is to identify who your target customers are, where they are, and how to reach them. “Offering incentives that don’t match your partner profile is just going to be wasted money,” she said. Channelnomics offers its customers a route-to-market assessment that examines geographies, sales models, competitive landscapes, and more, leveraging analytics to determine how best to bring products and services to market effectively and cost-efficiently.
Step 4: Design incentives your partners want.
When it comes to incentives, one size doesn’t fit all, said Model N’s Manager of Solution Engineering Hie Jung Yoon. They need to be designed around specific channel characteristics as well as customer lifecycles. She explained that partners today want incentive programs that are:
- Easy – offering a collaborative, unified partner experience
- Personalized – with tailored incentives aligned to partner business models
- Speedy – with easy-to-understand incentives and self-service tools
- Transparent – providing insight into business impact to motivate the partner community
Clear-cut goals lead to valuable rewards
Leveraging channel insights and personalized incentives to drive partner engagement can result in:
- increase in engagement
- increase in satisfaction
- increase in revenue
- increase in efficiencies
Learn more
Watch our on-demand webinar, “Building Winning Incentive Strategies,” to learn more about how you can design a strategy for better rebate, incentive, and market development fund management.
Model N Rebate Management
Model N Rebate Management helps you better engage your channels to improve and optimize revenue with effective and measurable incentive programs.
1 Silicon Valley Research Group.
2“What Could Make Your Channel Partner Incentives More Successful?”E2Open
