Channel Incentives Guide: Part 2

In the first part of our Channel Incentive Guide we looked at the psychology of channel incentives and whether programmes worked. In part two of the series, we look at programme considerations, objectives and identifying your participants.

 

1. Channel incentive programme considerations

Where to start  with channel incentivesA key consideration is that you need to understand the businesses and objectives of your participants. By doing so you can design a channel incentive programme that is mutually beneficial to both you and your partners. If your programme is not beneficial to your partners then they will be unlikely to engage and participate in it.

Other considerations:

  • Complex programmes and ambiguity destroy the value of a channel incentive programme. Keep it simple.
  • The longer recipients have to wait for their reward the less it is worth to them, and therefore it isn’t as motivating.
  • People don’t just work, or sell, for money. Recognition matters as much as financial incentives.
  • Be realistic about what you can achieve with your budget in the first year, and in the years following.
  • Plan how you will monitor your programme so that you can improve it. Don’t be afraid of asking challenging questions. As the saying goes, the definition of insanity is doing the same thing over again and expecting a different result.

 

2. Setting channel incentive objectives

When it comes to setting objectives you need to start by defining what makes a difference to you, what makes your business success. From there you can start to define your campaign objectives.

Usually channel incentive campaigns focus on sales targets, but you may want to include less tangible objectives such as:

  • Develop a strong brand which partners feel proud to be associated with and enthusiastic about.
  • Reduce bureaucracy and be seen as an organisation that is easy to do business with.
  • Improve the education of your products and services with your channel partners.
  • Improve relationships with your channel partners and increase partner loyalty.
  • Drive behaviour that improves the experience of the brand for the end customer.
  • Improve service levels.
  • Enhance staff skills.

It’s a good idea to establish a mix of both quantitative goals – revenue, profit, sales units – and qualitative goals – end customer satisfaction, partner loyalty, living brand values – which are aligned to your overall business objectives.

 

3. Identifying your participants

dealer incentivesLike any incentive programme, channel incentives are more effective when they are properly targeted to their audience. This means understanding your distribution channels, partners and customers, so that you can target those that offer the most value and potential to your organisation rather than attempting to recruit everyone into your programme.

You should also consider whether all staff and/or customers will be able to take advantage of your programme or whether you will restrict it to certain roles or departments. Some key considerations when deciding on this are:

  • Which distribution channels, partners and customers contribute to achieving your overall business objectives?
  • Does everyone in your distribution channels, partners and customers contribute to the overall goal or objective of the incentive?
  • If not, which roles and/or departments do?
  • Is there the potential to demotivate supporting staff if they are not involved? For example, motor dealer receptionists can play a key role in the customer experience but may not get a reward for sales or servicing targets.

 

In part three of our Channel Incentives Guide we look at selecting rewards, cash v non-cash rewards and communication >>

 

John Sylvester

John is responsible for the motivation division of p&mm ltd and a Director on the board of the IPM. Specialising in developing, implementing and directing many large scale staff motivation, recognition and employee communications programmes.
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