Sales Channel Incentives
When trying to scale sales efforts, many businesses discover that they need more reach than direct sales can provide.
When trying to scale sales efforts, many businesses discover that they need more reach than direct sales can provide. Even if they hire more dedicated sales reps, they may struggle to bring in enough new customers to justify the investment. To solve some of the challenges associated with direct sales, many companies eventually incorporate a channel sales strategy.
With channel sales, you rely on third parties to sell your product or service to customers. Depending on the product, you may work with distributors, retailers, affiliate partners, value-added resellers and other businesses with the ability to sell your product more efficiently than you can alone.
Working with channel sales partners gives you access to new markets, builds consumer trust and helps you sell more cost-effectively. At the same time, introducing third parties to your sales process can bring new challenges. Because your business partners have options when choosing what products to carry and push to consumers, you’ll need to convince them to choose your product over competing options. Channel incentive programs can help you do this.
Types of Channel Partner Incentive Programs
A channel incentive program rewards your channel sales partners for behavior that benefits your business. For example, you might offer a financial incentive for partners that buy your product in high volumes or put extra effort into advertising.
There are many types of channel incentive programs, but any program you choose should aim to influence your sales partner in one of three areas: mix, reach or yield. At Incentive Insights, we’ve seen businesses improve their channel sales using incentives such as:
With a sales channel rebate, you give your business partners a financial reward or discount when they buy your product. Manufacturers often use sales channel rebate programs to motivate partners to buy more of a certain product or stock a wider range of products.
Deal registration encourages partners to act on opportunities by giving them priority on leads they identify. You’ll end up paying the vendor a set percentage of the deals they close successfully.
If you sell a product that requires your channel partners to perform demonstrations, you might set up a solution development fund. Partners can use this money to fund the demos, which makes them more likely to sell your product and stick with your company long-term.
Similar to a solution development fund, an MDF supports your channel sales partners’ marketing efforts. With a dedicated marketing fund, partners are more likely to push your product over a competitor’s.
Spiffs boost sales of a product by directly rewarding your partners’ sales representatives for meeting sales goals. A generous Spiff shows salespeople you appreciate them, creating long-lasting brand loyalty.
Benefits of Using Sales Channel Incentives
Depending on the type of channel incentive program you implement, your business could see increased sales, greater reach and an impressive return on investment. Some other benefits of using sales channel incentives include:
- Competitive advantage: In today’s competitive marketplace, you need something that sets your products apart. Introducing a new incentive program could help you retain existing sales partners and convert new partners currently selling your competitor’s products.
- Increased consumer confidence: An incentive program could help get your products on a trusted retailer’s shelves. The confidence consumers have in your partner’s business can transfer to your brand.
- Valuable data: Channel incentives also serve as effective tools for data collection. Simply ask participants to answer a few questions before they claim their rewards. You can use what you learn about your sales channel partners to develop more successful products and marketing materials, adjust your sales strategy and more.
Channel Partner Incentive Management
Before you start using channel incentives to improve your sales strategy, consider what you’ll need for your program to succeed. Processing and fulfilling rebates internally takes time and resources your organization may not have. Instead of overwhelming your marketing and sales staff, consider outsourcing channel partner incentive management.
At Incentive Insights, we can process rebates and ensure your sales partners get their incentives in a timely manner. Unlike our competitors, we allow you to fully customize your campaign, so you’ll receive high-quality data that’s truly relevant to your business. Our team will listen closely to your goals and build a custom technology, software or portal solution that meets your unique requirements.
Contact Incentive Insights to Improve Your Channel Sales Strategy
Incentive Insights has been fulfilling rebates and collecting data for over 20 years. We know what makes a channel partner incentive program successful. Our team of data specialists provides custom reports written in language that’s easy to understand, so you can get the information you need to improve your channel sales strategy.