Picking The Right Carrots: How to Effectively Incentivize Your Channel Partners

By Seth Jacobsen Posted on 10/4/16 10:25 AM

When it comes to inspiring better performance among your sales partners, one of the most reliable options is the incentive program. Whether you're fighting to increase mindshare among sales reps pushing many competing brands, or simply looking to boost sales among dedicated franchisees or VARs, incentive programs have been shown to be highly effective.

But of course, there are a lot of possibilities for incentive programs out there, and not all of them are as effective as others. Some can even end up being money pits, if they cost more to implement than they bring in via increased sales.

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Types Of Incentive Programs You Can Implement

1 - Sales Discounts

One of the most tried-and-true incentives is the good old bulk discount. Give your best performing sales partners increased margin, especially if they're also moving high volumes. It incentivizes them to keep working with you, while directly increasing their bottom line by lowering their costs.

The possible downside to this is that it could upset under-performing partners. It is important to have your performance criteria in writing so all partners understand expectations. With the proper rules to qualify for better discounts, this can be something nearly everyone in your ecosystem can aspire to.

2 - Gradual Product Rollouts

You may not always want to roll out a new product across the country (or the globe) all at once. There can be plenty of infrastructure reasons for this, especially when it comes to SaaS products that rely on cloud systems that may not be able to cope with huge new demand. A slow, gradual rollout is often better than a botched large-scale deployment.

In such cases, it's only natural to give your preferred partners first crack at your latest-and-greatest release. You'll also be able to use their feedback to smooth further rollouts and make the transition easier for the rest of your partners. 

3 - Individual vs Team Bonus Incentives

Another tried and true incentive method is handing out end-of-year bonuses to top performers. But is it better to reward teams or individuals?

According to a study commissioned by Channel Partners Online, the answer is very clearly "individuals." 70% of respondents surveyed said they dislike team-based incentive programs. Apparently, this basically is due to the frequent perception (whether it's accurate or not) of specific team members dragging everyone else down, and creating resentment as a result. No one wants to feel like their team missed a great prize due to one underperformer, and it's even worse to think one is that underperformer.

So whatever rewards you hand out, base them on individual performance.

4 - Preferential Cross-Marketing

As we've discussed many times before, your own webpage and other online outlets are a great source of lead generation for your sales offices. Having a "Spotlight On..." style feature highlighting the best-performing sales groups can be a powerful and extremely inexpensive incentive program. You're rewarding your top sellers with even more exposure, while the only expense is the cost of a blog or video post.

However, this is another one where you need to be careful not to promote certain partners so heavily that it permanently disadvantages the others.

5 - Ensuring Your Partners are Properly Trained

Training and certification programs are true examples of leading indicators that help channel managers determine how prepared their channel partners are to sell effectively. Training can take many shapes and forms: sales training, marketing training, technical training to name a few. The point here is that most users are more likely to engage in training activities if there is incentive attached. Unlike training a direct sales force, where you have the ability to enforce training requirements, channel partners are usually harder to engage. This is where incentives play a key role in helping to ensure your indirect sales team is properly motivated to take part in the learning activities they need to be more successful.

Whatever Incentives You Use, Keep It Simple

Finally, be certain your incentive programs are easy for partners to use. If you're adding too much paperwork to their pile, they may simply not bother. By focusing your efforts on some of the key activities your partners need to close more business, the sales results are bound to follow.

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