Incentivizing Channel Behavior

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, understanding that 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.

Take a look at the top 10 channel behaviors to reward and encourage in 2013:

1. Training. It is no secret that training is key to partner success. Implementing tiered reward paradigms to drive low-participation segments to become experts will reap the best results for your channel. Also, it is important to drive total reseller participation; reward the boss and individual team members, and put in an override bonus for an entire team completing the behavior. Not only will you ensure better-educated resellers, but you will create a social/team dynamic for your training program.

2. Demand generation. Reward the channel partners that are utilizing your branded assets and campaign-on-demand tools. (For your mid-tier, the capability may not be enough. Reward them for email campaigns, events, and other marketing tactics. They will see the business benefits after one campaign and be hooked.) The more your partners use these materials, the better your brand recognition will be in the market, and inevitably, the more you will sell. Develop reward tiers for use, frequency, and velocity. More leads for your partner means more business for you. (Organized management of leads resulting from these actions should also be monitored and rewarded.)

3. Accreditation. Rather than using a one-time accreditation system, develop a program with various levels of accreditation. This will give you the opportunity to incentivize value-added resellers (VARs) numerous times and with tiered rewards based on the level of accreditation they complete. This also incentivizes repeat interaction with your brand, and keeps you top of mind with your channel resellers.

4. Deal registration. Incentivize your resellers to register deals they are pursuing, which can provide you with a better forecasting pipeline. Additionally, it provides you with opportunities to reach out to individual VARs and offer assistance, education, or more information that could help close the deals.

5. Overall program engagement with games. It has become trendy for OEMs to produce games that can engage and educate reseller partners. (They can impart training or brand messaging.) Although this interaction seems fun and as though it should sell itself, you may need to incentivize your VARs to try the games for the first time. And rather than a "spin to win" format, build the game to offer incremental rewards for every play.

6. End-customer case studies. Incentivize your resellers to gather and share case studies showing how your products helped the end-user company. These case studies can be leveraged for all sorts of marketing from there: VAR education, sales materials, media fodder, etc.

7. Photo contests. Reward your VARs for showing off their rewards via photos within your partner platform or even social media. This personalized sharing is great for building community and demonstrating to underperforming VARs what they could be earning.

8. Not for resale. Reseller partners that have your products in hand have a much higher likelihood of selling your solutions. Encourage not for resale with easy access to demo units and a smart points mix to push units. Attach high-point values to underperforming units or new launches to drive faster market adoption.

9. Other team members. Don't forget the professionals other than the salespeople involved in your reseller network. Whether they are engineers or proposal writers, there is more than one champion in a VAR organization. It is important to understand who your influencers are and incentivize them accordingly.

10. Overachieving. Just for good measure (if you can achieve this optimization), reward the super participant who is taking part in a number of the aforementioned behaviors. For example, create a bump-up for VARs participating in four or five different categories.

The key to better partner performance is building a meaningful relationship among your brand, products, and partner. If you are making investments in your channel by providing business tools to enable sales, marketing, and better performance, it is important to ensure that you are tracking the effectiveness of your tools, incentivizing participation, and continuously optimizing your program. Additionally, your PRM provider should be able to provide you with a clear lens into channel performance, for example, tracking how exactly those 150 points you added for training completion affected the pipeline performance in six months.

A VAR that is regularly and effectively incentivized to interact with your brand and develop positive sales behaviors WILL sell more of your products. OEMs that take the time to identify the myriad behaviors that can be rewarded (besides sales alone) will foster a more engaged and successful reseller network.

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Mae Reeves is the chief financial officer at Parago, a leading PRM and channel solution provider.

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