The Greek philosopher Heraclitus once said: “The only constant in life is change.” You can say that again. So much disruption is happening so quickly…how can you be sure your incentives match the reality on the ground?
According to surveys, U.S. corporations spend $90 billion annually on non-cash incentives and rewards. More than one-third of sales are attributed to incentive efforts, and 77% of sales reps are more willing to sell a manufacturer’s product if they offer an incentive program along with it.
With all the change and turbulence in the marketplace, when was the last time you took a fresh look at how you are rewarding your partners? And, more importantly, looked at what value you are receiving back? Now might be an ideal time to make sure you are getting the ROI you think you are.
Partners more than ever have a choice of vendors to do business with, and those choices come with a range of channel incentive programs. You need to gather and use data to design your strategy around partners and their teams so that all stakeholders derive tangible benefits through earning and redemption opportunities. It’s vital to make sure the carrots you are dangling are attractive enough to secure and foster productive partnerships. The ‘golden rule’ still stands: the more closely your rewards program align with the partner’s business model, while driving the behavior you desire, the better your results.
Reward the right things
What works with one channel partner (or set of partners) might not work with others. To drive success in your programs, you need to minimize rewards for baseline activities (that are likely to happen anyway), increase rewards for risks (i.e. new behavior) and track performance against established targets. In todays’ business environment that might mean additional incentives for customer nurture activities and investment in virtual events and capabilities.
Mind your KPIs
Which behaviors and KPIs do you want to incentivize? Once you’ve defined this, make sure your programs match up with your channel partners’ business models by:
- Combining pre- and post-sales rewards to inspire productive partner behavior
- Rewarding partners for activities throughout the entire sales cycle and customer lifecycle
- Reducing partner effort (improve EODB) to increase partner loyalty and engagement
- Delivering timely and accurate reward fulfillment
Calculate your ROI
So, does it all add up? Be sure to do the math and track key metrics (lift, partner participation, percentage of partners with earnings, etc.) throughout the program lifecycle as well as conducting a post-mortem on your programs to determine what is driving the greatest ROI.
Poet William Arthur Ward wrote: “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” The seas of business are turbulent right now, and change is constant. Once you take a deeper look at your programs, you may discover that your incentives are not working optimally in the current environment. But that creates the perfect opportunity to rethink, re-strategize and re-shape your incentives programs. You might find that a few adjustments will guide you smoothly through these uncharted waters. Adjusting your sails just may help you adjust your sales—in a northerly direction.