Where to start when setting up a channel sales incentive?
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Craig Thomas

Where to start when setting up a channel sales incentive?

25th April 2018

When you're setting up a channel sales incentive for your business there are a few key questions you need to ask yourself. Who are your partners? What motivates them? What are you hoping to achieve, and how?


Who are your partners?

To really make an impact, you need to ensure your channel sales incentive programme targets the right audience. It sounds simple, but the foundation of any programme's success is gaining a greater understanding of who you need to target - and therefore who you want to take part in it. If you're able to target participants who can genuinely bring something to your business then you'll see a much better return on your investment.


A couple of the key questions to ask:


  • How do your distribution channels work? Who are the partners within it and who have the most influence on your business goals? Your distributors, wholesalers, dealers, retailers or the end customers?
  • Assuming you are targeting businesses, does everyone within the business have an equal role to play in achieving the goal? If not, do you need to target more specifically, for example, individual people or departments?


It's also worth considering whether your incentive should include roles which may not be directly related to sales but can still have a direct impact on performance, such as customer service representatives.


What are your objectives?

You need to define your goals clearly at the start. Remember, channel sales incentives don't have to be purely about setting sales targets. There are generally other factors at play within the channel that may well be impacting your business performance - and ultimately sales.


Consider incentives that:


  • Improve skills within your channel partners - so it's a win-win relationship
  • Encourage working processes that ensure you are seen as a company that's easy to do business with
  • Improve your relationship with your partners to increase partner loyalty
  • Encourage channel partners to learn more about your products and services
  • Reward behaviours in the channel that give your end customers a better experience
  • Strengthen the image and perception of your brand within the channel to make your brand more appealing to your partners


The design of sales incentives can be 'make or break'

Channel sales incentives are almost always a good idea in theory. However, the implementation can be problematic if the programme has been badly designed or is not a good fit for the channel.


So, it's important to:


  1. Keep it simple and clear. Overly complex programmes that don't clearly define the incentives are generally not effective.
  2. Think outside the average. Recognition is often as important a reward as money or cash incentives.
  3. How will you measure success? Monitor the programme once it's in place to give yourself metrics to work with in terms of ongoing improvement.
  4. Don't aim too high. Be realistic in terms of time and budgets involved and use your channel sales incentives to build steadily.
  5. Provide timely reporting. Make sure your participants clearly understand their targets and how they are performing against them
  6. Reward success promptly. Remember, the longer recipients have to wait for their reward the less it is worth to them and therefore it isn't as motivating.


Communication, communication, communication

Communication is a key part of any sales incentive programme. So you need to map out a communication plan that covers every stage of the process. From the launch - where you're looking for partners to sign-up and communicating the targets - through to sending regular updates about the programme and performance to maintain engagement.


It sounds obvious, but when planning your communications, don't forget to take into account the way your partners prefer to be reached. Do your partners prefer to be contacted by email, phone, direct mail, SMS, social media or face-to-face? And what contact options are available to you? If you're going to be communicating primarily by email, for example, have you got email addresses for all your participants and permission to contact them in this way?


Keeping your channel sales incentive constantly in the mind of its participants is an essential part of ensuring its success.


If you'd like to know more about how to implement channel sales incentives - and what else you might need to consider - Active can help. Contact us to find out more.


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