In my last blog I looked at the five reasons why channel sales incentives programmes fail to deliver results.
Having looked at the bad and the ugly, I want to focus on what good lucks like in this post and answer the question: what are the key elements of a great channel sales incentive programme?
Here are my eight golden rules:
1) Alignment – a channel incentive programme is an extension of your organisations sales and marketing strategy. It should reflect and drive the activity, interaction and behaviour that you are striving to achieve. A channel sales incentive will have different requirements to a channel loyalty programme; a channel referral programme should reflect any qualification criteria applicable; a behavioural programme should consider the implications of the changes being introduced.
2) Simplicity – whether you are designing a new programme or redesigning an old one, you should ask yourself at every stage: have I made this as simple as possible from the reseller’s perspective? If the answer is no, then your scheme will be fundamentally flawed from the outset.
3) Segmentation – Pareto’s Law applies! Segmenting distributors and resellers will create the scope to apply different incentive criteria and objectives, as aligned to your requirements of each commercial relationship. This also creates opportunity to reward accordingly.
4) Automation – one impact of our always-on consumer culture is that we import our expectations into the world of work. Approving claims and issuing rewards in a timely manner is imperative. Your channel partners will have high expectations around response times, communication and fulfilment so you should look to automate your scheme as far as possible so that data and information flows both ways quickly.
5) Communication and Accessibility – you need a marketing plan to make sure your scheme is front of mind and keeps your channel partners engaged for the course of the programme. The communications channels need to match the environment your audience are operating in ensuring they can access the programme quickly and easily. You’ll also need to anticipate the business peaks across the year when you’ll want a specific sales push.
6) Focus – it’s vital for a channel sales scheme to have momentum from the start. This means structuring the incentives and rewards to suit the pace of the market and the value of the goods and the nature of your resellers. Sales schemes for high value products work best with quarterly and annual goals. Volume-focused schemes need more regular reward on a daily or weekly basis through instant rewards. You can drive further focus by bringing an element of competition through league tables – regional or national – for best sales performance
7) Insight and ROI – Every channel incentive scheme should be designed so that you gather detailed customer information and insight so that you can improve your overall marketing effort. This shouldn’t come at the expense of simplicity but should be an integral part of how the scheme runs.
8) Feedback – you can’t run an effective channel incentive scheme without talking to your partners. This will help with initial scheme design and iterative improvements when it is up and running. What we are looking for here is how your scheme compares to the competition, what is stopping people from engaging with your scheme, and importantly, how you can evolve it once it’s live.
This last point is particularly important because, like any marketing activity, its effectiveness will decrease over time.
So while design and launch are important, the success of your channel sales incentive scheme will be defined by your ability to run it effectively and learn from what is working – and what is not.
I am the sales director at Edenred and I specialise in developing sales and channel incentives programmes for B2B and consumer brands. You can follow me on twitter at @ColinWHodgson
