Channel Marketer Report

Special Features

Seven Ways Sales Incentives Are Changing

Dan Hawtof, VP of Strategy and Solutions at Hawk Incentives

By Dan Hawtof, VP of Strategy and Solutions at Hawk Incentives

Many companies use incentive programs to motivate independent channel partners such as dealers, distributors and resellers. In fact, the Incentive Federation extrapolated in its “Incentive Marketplace Estimate Research Study” that 41 percent of enterprise companies invest in channel incentives worth a total of more than $17 billion annually. But the practice of rewarding for sales is evolving rapidly, and what worked a decade or even five years ago may not work today.

Whether you already have a sales incentives program in place or are creating a new one, consider the ways sales incentives are changing as you look toward the future:

  1. Incentives are not just for closed sales. Companies want to drive sales with their incentive programs, but the industry is moving beyond the traditional SPIF model. A growing number of businesses are shifting their investment from focusing solely on post-sale rewards to including rewards for key behaviors that could eventually drive more sales, such as training, lead follow-up, reporting new opportunities and providing demos. Dispersing these incremental rewards encourages meaningful sales behaviors—especially in organizations with long sales cycles—and creates more engagement with sales people throughout the sales cycle.
  1. Rewards aren’t exclusively for sales personnel anymore. There are numerous people/roles within a channel partner’s sales ecosystem that can influence a sale or generate leads—including regional managers, salespeople, support personnel, marketers, etc. Effective sales performance can be a team event. Progressive companies recognize that and are identifying rewardable behaviors from a variety of participants that contribute to the sales cycle; then, they’re offering tailored rewards accordingly.
  1. Easy is “in.” Participating in sales incentive programs has traditionally been time-intensive and cumbersome. Recipients filled out sometimes lengthy claims forms, provided proof of sales, faxed it all in, then waited several weeks for their reward to arrive in the mail. This process often discouraged long term participation because the hassle of administration often outweighed the reward. Now claims can be submitted online—even via smartphone or mobile device—and proof of performance requirements can be minimized because they can be validated through third-party systems. Ease of participation is becoming especially important for channel incentive programs; if your program is easier to use than your competitors’, it can encourage partners to engage more often with your business.
  1. Anywhere, anytime access. Thanks to the proliferation of mobile devices, people now expect incentives to be seamlessly accessible across a variety of mediums. When available, this convenience allows participants to administer programs, access claim status, check balance information and redeem points where and when they want from the device of their choice.
  1. Limited reward options fall short. Redeeming points for a fixed assortment of travel and merchandise awards no longer has the appeal it once did. In fact, for our 2017 Reward Preference Report, research found that offering participants the flexibility of how, when and where to redeem an abundance of different rewards is essential. Facilitating this flexibility includes offering rewards such as physical gift cards, egifts, universal prepaid reward cards, checks, travel and merchandise to suit many different tastes.
  1. Millennials are changing the game. Millennial workstyles, lifestyles and even rewards preferences are quite unique compared to the generations that have preceded them. They typically live more digital lifestyles and want regular recognition for their accomplishments. Millennials are already changing how companies incent and reward sales teams and partners and will continue to push the envelope for new ways sales incentive programs can be modeled and run. 
  1. More companies are implementing hybrid approaches. Successful companies are incenting their channel partners with a one-two punch by offering incentives to the partner organization as a whole in addition to individuals within that organization. The organizational incentives are rewarded for attaining specified goals agreed upon in advance. The individual rewards are provided to promote the means to that end by incenting the various behaviors by key roles to help the organization achieve its goals.

Incentives don’t work unless they influence behavior; the tactics detailed above have the power to influence sales incentive programs positively and propel them into the future. Companies that try to reward all sales team members or partners the same way should aim to evolve their incentives programs to adapt to recipients’ demands and the emerging preferences for corporate rewards.