The right channel incentives can drive brand loyalty and improve indirect sales.
Maybe that's why 84% of U.S. businesses use incentives to drive sales behaviors. In fact, U.S. businesses spend $176B per year just to motivate their channel partners. But which channel incentive program is right for you?
In this short guide, you'll find a mix of cash vs. non-cash incentives to help you choose.
We'll share the top partner incentives businesses use to grow and scale today. We'll also share how you can use them to increase revenue in your business. If you're looking to increase market share, brand loyalty, or sales, this list is for you.
Read on to learn the top 21 channel incentives proven to motivate channel partners.
What Are Channel Incentives?
Manufacturers use incentive programs to shape channel partner behaviors.
These incentives influence distributors, resellers, retailers, and other partners to meet business objectives. For example, exceeding sales goals, meeting KPIs, or expanding product knowledge. In return, these partners earn perks, rewards, or bonuses for meeting desired outcomes.
Channel incentives reward partners for their brand loyalty and this creates strong relationships.
The best news is channel incentives are very flexible!
You can offer event tickets, bonuses, luxury getaways, rebates, or even discounts. Your only limit is your imagination. By offering incentives that match partner needs, you can drive better results.
Why Do Businesses Need a Channel Incentive Program?
Influencing channel partners has never been more important.
According to online estimates, 75% of all trade flows through the Channel. Manufacturers rely on channel incentives to increase partner engagement. A well-structured incentive program can help brands stand out in competitive markets.
Partner incentive programs offer a strategic advantage.
Sales incentives can encourage partners (and their sales reps) to promote your products.
This is especially important in competitive industries like manufacturing and technology. Channel incentives can help you stand out against a sea of similar products. It also communicates to partners that you invest in their success as much as your own.
Manufacturers often compete for channel partner preference during the sales process.
Offering the right channel incentives can be a deciding factor for channel partners.
What Are the Benefits of Offering a Channel Incentive Program?
The right partner incentives can fuel growth, expand market share, and increase efficiency.
Here are a few core benefits of channel incentive programs:
Strong Partner Relationships: Incentives support collaboration with partners. This creates a win-win strategy that aligns business goals.
Increased Partner Engagement: Incentives support partner engagement in the Channel. More buy-in from partners improves brand loyalty and helps boost sales.
Supply Chain Efficiency: Incentives can help improve inventory practices. Better inventory management helps partners grow and scale.
New Product Launches: The right incentive strategies can boost sales of new products. Partners can gain early access, bonuses, or higher margins for promoting your products.
Clear Out Inventory: Incentives can help clear out excess inventory. Offer special promotions, discounts, or cash rewards to clear out inventory.
Data Collection: Incentives can help you learn more about your customers. As third-party data collection becomes a thing of the past, partners will play a pivotal role.
Channel incentive programs provide a competitive advantage. They promote strong partnerships, efficiency, and opportunities to scale. They also offer long-term brand loyalty as you grow.
Types of Channel Incentives
No matter the industry you serve, building stronger partnerships is key. This list of proven channel incentives will help you strengthen business relationships. If you want to increase sales, move more products and services, or grow market share, read below:
1. Sales Performance Incentive Funds (SPIFFs)
Sales performance incentive funds, or SPIFFs, are a popular type of sales incentive. SPIFFs offer sales reps an immediate cash bonus upon meeting specific sales targets. It's an excellent way to get partners to promote your products over other competitors.
Pro Tip: Use SPIFFs to build brand awareness in new markets or during product launches. Manufacturers can offer a cash bonus after reaching a sales milestone of a new product.
2. Rebates
Rebates are a classic channel incentive that help increase order frequency and volume. Partners earn cash back on inventory sold over time. It’s an excellent way to encourage on-going product movement.
Rebates offer partners an immediate cash benefit for selling your products.
Pro Tip: Use product rebates to encourage sales of slow-moving or new products. Make rebates time sensitive to boost sales performance.
3. Tiered Discounts
Tiered discounts recognize and reward your top-performing partners. They offer higher discounts on products based on order volume. It’s the perfect way to build strong partner relationships.
Tiered discounts incentivize partners to order bulk quantities of fast-moving products.
Pro Tip: Use tiered discounts to increase brand loyalty from mid-level partners. Be sure to communicate the savings they can receive on higher order volumes.
4. Training Programs
It's no secret that product knowledge and sales go hand-in-hand. Educational incentives like on-demand training modules can boost sales performance. Consider offering certifications for product or industry knowledge.
Pro Tip: Gamify educational incentives with real-time leaderboards during the onboarding process. Attach trainings to rewards to fuel friendly competition and boost engagement.
5. Early Product Access
Early product access is a great way to test the market and get feedback from channel partners. This can help build brand loyalty. It also shows the advantages that come with being a loyal channel partner.
Pro Tip: Combine early product access with a short-term SPIFF or Rebate promotion. It's an excellent way to get early wins you can share with other partners when it's time to launch.
6. Exclusive Events
Exclusive events are an excellent way to engage partners and build stronger relationships. You could host events for product launches, special dinners, or even training seminars. It's a great way to show appreciation and recognition for all their hard work.
Pro Tip: Use exclusive events to build pre-launch product buzz and excitement. Offer tips on how to promote the new product with marketing resources, product demos, and more.
7. Co-Op Marketing Funds
Co-op marketing funds are a popular form of marketing incentive for channel partners. Manufacturers set aside funds for partners to use on marketing initiatives. These funds are contractual and accrue based on revenue.
Sharing marketing expenses strengthens channel partnerships and builds trust.
Pro Tip: Use co-op funds to build brand awareness and expand your reach. It’s a great way to publicize new products, promote events, and expand into new territories.
8. Points Programs
Points programs are an excellent way to build long-term partner loyalty and trust. In a points program, channel partners earn points for specific behaviors. You can attach points to sales, on-going product training, and more.
Pro Tip: Use point programs to increase your market share and build brand loyalty. Target your middle 60 and attach points to onboarding, sales, and customer feedback.
9. Market Development Funds (MDFs)
Like co-op funds, market development funds (MDFs) are a popular marketing incentive. But unlike co-op funds, MDFs aren't tied to revenue or contracts. MDFs help partners promote brand awareness, generate sales leads, and fuel business growth.
Market development funds can support marketing for webinars, advertising, trade shows, and more.
Pro Tip: Use MDFs for tactical lead generation, enablement, and product awareness needs. It's the perfect way to strengthen channel partnerships, fuel growth, and drive revenue.
10. Loyalty Programs
Loyalty programs use tiered incentives to motivate channel partners and maximize profits. These reward programs build long-term business relationships centered around brand loyalty. Partners can receive exclusive offers, discounts, cash back, or other benefits.
Loyalty programs are an excellent way to increase market share and strengthen relationships.
Pro Tip: Use loyalty programs to increase revenues and build strong partnerships. Consider tying incentives to order volume, frequency, upselling, and cross-selling opportunities.
11. Performance-Based Incentives
Performance-based incentives can increase revenue, improve market share, and strengthen relationships. It's a great way to incentivize mid-tier customers to reach VIP status. When combined with the right reward, they can be a powerful motivational tool.
Performance-based incentives can help drive sales, customer satisfaction, and brand awareness.
Pro Tip: Use predefined, personalized sales targets for best results. Consider attaching your performance-based incentive to a monetary reward or luxury travel destination.
12. Deal Registration Incentives
Deal registration incentives promote data sharing that can be crucial for long-term success. By offering incentives structured around deal registration, you can gain valuable sales insights. That can lead to better long-term sales forecasting.
Pro Tip: Use deal registration incentives to improve transparency and communication with partners. This can help increase lead generation and boost revenue.
13. Sales Contests
Sales contests are an excellent way to promote friendly competition between partners. The right incentive can motivate partners to push your products versus a competitor. This can lead to higher revenues and increased brand loyalty.
Sales contests work best in a given timeframe with clear parameters.
Pro Tip: Gamify sales contests with leaderboards inside your partner portal. It will boost engagement and drive sales.
14. Partner Recognition Programs
Partner recognition programs highlight channel success and reward your most loyal partners. It's an excellent way to increase partner engagement and boost brand loyalty. You could host events to recognize partners each quarter or each year.
Pro Tip: Offer rewards like an all-expenses paid trip, bonuses, or some other perk. Consider offering discounts, early product access, or personalized marketing support.
15. Referral Incentives
Referral incentives are an excellent way to scale your partner program. Channel partners refer new businesses in exchange for exclusive perks. This could be in the form of monetary rewards, discounts, or other benefits.
Referral incentives generate high-quality leads, build trust, and boost loyalty.
Pro Tip: Ensure success with a well-designed marketing strategy for your referral program. Streamline the process by automating rewards with an easy-to-share and trackable form.
16. Personalized Marketing Support
Personalized marketing support helps your partners expand and grow your business. Reward your VIP partners by offering exclusive content and advertising collateral. It's a great way to encourage mid-level partners to reach for VIP status.
Pro Tip: Use personalized marketing support to better understand local markets. Share marketing wins from your partners in your newsletters or on social media.
17. Product Bundling
Discounting bundled products helps partners sell more and expand their product mix. This can lead to higher order volumes and better inventory management. It's an excellent way to improve inventory efficiency and introduce new products.
Pro Tip: Use product bundles to promote upsells and cross-sells of products. Track the performance of your product bundles.
18. Demo Products
One great way to increase sales of new products is to offer partners demo products for free, or at a steep discount. This enables partners to showcase your products with minimal risk to them. It's a win-win strategy that can bolster sales and improve brand loyalty.
Pro Tip: Offer free or discounted demo products in new territories or on new products.
19. Joint Planning Sessions
Joint planning sessions can be a great way to motivate VIP channel partners. It offers partners a chance to influence business strategies and channel initiatives. It's also a great way to get partners to network for better market solutions.
Pro Tip: Give partners a chance to set the agenda by eliciting quarterly feedback.
20. Dedicated Technical Support
Technical support for top-performing partners can be an attractive option for complex industries. It gives VIP channel partners the opportunity to better support their customers. This can improve their market value in local areas and help them beat out competitors.
Pro Tip: Give top performers a dedicated account manager for solving technical issues.
21. Incentive Travel
Incentive travel offers top partners luxury trips for meeting specific sales targets. These trips tend to be to exotic locations with all-inclusive amenities. It's an excellent way to reward top partners and build closer relationships.
Pro Tip: Let top partners invite a guest and provide downtime for connection. Use corporate social responsibility activities to add to the memorable experience.
Automate and Streamline Your Channel Incentives
The right mix of channel incentives can motivate and support partners at every level. Offering incentives that match business needs throughout the partner lifecycle is key. But it's important to have the right systems in place for partners to claim these incentives.
Give your business a strategic advantage with automated channel solutions.
360insights offers a suite of tools that make automating your channel incentives easy. From partner enablement to claims, payments, and global rewards, we have it all in one platform. Filter partner access with the click of a button or get real-time data in our analytics dashboard.
Improve your partner experience at every touchpoint with 360insights. Supercharge your partner experience, talk to an expert today!
