You must have heard of the term sales channel incentive if you happen to run a business. You may have also provided your partners incentives under the same program. Have you ever thought how you can use these sales channel incentives the most effective way? What needs to be done to build your sales incentive programs in a way that drive the behaviour in your partners?

What Exactly is Sales Channel Incentive?

Simply put, sales channel incentives are programs or business investments that are aimed at driving partner behaviour. The best incentives are always aimed at improving the yield, reach or mix of your partner base. It also should be performance-based. One thing to keep in mind about these channel incentives is that these are not payment types. Thus, you should not consider them to function as payments. These incentives are either embedded as a part of one of the incentive programs or are used to reward an existing habit. The best channel incentives are ideal to reward partners as a token of appreciation for changing their behaviour. They are usually not needed once the changed behaviour has been established. There are also platforms to manage and encourage the behaviours you are requiring from your channel partners, such as Power2Motivate.

Sales Channel Incentives – The Types

Here are some of the types of sales channel incentives you can implement in your organisation.

1.    Rebates

Rebates are the most common incentive provided by most of the companies. These incentives are targeted at specific moments and specific products. Under this type, the partner is encouraged to sell more of your products as they are volume-driven incentives. The partners get a percentage of the sale of the products that are sold through them. Thus, the partners under this incentive scheme feel more motivated to sell the products.

2.    Activity and Fees-Based Incentives

Are there some activities for the organisation that you cannot do yourself or don’t want to do yourself? You can hire someone else to do it for you and then pay them the activity-based incentive. This can be used in multiple situations from setting up your booth at a trade show or managing your contracts with another organisation.

3.    Deal Registration

Is the market momentum not in your favour currently? The deal registration incentive can come in handy in this case. This allows you to analyse the behaviour that makes up a good sales cycle. Deal registration works by rewarding your partner for identifying an opportunity early and they are then paid a set percentage for every deal that is closed or registered by this partner. The direct and indirect pipeline can be managed effectively when you have an early insight into the sales.

Channel incentives, as mentioned before, are not payment programs. They are there to drive partner behaviour. They are usually targeted at changing the behaviours of the yield, mix or reach. If done effectively, channel incentives can be really helpful in helping you grow your business in the right direction while also providing you with an opportunity to engage your partners well in your business.


 

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23 replies on “Channel Incentives – All You Need to Know

  1. Not sure if i understand this correctly – but wonder and scared to ask – what incentive – do you think would work on own small online store – http://www.honeybeeswax.com. We are small but do sell online thou mainly do business at markets but would love to sell little more online. Sales online also generate a 10% that give to Global Giving projects.

    I have tried discounts (rebates) but think need to be more imaginative. Could set up rewards but not sure i have the right things to sell this way? Prices for some products (Throws) are high but they are investment products based on quality and finish.

    Be interested thou terrifed of your thoughts

    Liked by 1 person

    1. Have you thought of going through the affiliate program route? You can get bloggers and influencers to market your brand and they get a certain percentage when someone buy a specially assigned link to that certain website so it’s easy to track. Currently, it is the most cost effective method for a lot of small start ups.

      Liked by 1 person

        1. My ecommerce software runs a reward programme – if people buy things – they get points, build up to buy things for free. But i think you mean something else? Are you thinking of any marketing affiliate programmes in particular – am i allowed to ask this?

          Liked by 1 person

          1. Im sorry – understand what you mean now – i have done this – through paid magazines advertising but it didnt really work for me – expensive. and has such a finite time frame. Its difficult to compete as a small business

            If you are interested, this business – https://www.mr-masey.co.uk/ has gone from a small start up to being on the high street – probably good product at the right time and interesting personality

            Liked by 1 person

  2. This is EXCELLENT! Thank you.

    With 40+ years in retail management and sales, I have “always” held to the philosophy that “Retail” is a “peoples business.” Aligned with this is understanding the most effective way to motivate people {employees] is to in some manner make them a “partner.” That is tie rewards to efforts and success.

    Very well done my friend,
    Continued Easter Blessings,

    Patrick

    Liked by 2 people

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