Incentive Strategies: Four Steps to Optimizing Channel Incentive Planning
As the 2020 year approaches, you’re probably deep into planning your channel incentive programs for next year. However, do you know how to choose the right incentives that influence the right reseller behaviors? Can you ensure your channel programs are executed flawlessly and achieve desired results? Incentives help keep the channel ecosystem engaged and motivated. But, understanding what combination of incentives make the right mix that will motivate your channel can be challenging.
Here is a simple four-step approach for planning, selecting and optimizing your channel incentive strategies.
Step 1: It All Begins with Developing Achievable Goals
To kick-start the incentive planning and selection process, think about aligning your organization’s business strategies to overall channel growth goals. But how do you go about creating valuable goals? Start with developing goals that are specific, attainable, measurable and timebound.
In most cases, incentives are not aligned to overarching channel strategies. Instead, they are used as a costly and tactical quick fix. To modify the behavior of your target audience and gain a more holistic reseller experience, you need to have a clear understanding of the change you want to achieve, and how long you are giving to achieve it.
To learn more about what makes a good goal and how to create one, read this guide on Channel Incentive Planning.
Step 2: Know Your Target Audience & Their Attributes
The second step in the process is to identify your channel segments and their personas and understand what different incentive types they are motivated by. To put it another way, you need to get people who are doing something today, to do something different tomorrow.
There are typically four common audiences found in channel ecosystems. These include, Consumers (B2B) or (B2C), Sales Associates, Resellers and Distributors. These various channel segments are motivated by different incentive types, programs and structure. For more detailed descriptions of each channel segment and the incentives they are motivated by, download the Channel Incentive Planning guide.
Keep in mind, not all incentives work or fit each channel segment. To properly engage with your audience, it’s important to use a planned approach that aligns incentive types, goals and objectives.
Step 3: Influence Behaviors with Incentives & Leverage KPIs to Determine Success
Incentives only work if you can measure the behavioral change. Always start the third step in the process by asking, “what needs to change to achieve my goal and how would I measure that?”
There are generally four big categories of measurements in the channel that include, Enablement, Market Development, Revenue Achievement and Managed Business Objectives. Each category has specific KPIs that are commonly used to determine success.
Remember, when planning an incentive program, it is important to keep in mind that if you can’t measure it, you can’t use an incentive.
Step 4: Bring It All Together – Don’t Take a One-Size Fits All Approach
The final step in the selection process is to consider the best mix of incentives that match your targeted channel segments, the behaviors you are looking to change, and their personas. Generally, there are six main incentive types that are commonly used in channel marketing programs. These include, SPIFFs, Reward/Loyalty Programs, Volume Rebates, Sell-through Allowances, MDF & Co-Op and Consumer Rebates.
Think of these incentives like a toolbox where there’s a right tool for every job. The key is to know which tool to use for each goal or objective. And try not to forget, don’t take a one-size fits all approach. Instead use a combination of incentives and align the entire channel to the goal.
Incentives are designed to influence behaviors and are best utilized with a thought through goal in mind. Once you have selected and deployed the right mix of incentives, they should be reviewed and monitored regularly to ensure they are driving the right behaviors and delivering against your desired business goals.
If you remember to follow these four steps when planning and selecting incentives for your channel programs you should be able to achieve your goals and desired results.
However, if you’re looking for bit more help planning your incentive programs, review the framework outlined in the Channel Incentive Planning and Selection Guide. This approach will provide you with best practices on how to optimize your incentive strategies and ensure you navigate the nuances of achieving channel program success in 2020 and beyond.
The 360insights’ Channel Success Platform™ is the first truly integrated channel SaaS platform enabling brands to deploy, manage, measure and optimize all of their incentives programs in one central location. Based in Whitby, Ontario, the company serves over 150 of the world’s top brands and has expanded to have operations in both the USA and Europe. 360insights has won a succession of awards for growth, being one of the fastest growing technology companies in North America.
Learn how 360insights can help you achieve greater success in your next rebates program.