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.
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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