Here at Motivation Excellence, employee incentive and rewards programs are a big part of what we do. But they are not all we do. We engage with organizations to create a variety of incentive programs, including sales incentive programs and channel incentives.
We help organizations leverage channel incentives to increase market share. Incentive programs are a terrific way to motivate channel partners. Incentives can run the gamut from travel experiences to merchandise rebates and certain types of non-cash rewards. The key is to figure out what makes channel partners tick so that you can create an incentive program uniquely tailored to each one.
Channel Incentive Basics
The foundation of this entire discussion is an organization’s channel partners. Channel partners are distributors, retailers, resellers, etc. Virtually every entity involved in the sales chain is considered a channel partner. Some industries have longer chains than others. Nevertheless, unless an organization is selling directly to end customers with no operators in between, there are channel partners involved.
Increasing market share from a channel partner perspective is all about encouraging those partners to prioritize your organization’s products or services. You want your organization to be given priority over the competition. But channel partners need a reason to do so. That is where channel incentives come in.
A channel incentive provides the reason for selling a bit harder. The right incentive can encourage partners to increase their focus and efforts on what your company offers. It can motivate them to work on market penetration to establish residual sales.
Expanding to New Markets
Market penetration is a big issue among organizations looking to increase their share. Greater penetration leads to new markets, and new markets boost both share and revenues. How do channel incentives play into such market expansion?
Imagine using a channel incentive program to encourage partners to go after previously untapped markets. They only receive the benefit if they manage to penetrate those markets. An incentive gives them the reason to put in the time and effort.
There is an added bonus in this regard: expanding into previously untapped markets requires that channel partners have an appropriate level of expertise about your products and services. If partners want the incentive badly enough, they will make the effort to learn everything they can about your organization.
Ultimately, you should be left with channel partners that know your products and services inside and out. They can represent your organization as they work to expand your reach. Everybody wins as a result: your organization, your partners, and end customers.
Fostering Loyalty and Commitment
There is a downside to leveraging channel incentives as a way of increasing market share: potentially crafting a program that emphasizes numbers more than anything else. When the only goal of increased market share is a higher number, whether it is sales volume or total revenues, it doesn’t take long for the luster to wear off. Numbers are just that. They are numbers that channel partners can grow used to and ultimately ignore.
An ideal channel incentive goes beyond mere numbers to foster loyalty and commitment. A good program engages with partners as much as customers. It encourages partners to take an active interest in promoting your organization’s growth and prosperity. When your organization grows and prospers, so do your channel partners. You want them to own that.
Channel incentive programs can be powerful tools for increasing market share. If you would like to know more about how Motivation Excellence can be involved in designing and implementing incentives for your channel partners, reach out at your earliest convenience. Let us create an incentive program like no other.
