How Confident Are You In Your Channel Incentives Program?
Channel Incentives are supposed to create new business opportunities. They should be designed to increase loyalty and engagement with your partners, and in turn increase your channel sales. But many companies are finding that things just aren’t quite working out. Here we take a look at the common pain points that arise with Channel Incentives Programmes so that you can evaluate how well yours is performing.
Can You Prove ROI?
As with any business cost, the ROI on a channel programme must justify the cost. How you calculate this is at your discretion. You might also want to consider non-revenue ROI such as improved relationships with channel partners. Of course, if you’re not achieving the ROI that you set out to or are barely meeting targets, you’ll need to look at why this is happening.
Are you finding that operational and administrative costs are increasing? Could overspend be due to data collection and recording issues? Incorrectly allocated funds are a massive problem for many companies. Partners could be missing out and some companies have even reported having to cap financial rewards because of overspend in previous months that had gone unnoticed. If costs are escalating, you’ll want to know why. Is your agency mismanaging spend, or not keeping up with data accurately?
Are You Confident in the Data?
Accurate channel data is vital and the ability to record this data is the responsibility of the program manager or the agency you use to manage the programme. Managing a large-scale channel incentives programme in-house simply isn’t viable for many companies. So you must have trust in the company that runs your programme. Otherwise you will be going to your channel partners, stakeholders and superiors with data that you’re not completely confident in. This has a wider effect when attempting to see the impact of your programme.
Are You Lagging Behind?
A good channel programme will provide you with the ability to identify new sales opportunities quickly and in real-time. Added to this is being able to see inventory as near to real-time as possible. Naturally you’ll want to avoid supply and demand failures. Can your programme provide this function?
Are You Providing Immediate Rewards?
Any channel incentives programme worth its salt will be able to distribute rewards in real-time. Consumer studies have shown time and time again that in order for rewards to be recognised and appreciated, they need to be sent out as near to the rewarded behaviour as possible. Instant gratification will encourage repeat behaviours (sales in this case). Research from Mintel confirms this: 47% of consumers surveyed said their choice of loyalty programme would be influenced by instant redemption options, such as cash or discounts. Channel programmes work on the same psychological principles, we’re all human after all!
Do You Know What Your Competitors Are Up To?
Knowing what your rivals are offering is key to promoting loyalty amongst channel partners. This doesn’t necessarily mean providing more financial reward, but can include making the process simpler, offering a wider range of rewards, making location-based tailoring of rewards available and/or supplying better communication.
Are You Communicating With Partners Properly?
Are you getting measured feedback from your partners about the programme? Are you providing relevant and useful product or service information that makes it easier for partners to sell your product? If the answer to either of these questions is no, you already know that you could be doing better in terms of communication. Creating a two-way conversation with your partners will encourage constructive feedback which will help you improve the programme. Ideally, you should have open channels of communication right down to the individuals involved. A mutual understanding of your companies can only help the partnership.
Are Your Channel Partners Happy?
Any of the above pain points can severely impact working relationships. Any sign of discontent with partners could indicate something going wrong that you’ve not yet noticed. Often, however, partners won’t speak up (especially if those lines of communications aren’t up to scratch!) and will simply transfer their efforts and loyalty to a rival of yours. Ask for their input when designing the programme - after all, they are the ones who will be using it on a daily basis. Make it as easy as possible for them to sell your product or service. Constant measurement of partner satisfaction will show who or where you are failing before it becomes a real problem.
In industries where channel sales are becoming more and more important, where direct sales are decreasing in significance, it is vital to have a channel incentives programme that delivers good ROI and accurately shows data and sales opportunities. Strengthening your long term business partnerships improves relationships and performance levels.
A good flow of up to date, accurate data is essential for effective channel management. So if you are concerned about your channel incentives programme or are feeling the burden of managing yours in-house, get in touch with Ovation Incentives today. Get a firm control over your channel sales through a well devised programme from Ovation Incentives.