Channel Sales Incentives: Avoid These 7 Common Pitfalls

Channel Sales Incentives: Avoid These 7 Common Pitfalls

As a company that uses a channel sales strategy, you depend heavily on distributors, dealers, agents, and resellers to help you meet your sales goals.

While this lack of control might be scary to some, your company has clearly decided that the benefits of a channel sales strategy outweigh the risks.

Luckily, there are ways to ensure your sales partners keep your company moving towards its goals rather than away from. With a channel sales incentive program, you can engage and motivate sales partners to get your offering in the hands of customers and thus, drive sales.

Pitfall #1 Sales Incentive Program Is Overly Complicated and/or Not Clearly Defined

As if channel marketing wasn’t confusing enough, many companies make the mistake of over-complicating the details of their sales incentive programs. If aspects of your program are confusing or left open to interpretation, your sales incentive can end up being more trouble than it’s worth. Not to mention, if your sales incentive appears too complex from the beginning, you’ll struggle to get partners to participate.

When planning a sales incentive program, it’s critical that goals, guidelines, terms, and conditions are clearly worded and well defined. Every participant should be well informed on the rules of the program and how rewards are to be earned.

Pitfall #2 Misalignment Between Corporate Goals and Incentive Program Goals

A channel sales incentive program should be used to establish new behaviors, curb old ones, or shift your partners into a new way of doing things. For this reason, it’s important that when you’re planning your sales incentive, you bear in mind your company’s overall goals and sales-specific goals. This will allow you to ensure your incentive program is working in favor of your goals–not against.

For example, if your sales team has a goal to push sales on a particular product that won’t sell. (Perhaps it’s a seasonal product or an older model). This is where a sales incentive like a SPIFF could come in handy.

Pitfall #3 Not Obtaining Buy-In From Senior Level Management

Without a top executive or senior-level sales manager backing your channel sales incentive program, it will likely fail before it even gets off the ground.

In order to be successful, ensure your channel incentive program has buy-in from an individual (or group of individuals) with the authority to make decisions, allocate resources, and make adjustments as business objectives evolve.

Pitfall #4 Poorly Established Lines Of Communication

A lack in communication between you and your sales channel partners is an issue in of itself. But when it comes to a sales incentive program, you can’t afford to fall short on communication.

From the launch of your program up until it wraps, communication is necessary to spread awareness, generate interest, and spark engagement. Even more, program engagement can be leveraged to then communicate marketing messages, strengthen your brand, increase product knowledge, educate, and more.

Tip: Look into every possible avenue and decide which will allow you to communicate with your partners most effectively during your sales incentive program.

Pitfall #5 Inaccurate Sales Incentive Program Targeting

A sales channel can include anywhere from a few to a dozen members. From wholesalers to retailers, vendors to distributors, and all the others in between. While using a multi-channel sales strategy has many advantages, you must be careful that your sales incentive program is targeted appropriately.

This can be broken down into two key takeaways:

• Be sure you’re offering sales incentive programs at the right point in your sales channel. Rather than offer it to every one of your channel partners, focus on those that represent the most value to your organization or are responsible for driving the specific behavior you’re looking to achieve.
• Be sure you’re offering the right incentive programs to your sales partners. Know who you want to incentivize and then structure your sales incentive program in a way that directly addresses their needs and will generate the best results.

Pitfall #6 Neglecting An Opportunity To Collect Data

Any type of incentive is an opportunity for your company to collect data from members of your sales channel and customers. Neglecting that opportunity is a huge loss for your company and a major pitfall in our eyes.

First, identify what type of data would be valuable for your company to have on your partners and their sales. Then, determine how to obtain it as this step is critical to the design of your program. If it’s possible, structure your program in a way that allows you to capture data on your end customers too!

Remember, the more data you gather from different sources in your sales process, the better you’ll be able to access the value of your incentive program.

Pitfall #7 Infrequent and Inconsistent Incentive Rewarding

When it comes to rewarding through your incentive program, keep these two things in mind: frequency and consistency.

Take a funding rewards program for example. When you don’t fund & issue these incentives consistently, your message and incentive are wasted on the recipients. You use the funding to encourage loyalty & product sales!

At Incentive Insights we understand that there are a number of factors that make avoiding these pitfalls seem impossible. That’s where we can help!

If an incentive is something you’d like to integrate into your channel sales strategy but you feel like your company would face a few of these challenges, we suggest you check out our sales incentive program solutions.

Because we offer customized and flexible solutions, we can find something that works well for you and your company’s needs.