Incentive programs make your offerings more appealing to your channel partners, leading to more sales and on-time renewals. Providing an incentive program is one thing, but if your current program is convoluted, weak, or stale, it will ultimately affect your outcomes.
Designing a powerful, fresh channel incentive program is a great way to drive specific campaigns, upsell/cross-sell opportunities, and new products/services. These incentive programs will compel your channel partners to strive for on-time renewals while helping your team lower its discounting rate, get purchase orders (POs) out quicker, and save on operating costs.
Here are the best ways to develop a channel incentive program that engages your partners and ultimately improves your sales and renewal results.
1. Keep Your Incentives Fresh
Understanding what incentives will perform well starts with knowing what services or products you want them to target.
Without guidance, partners will instinctively go for the easy renewal. That means they’ll create the same deals with partners and maintain discounts to keep things easy. Unless you go out of your way to teach partners about new cross-sell and upsell options, you can expect that your partners will maintain business as usual.
Incentives encourage partners to direct sales toward additional products or services. Designing incentives that align with your active campaigns can create more engaged partnerships and showcase new ways to serve your partners. Providing higher commissions for new products and services can lower discounting rates, improve delivery on POs, and expand your value to the client.
When implementing new incentives, make the program easy to understand and train your partners to achieve them. Providing a clear to success will help partners take full advantage of your program and see how your new offers better serve their existing customers
2. Revisit Your Incumbency Policy
Being the incumbent should come with substantial rewards, but you need a solid plan to see cost advantages from your incumbency policy. If you’re looking to boost on-time renewals, improving incentives for incumbent partners is an excellent place to start.
No channel partner wants to lose their base customers, so creating an incentive plan for incumbents can encourage them to understand their clients’ needs better, provide even better service, drive on-time renewals, and secure multi-year renewals.
Designing an incumbency policy that balances risk and reward can be tricky. Higher margins for on-time renewals aren’t enough. Leveraging the threat of partner takeover can drive your partners to action.
If a partner lets a renewal lapse beyond 30 days, open the door for another channel partner to take over the contract. Takeover partners are eager to get the new customer, so there can be a big push to win over incumbency opportunities.
Multi-year deals can be a great addition to incentive plans, too. Some vendors will offer a five-point margin increase for a timely three-year renewal deal, and that more substantial margin will pay for itself. Multi-year renewals are more manageable for your team and your partners, so offering higher margins can encourage incumbents to stay on top of deals.
3. Offer a Variety of Incentives for Different Partner Types
Depending on your products or services, partner needs can vary wildly. Customizing your incentives to match your partners can drive them to go above and beyond.
One incentive won’t fit all partners. Consider these incentives and ask your partners which rewards are most appealing to them:
- Referrals: Referral traffic can be a huge source of business with IT vendors. Make it worthwhile for your partners to share their experiences. Give the partner a percentage commission of all the sales they generate from referrals.
- Solution Development Funds: Help your partners sell your products better. Investing in a joint marketing program makes it easy and affordable for your partners to market your offerings.
- Sales Performance Incentive Funds (SPIFs): There’s no denying that cash is king. Cash rewards for product sales can go a long way for some subagents.
- Rebates: A higher deal margin makes selling your product or service more compelling, especially if your partner feels they have room to offer deals. Giving a percentage of each sale to the partner can encourage them to promote products you’re focusing on in new campaigns.
- Fees and Activity-based Incentives: Don’t let your customer relationships fall to the wayside. Even after they renew, customers still need attention, so rewarding partners for completing strategic goals, like managing relationships or driving revenue in small markets, can keep them incentivized.
4. Track Channel Incentives via a Dashboard
Staying on top of your incentive program doesn’t have to be daunting. Forget keeping track of a ton of emails and spreadsheets. We all know that’s how things fall through the cracks. Part of an attractive incentive program is easily keeping track of which partners earn what, and a dashboard makes it easy to do that.
Visualize and track goal progress while connecting incentive performance to active campaigns. For an anything-as-a-service (XaaS) or subscription model, this is an absolute must.
Create Partnerships That Work with an Incentive Program
Incentives are a powerful way to drive your business – but only if a program is well-managed. Consistently analyzing your program, identifying gaps where partners fall short, and updating underperforming policies and incentives are essential steps to create an incentive program that works.
ServiceSource has over 20 years of experience working with and managing channel partners for the global cloud, software and hardware, networking, and software-as-a-service (SaaS) companies. Please schedule an appointment now to see how we can help you improve your approach to channel partner management.