5 Common Traits of a Successful Sales Channel Incentive Program
Your company can leverage sales channel incentives to drive a partner’s behavior. By offering rewards such as rebates, affiliate deals and money for marketing, you can persuade your customers to act in your firm’s best interests.
Sales channel incentives are part and parcel of modern-day business. But, just like any type of business endeavor, they can be executed well or poorly. How do you know that your sales channel incentives are delivering the desired results? The first thing to do is understand exactly what they are and how they can benefit your business.
An Example of a Successful Sales Channel Incentive Program
Imagine you’re manufacturing candy and you want your wholesale customers to give your products priority in their stores. In most cases, simply delivering a fantastic product won’t be enough. After all, a supermarket stocks candy from a number of manufacturers.
To incentivize the most powerful supermarket, you offer free POS, as well as a small marketing budget and some free samples. You offer free stock for every sales target reached, and you provide individual workers in the supermarket with rewards for selling your candies.
As a result of these incentives, your products are displayed in prominent positions in all of your client’s locations. Not only that, store managers and their teams are playing an active role in growing sales.
Easy, right? Well, not always. A successful sales channel incentive program has some common traits. Here are five of the most important:
1. They’re Personalized
A great sales channel incentive program isn’t made to fit all sizes — it’s developed in partnership with the client or partner. You have to assess how the partner operates in order to tailor your incentives accordingly. It’s also important to adhere to the partner’s brand ethos, as well as the needs of their own customers. You can get a feel for all of these issues by providing your partners with surveys.
2. They’re Well-Communicated
Don’t get too caught up in the detail when offering sales channel incentives. If you’re forced to withhold incentives because of technicalities outlined in the small print, your efforts could prove counterproductive. When partners have a clear understanding of the rewards available, they’re better equipped to deliver what you’re asking.
If communicating your incentives is proving difficult, you probably need to rethink things. Create a simple incentive program, and communicate it fully to everyone involved.
3. They’re Realistic
If you’re setting targets that are constantly being missed by your partners, the chances are that your sales channel incentive program is just too challenging. And when this is the case, people become disheartened and disincentivized, costing your business both sales and goodwill. Set targets at achievable levels, but make sure they deliver value to your business.
4. They Measure Success With Partner Scorecard Metrics
Develop a system for measuring the success of each of your sales incentive programs. After all, each one is different, with its own set of challenges. Partner scorecards can tell you at a glance how all your programs are performing.
If you’re incentivizing order volume, for example, you need to measure issues such as margin, volume growth and the returns being delivered on your investment. These issues, and others like them, will tell you which programs are worth keeping — and which need to be replaced.
5. They Work Backwards
Think about what it is you want your sales channel incentive to achieve. This is where you should begin your program planning. Start with the objective, and work backward to create the measurable and achievable goals required to deliver it.
For example, imagine you want to incentivize a supermarket to buy more of your high-margin candy. Decide on a target that will make the incentive worthwhile to your bottom line. Think about what will drive sales of more expensive products, and give your partner the tools and incentives to deliver.
Don’t take chances with your sales channel incentives, as they could be crucial to the organic growth of your business. Speak with an experienced sales incentive expert.