How to measure the success of your channel sales incentives
Like any business investment, finding a way to measure the success of an incentive programme is key. Part of the process of designing an effective channel sales incentive programme is defining the ways in which it will be monitored and what it should be measured against.
Generally, the performance of a channel sales incentive is monitored and measured against Key Performance Indicators and the Return on Investment.
Key Performance Indicators (KPIs)
It's your KPIs that will provide the benchmark against which the success of your channel sales incentive will be measured. With the right KPIs in place you will be able to show how the incentive has performed, both as a standalone initiative and in terms of helping to drive the business forward towards meeting its broader goals.
Which KPIs should you use?
There are no defined KPIs to use - it will depend on the programme, the participants, and also your business and its objectives.
Your KPIs in some ways will be defined by the main objectives of the programme. For example, if the incentive is to 'book more appointments' then by definition 'the number of appointments booked' will be one of your main KPIs. However, in most cases there will probably be a range of other criteria which you will also use to gauge the overall success of your incentive.
Here are some typical KPIs for channel sales incentives:
Return on Investment (ROI)
ROI is often used pre-launch in order to build a financial business case for running the programme in the first place. It will then also be used to judge the performance of the programme on completion.
In simple terms, you can evaluate the viability of running an incentive (and, in effect, check it will be self-funding) by comparing the expected gains from the incentive to the investment costs.
For example, the expected ROI for a new sales incentive programme that is expected to cost £200,000 and deliver an additional £300,000 in increased profits during the same time would be calculated as follows:
ROI = (Gains - Investment Costs) / Investment Costs = (£300,000 - £200,000) / £200,000 = a 50% ROI
ROI is usually based on a purely financial consideration. However, there are times when your objectives - and therefore the way you measure your ROI - may be more subjective. For example, if your objectives are to get market share or promote your brand, then your ROI might be measured in terms of meeting one or more of these objectives, rather than in immediate profit or cost saving.
Monitor, measure and modify
Remember, it's important you are monitoring your KPIs and measuring your ROI on a regular basis throughout the programme. It's too late to leave it to the end. If your channel sales incentive isn't performing as expected, be prepared to modify it as you go along to make sure your end goals are met.
Defining and monitoring your KPIs is essential to ensuring your channel sales incentive delivers ROI. Active's online incentive platform gives you the tools to do just that. Contact us to find out more.
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