Incenting Channel Behavior: 10 Behaviors To Reward And Encourage In 2014
By Daniel Hawtof, VP, Business Solutions, Global Channel and Employee Practice, Parago
Most channel incentive programs are designed to reward one thing: sales. At first blush, this makes sense. It’s a standard pay-for-performance model. However, in the increasingly competitive channel market, smart manufacturers are looking to influence behaviors earlier in the relationship continuum. They know doing so leads to better participation, higher engagement and, ultimately, more profitable partner relationships.
Today more than ever, it is critical to drive presales behaviors, because these behaviors have a high correlation to ultimate sales. Additionally, a more engaged partner is a more loyal partner. A more educated partner armed with marketing and sales tools has a higher chance of closing a sale. And, with today’s partner relationship management (PRM) solutions, companies are able to:
- Analyze the impact of rewarding presales behaviors;
- Segment and target their partner community for more relevant messaging and effective results; and
- Measure overall partner relationship benefits by creating actionable data sets and more profitable relationships.
Top 10 Channel Behaviors To Reward In 2014
- Business Planning. Based on our 2013 research, vendors are moving toward a model of “cooperative business planning.” Using this approach, you reward partners for their assistance with business planning tasks like defining measurable objectives and developing go-to-market plans. You also reward them for their efforts toward executing the plan. Your most highly rewarded channel partners end up being those who have truly engaged with your brand.
- Training. Training is key to partner success. By implementing tiered reward programs, vendors can drive low-participation segments to become experts. Training incentives that reward managers and entire teams also help boost total reseller participation.
- Certification. A program offering various levels of certification creates long-term, repeated interaction with your brand.
- Bundling. Incent partners to sell a bundle of associated products.
- Demand generation. Reward channel partners who utilize your branded assets and campaign-on-demand tools. Develop reward tiers for use, frequency and velocity.
- Deal registration. Incent your resellers to register deals they are pursuing. You’ll create a better forecasting pipeline, as well as opportunities to reach out to individual VARs.
- Recurring revenue sales. Vendors and the channel are rapidly moving to a recurring revenue model and away from legacy enterprise sales. To help motivate partners making this move, increase the incentives on the total value of the recurring revenue contract. As resellers become accustomed to selling your cloud services, you can reduce the incentive back to normal levels.
- Market Development Fund use. MDFs can be an effective incentive. A high percentage of these funds, however, go unused. Incent your partners to use the funds by providing an overlay incentive on top of normal incentives.
- Continual lead generation. Develop reseller metrics based on sales activity rather than on dollar value alone. Regardless of current sales volume, a partner who is constantly looking for new business is one you want to encourage. Increase their incentive tier based on their status as an actively engaged partner.
- Broad team member participation. Recognize the non-sales professionals in your reseller network. Remember, you need more than one champion in a VAR organization. Understand who your influencers are, and incent them accordingly.
A successful channel program isn’t just about sales. It’s about motivating your channel partners to go above and beyond, and recognizing those who have made your business goals their personal goals. With a clear lens into its performance and a strategy for fine-tuning along the way, you can use your program to incent a wide range of behaviors and achieve specific, measurable goals.
Dan Hawtof has been involved in almost every aspect of the channel for over 25 years. He’s been at large enterprises and small startups while wearing many hats, including sales, strategy, product marketing and management, and more. He is currently the parago VP of Business Solutions, Global Channel & Employee.