3 Keys to a Successful Channel Incentive Program
For companies that go to market via indirect channels, motivating the sales reps that do not directly work for them can be a challenge. As such, many companies have a channel incentive program in place to try to increase lift. The effectiveness of these programs, however, varies based on the way they are executed. For your company to find success with its channel incentive programs, you need to examine three areas: the campaigns being run, the audience impacted by the campaigns, and the rewards offered for meeting sales targets.
Run different campaigns that are SPIFF-based, loyalty-based, and/or a mix of the two.
Sales incentives, in their most traditional form, are delivered via SPIFFs—an immediate payment to a sales person for the sale of a product or service. Typically, SPIFFs are used in short-term campaigns to drive the movement of products or services that are lagging behind set sales targets. SPIFF-based campaigns can be exceptionally effective in these cases. Tiered SPIFF campaigns can be even more effective; for example, if someone sells up to 5 widgets, he or she gets $10 per widget. If he or she sells 6 to 10 widgets, he or she gets $12 per widget, and so on. It can be highly enticing to a sales rep if he or she knows that his or her earnings can grow considerably by selling more and reaching the next threshold.
Your company can benefit from running loyalty-based campaigns at the same time as you’re running the SPIFFs. Loyalty campaigns tend to run for longer than SPIFF campaigns and are built to increase engagement with the channel incentive program as well as to increase mindshare and brand loyalty amongst the channel sales reps. Campaigns such as these look at the bigger picture—percent sales increase quarter-over-quarter, for example. A grand prize can be offered to the sales rep or store that has the highest growth overall.
You can also sweeten the deal by providing chance-based promotions as supplements to your primary campaigns. With lotteries and spin-to-wins that run throughout the year, you ensure that the channel sales reps have a regular chance to gain more awards—boosting participation in the program and ensuring regular check-ins to see what new campaigns are available to them.
TIP! Improve product or service knowledge in your channel by offering incentives for completing training in specific areas as part of your channel incentive program. Find out more.
Execute distinct campaigns targeted at specific geographies or demographic segments.
Often a given product or service will be more in demand in a certain region than in others. By segmenting your audience, you can ensure that you’re getting the best performance for the right expense. The campaigns should run concurrently and target audiences on a national, regional, store, or individual level.
For example, say you’re a manufacturing firm that develops home entertainment products and you’re releasing a new sound bar. You could provide SPIFFs for sales of the product in all stores across the country. At the same time, you realize that the southwest region is lagging behind others in sales of subwoofers. Run a loyalty campaign that offers significant payouts for a 30% growth in sales at the end of six months. Then, you see that the store that buys the largest quantity of your products has only a 25% participation rate amongst its sales reps; launch a lottery that gives sales reps a ticket for a grand prize that will be awarded via a drawing at the end of the month—knowing that their coworkers have the chance to win a brand new 4K television could prompt sales reps to participate in your program.
As an admin, you of course will have visibility into all of the campaigns being run and be able to judge their progress accordingly. But the campaigns themselves will only be visible to the sales reps who qualify for each one.
TIP! The right channel incentive program will have a robust analytics tool that allows you to identify the low-performing segments of your channel, determine which types of campaigns are more successful than others, and determine how much of what products or services are being sold and by whom. Find out more.
Offer different types of rewards to your audience.
Where rewards are concerned, a “one size fits all” approach may not be enough to motivate your channel sales reps. From cash to reloadable prepaid cards, company products, experiences, office perks and retail gift cards, having flexible reward options means there’s something for everyone in your indirect channel.
By offering a large variety of choices to the channel reps who have received rewards for their sales activity, you increase the likelihood of those reps continuing their engagement with the channel incentive program. Many companies offer a limited catalog of tangible items that are available. However, this does not take into consideration a sales rep’s brand affinities, as it’s unlikely that the catalog will offer, say, more than one or two different types of noise-cancelling headphones. Instead, by offering a veritable “mall” with hundreds of retailers, hotels, restaurants and service providers, as well as cash and merchandise redemption options, the channel reps are free to pick whatever suits them most the moment they go to redeem their awards.
TIP! If your channel incentive program is based on dollars rather than points, recipients of the rewards won’t ever be confused by unclear values and high markups. Find out more.
Read more about how WorkStride can partner with you to reach and engage every part of your indirect sales organization with engaging promotions, varied rewards, expert support and more.