Channel Incentives Guide: Part 4

key performance indictatorsIn the third part of our Channel Incentive Guide we looked at selecting rewards, cash v non-cash rewards and communication. In this forth and final part, we look at key performance indicators, examples and best practice.


1. Channel incentive key performance indicators

For any incentive programme to be a success, it needs to be tracked and measured. Checking what works well and what doesn’t work so well, is vital to the success of the programme and any future initiatives you may set up.

You should define the Key Performance Indicators (KPIs) that you will measure your programme against during the planning process. By doing so, you will be able to align your KPIs to the scheme objectives and demonstrate the success of the programme in meeting the wider business objectives.

Measuring the success of a channel incentive programme can be a challenge, but here are some KPIs that you could measure:


  • Participant registrations
  • Registrations as a percentage of potential participants


  • Participant earnings
  • Sales activity
  • Training activity

Redemption rates

  • Redemptions
  • Points balances
  • Outstanding liability of points or pounds
  • Categories of redemption (i.e. travel, merchandise, spent in restaurant)


  • No of educational modules taken
  • Understanding of brand values demonstrated (through recognition sent/received linked to your core values)

Other KPIs

  • Feedback from participants
  • End-user customer satisfaction survey
  • Cost per participant


2. Channel incentive examples

A channel incentive programme is a tactical marketing tool that is designed to deliver on strategic business results. These two case studies show how p&mm’s clients are using such programmes to drive sales, improve product education and increase cross selling.

Example 1

A major commercial vehicle motor brand used a channel incentive programme to drive sales and provide dealer recognition. Using an online portal enabled dealership staff to stay up to date with product news and offered tactical incentives. The programme also featured a highly personalised communications plan that segmented the audience, so they only received communications and incentive rewards that were relevant and appealing to them.

Example 2

A well-known car brand used their programme to increase sales of specific car models and encourage finance agreements. They used a secure website to keep individuals up to date with the programme and improve product knowledge. Individuals were rewarded with a branded prepaid MasterCard® card which also offered cashback on purchases.


3. Best practices

best practiceVendors can’t afford to put a channel incentive programme in place and hope for the best. It needs to carefully planned and thoughtfully implemented if it is going to be a success.

Here are some best practices that will contribute to the success of your programme:

  • Align the programme objectives to your business objectives
  • Decide on your programme start and end dates depending on what you want to achieve
  • Know the competition and what their channel incentive programmes offer
  • Focus on the individual participant – make rewards achievable and communications appealing to them
  • Make sure the effort is worth the incentive reward
  • Communicate your programme clearly and concisely using a variety of platforms
  • Include your own reps or channel managers in the scheme development
  • Monitor your KPIs and improve your programme where appropriate



There’s no doubt that channel incentives deliver results both for the vendor and their partners.

Studies show that over a third of sales can be attributed to the effort put in to achieve a reward or incentive. When a major car brand ran a segmented incentive programme they:

  • Boosted sales totals and drove specific measurable add-on benefits
  • Generated a 35% increase in sales of its luxury marques
  • Increased accessory sales, increasing penetration from 50% to 82.5%.

However, the programme needs to be properly planned just like any other incentive scheme. This means aligning your programme objectives to your business objectives, understanding your target participants and offering rewards that are worth the effort involved to achieve the objective.

Get your channel incentive programme right and you will you create a powerful brand asset that will help you build relationships with your distribution channels, partners and customers, address challenges and achieve your objectives.


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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