Effectively growing sales revenues and market share is an ongoing challenge in today’s highly competitive marketplace. Moreover, encouraging channel partners and dealer reps to do their best by you takes strategy. Channel incentive programs are designed to help your business stand out among your competitors and can actually pay for themselves through incremental sales growth. Another great benefit of a well-run channel incentive program is the increased loyalty they foster, which can continue to reap rewards long into the future.
How do we measure the effectiveness of a channel focused incentive? There are a variety of metrics from hard sales numbers to program website log ins. It’s important to decide how you’ll know if a channel incentive is a success and keep track of those metrics regularly throughout the life of the program. Here are a few suggested metrics to consider:
1. Sales Performance
Although sales performance is not the only factor to consider, it is a good starting place. You can break down sales data rather minutely if that helps you make decisions on who and what to focus on. You can look at:
- Revenue by distributor, geography, and products/categories
- Overall and partner-specific sales growth
- Market share changes over a specified amount of time
Looking at sales performance metrics provides a broad overview of how your organization and its partners are doing on the revenue front. By looking at partner-specific sales growth, you can zero-in on the performance of individual channel partners. Between the two, you’ll glean important information about where you are now and where you want to be in short- and long-term periods.
2. Partner Engagement
Successful channel incentive programs engage partners. So, it is a smart idea to come up with some partner engagement metrics you can track. At the top of the list is participation rate. What percentage of your invited distribution partners enroll? Of those, who is consistently engaging with your company through increased purchases, and who could be coaxed to perform better with some TLC?
Other partner engagement metrics include:
- Interaction with sales team or customer service reps
- Incentive website log in frequency
- Email open rates with special focus on clickthrough percentages
- Amount of new sales tied to the focus of your incentive
If a channel incentive program is both attractive and meaningful to partners, they will reflect their interest with the amount of time and frequency they interact with the program.
3. New Opportunities and ROI
Effective channel incentive programs can open the door to more opportunities via stronger relationships and trust with your company. A well-designed channel incentive can more than pay for itself via incremental sales in the present, but the opportunity to be a long-term partner is where the continued ROI shines through. A metric here could be longevity of a client in addition to quantity of sales. We’ve seen long-running incentive programs foster participants who outperform industry trends even in flat and down markets.
Channel incentive programs can be invaluable in the drive to increase sales and grow an organization. But like all other business tools, program effectiveness must be continually measured so you can make adjustments in real time to capitalize on unexpected results, good or bad. Program design and rule structures are proven ways to get the best return and least risk for your program. We’re here to help you get started today!
