5 Ways to Tariff-Proof Your Incentive Strategy
Tariffs are no longer just a headline; they are a daily reality reshaping the wholesale distribution landscape. Recent data underscores the urgency and impact this is having on this large sector.
- In a June 2025 survey of over 4,000 small business owners,72% of wholesalers reported lower revenues due to tariffs.
- The wholesale trade sector is absorbing an estimated $48.7 billion in import duties, representing more than half of the U.S. economy’s total tariff exposure.
- Margins are under intense pressure, with 44% of small business owners seeing direct revenue losses from tariffs and the average decline reaching 13%.
This new data reinforces earlier research from the National Association of Wholesaler Distributors, which found that 62% of distributors expect their cost of goods sold to rise by at least 10% in 2025 and only 2.5% report any positive effect from tariffs.
Traditional incentive models can prove unsustainable in this environment. To maintain profitability in this constrained market, a better approach is needed to tariff-proof your incentive strategy. At Motivation Excellence, many of our clients are in the B2B distribution channel. Here’s some thought leadership we can offer others out there looking at their incentive strategies:
1. Focus on Emotional Loyalty
Buying decisions often start with emotion and get justified with logic. In wholesale distribution, most products are bought rather than actively sold. The real opportunity lies in building deeper relationships and creating more meaningful experiences. When products feel interchangeable, the experience becomes the differentiator. Group incentive travel is a proven tactic. According to the Incentive Research Foundation, 73% of participants reported that they increased loyalty to the sponsoring company after attending and 91% of respondents find group travel “very” or “extremely” motivating. Further,72% say relationship building is the most important benefit.
2. Make Use of Behavior-Based Incentives
Moving beyond volume-based rewards and focusing on long-term, value-driving behaviors is essential. Some examples include:
- completion of product training
- adoption of digital tools
- participation in joint marketing campaigns
A manufacturer might offer tiered rewards for partners who complete training modules and submit a case study or testimonials, thereby increasing their product knowledge. This approach encourages channel partners to invest in their own growth and education. Often, the root of the problem is different than the symptoms. Behavior-based incentives close this knowledge gap, empowering channel partners to sell with confidence and deliver greater value to customers.
3. Help Customers Grow Their Business with Cross-Selling and Upselling
Instead of simply trying to add incentives for pushing more products, help your customers sell more by incentivizing cross-selling and upselling solutions that fit their needs. For example, in plumbing distribution, rather than just promoting another type of pipe, create incentives for contractors who sell water heaters with compatible smart thermostats or leak detection systems. This not only increases average order value but also positions the distributor as a partner in business growth, not just a supplier. The best distributors provide training, sales tools, and support to help customers identify new revenue opportunities and close more sales.
4. Close the Feedback Loop
Use your incentive program to gather input through surveys or other feedback tools. This gives you insight into what they need and where the market is heading. Electrical Trends, the electrical distribution industry’s blog, had a recent article on Competing, and Winning, in a Tariff Induced World which states, “Doing business the way you did it will not drive profitable growth.” Now is the time to do research on growth segments, understand what customers’ needs are, and determine what they need from you. Feedback through surveys ensures your strategy, culture, and logistics keep pace. Offering an incentive to take these surveys or making them a part of your current incentive program, is essential for understanding why customers buy from you and what they value most.
5. Train Your Sales Team to Sell on Value
Sales teams need to show how your products or services save time or money. In the channel, price is often passed through to the end customer, so the focus should be on the solution and how you differentiate. With most projects running over budget now, end users are under pressure to justify every dollar and the value you provide. Your sales team needs to be solution-focused but should also know how to use the incentive program as a tool in that conversation. They should understand the rules and apply the program as part of their strategy to close deals. When they do, they move the conversation from price to value.
Mid-year is often the hardest time to change programs and pricing —or even rebate structures — for many distributors. But it’s a great time to start looking ahead. Since margin pressure will not be easing anytime soon, the real questions are:
- How will you adapt for 2026?
- Are you getting the right guidance to evolve your strategy?
Companies that start shifting their strategy now will be in a stronger position to grow in a more competitive and constrained market come January 1st.
If you’re starting to think about what comes next for you and your distribution channel and incentive strategy, we would be happy to consult with you, free of charge.
Why Group Travel Is a More Effective Sales Incentive Than Cash for Your Top Performers
Here at Motivation Excellence, we are big fans of group travel incentives. We’ve seen first-hand over the last 40 years just how effective they can be to engage, inspire, and motivate. In every case, it’s far better at building connections than a bank deposit.
There is always going to be a place for using cash bonuses as part of an overall employment package. They’re practically expected, so as a sales incentive, they can easily fall short motivating your internal sales team.
Group travel incentives, however, are motivational to internal and external sales teams, alike. Traveling, especially with a significant other, fellow top performers and company executives, creates lasting relationships that become worth much more to the future success of your business than writing a check.
Here are three reasons we believe group travel is a dominant motivator for sales incentives:
1. Fond Memories Become Future Goals
Travel experiences generate memories people hold on to. While receiving a bump to a paycheck, gives an instant, and surely appreciated lift, it’s often forgotten by the time the next month rolls around. Unfortunately, extra money ends up being used for gas, groceries or bills more often than being used for something more meaningful or extravagant.
On the other hand, memories of a great travel experience become the motivation to earn the next experience. The “have to do that again” factor can’t be underestimated with group travel incentives. Our travel incentives are filled with once-in-a-lifetime experiences individual travelers wouldn’t be able to replicate. That holds incredible motivational value!
2. Loyalty Is Built Through Emotional Connections
Traveling with a group of other top performing individuals is a bonding experience. Sharing incredible activities, meals and training events creates camaraderie that can grow into friendships. Those strengthened relationships translate into increased loyalty and talent retention.
Hosting a group travel incentive is a way to stand out among competitors looking to woo top talent away. Selecting an amazing destination with incredible events combine to create a memorable travel experience that can help a company differentiate even more. One of the best benefits is the intrinsic motivation to achieve the travel reward year after year…adding longevity to loyalty far into the future.
3. Travel Is Happily Publicized
The modern culture values travel so much that there is prestige attached to it. Social media posts are loaded with people’s latest adventures. Now imagine the added pride when someone earns the travel experience through their own efforts. They shout it out for all to know (and follow along)!
Offering a group travel incentive allows the hosting company to cover the expense through an increase in gross profits. Meanwhile, the person who earned the experience put in a lot of sweat equity, but isn’t shelling a dime out of pocket to enjoy the reward. It feels free to them, but also deeply appreciated since the road to get there wasn’t easy.
The added publicity each participant freely gives to the host company on social channels is invaluable. It attracts the attention of colleagues who then want to earn the travel incentive too. The prestige of being a member of “the club” grows, along with the motivation to achieve it. In the end, group travel is a more effective sales incentive than cash in many ways. Whether you’re interested in pushing your internal sales team to new heights, strengthening crucial relationships or differentiating your company’s rewards from your competitors, incentive group travel offers incredible ROI and ongoing motivation. Connect with us to learn more about how it can help your company thrive.
Channel Incentives: Boosting Partner Performance and Engagement
Has your organization been looking for ways to boost partner performance and engagement? Are you tired of the same, old promotional gimmicks? If so, it’s time to try something new. Consider investing in B2B channel incentives.
Channel incentives are customized reward programs designed to do more than just show token appreciation for the job your partners do day in and day out. They are designed to go above and beyond in a way that truly motivates performance and engagement.
Designing and implementing channel incentives is what we do here at Motivation Excellence. We work with you to learn about your business needs and derive the best goals to meet them. It’s a consultative approach that we back up with the detailed dedication needed to run an engaging, successful and totally custom-created program.
Channel Incentive Elements
Channel incentives come in all shapes and sizes, so to speak. We appreciate variety because it gives us an opportunity to customize every incentive program down to the finest detail. The elements are flexible and include:
- Goals – being specific here is important to the design of the program
- Budget – will this come from incremental sales, vendor buy-in, a budgeted line-item, or a combination
- Rules – these lay the groundwork for success and expectations
- Performance management and tracking – data analytics are important to track for management and participants
- Rewards – travel, lifestyle upgrade packages or award points, to name a few
- Marketing – engaging participants is a special skill set and critical to the overall success of the program
We work with our clients to make sure their goals are met within their budget while meaningfully motivating the people who mean the most to the success of their business. A great channel incentive maximizes results and minimizes risks.
Channel Incentive Benefits
There are a lot of reasons to run an incentive with your distribution channel. One of the biggest is differentiation. If you’re in a market that’s saturated with competitors, running an incentive can be the way to gain attention and new customers. Channel incentives with motivating rewards can increase B2B customer loyalty, which can begin a lasting relationship well into the future.
Cost effectiveness is another benefit of running a well-designed channel incentive program. When we design a program, we like to see the program pay for itself, and then some, through incremental sales. Programs that run year after year can continue to bring in incremental gains as participants work to outperform their activity from the previous period.
Channel incentives can be very flexible too. They can run for a short period of time, like a quarter, or longer stretches. They can coincide with a new product launch. Incentive programs can include rewards for completing training, making your B2B customer an expert (and advocate) on your product versus the competition. The flexibility options are nearly endless!
Channel Incentive Management
This part is really important. A channel incentive that is launched and not managed after that will die a quick and quiet death. Management includes participant engagement. It includes regular metric checks. It might mean the program gets tweaked from time to time to maximize results or avoid costly hiccups. Working with a skilled partner, like our experts at Motivation Excellence, is the best way to ensure success and minimize risk. We recently published a blog reviewing how we handle performance management and tracking within our B2B loyalty and incentive programs. It includes a detailed Q&A with our Client Performance Manager, so if you have questions about what it entails please check it out. In the meantime, here’s a quick list of some of the ways we work with our clients to manage their loyalty or incentive programs:
- Regular client review sessions set up at intervals that make sense for the program and client
- Marketing support like emails, postcards, texts and gift mailings
- Data-driven performance websites that give management and participants one place to get instant program updates
- In-house customer service for participants redeeming award points or registering for a group travel reward
Channel incentives are a must in today’s highly competitive market. They are critical to boosting performance and increasing engagement. For more information about how we develop and deploy channel incentives, give us a call or shoot us an email today. We’d love to give you a free consultation anytime!
Our Guide to Group Travel Incentives for Sales Teams and Channel Partners
Group travel incentives are a major part of our business here at Motivation Excellence. We are firm believers in group travel incentives for sales teams and channel partners because we’ve seen decades of positive results. With that in mind, we have put together a small guide offering a rundown of everything you should know on this topic. Reach out to us for more information about arranging group travel incentives for your organization.
Why Group Travel Incentives Work
Group travel is a fantastic incentive on many levels. For example, incentive travel motivates sales team members and channel partners to achieve their sales targets by way of a tangible and exciting reward. Travel is something people look forward to, especially when it’s something they couldn’t necessarily plan on their own. And, even though it’s being paid for through increased sales by the earners, to them it feels like it’s on the house!
Group travel incentives also work for sales teams and channel partners because they:
- Enhance engagement and loyalty
- Strengthen relationships with the people who mean the most to your bottom line
- Provide a competitive environment that boosts sales
- Provide a means of attracting new talent for internal teams, and new customers for external channel partners
- Offer the opportunity to combine both work and rest in a beautiful setting
- Create lasting memories that emotionally tie the travelers to your company
Best of all, group travel incentives offer a significant return on investment (ROI). Travel events ultimately pay for themselves by generating sales, differentiation in the market, and loyalty.
How to Plan a Successful Group Travel Incentive Program
Planning is critical to pulling off any group travel incentive. The planning stage has a myriad of critical steps, including these:
- Define Your Objectives – This means figuring out the purpose for the incentive and what you hope to accomplish for your target participants.
- Establish a Budget – Exactly what the experience looks like will depend heavily on your budget and how you plan to generate it.
- Choose a Destination – The destination should motivate your participants, match your budget and tie into the theme of your incentive program.
- Tailor the Itinerary – The itinerary can be a mix of team-building exercises, activity options, leisure time, and networking with company executives and fellow high achievers.
- Personalize the Event – As you zero in on the end of the planning process, be sure to find ways to personalize the event.
- Communicate – Engaging with your target audience before, during and after the travel incentive is important to tying the experience all together for your winners.
The level of planning directly correlates with the effectiveness of the experience. Our travel team at Motivation Excellence has 40 years of experience creating and executing award-winning incentive travel programs. When you work with us, we can offer our expertise on the rule structure to qualify, the destinations that will work the best for your budget the best way to motivate performance improvement.
Why Working with Experts Is Worth It
Running an Incentive travel program is definitely not DIY. Enlisting the help of an expert is worthwhile for several reasons:
- Our industry relationships, decades of experience and contract negotiation skills will keep your budget in check, while delivering incredible service and attention to detail.
- We can handle everything from planning to executing, including all logistics, performance management and marketing.
- We have access to exclusive experiences that would otherwise be unavailable for your event.
- We customize group travel incentives to maximize their business impact, thereby maximizing ROI, while minimizing risks.
- And most importantly, we make sure it operates to exceed you and your participants’ expectations
Any organization can arrange for employees or partners to travel. But maximizing travel incentives requires a lot more than going online and booking a few hotel rooms. If you are interested in how group travel can benefit your organization, Motivation Excellence is standing by to help.
Elevating Performance Through Incentive Travel: Uniting Sales Teams and Channel Partners
Unlike traditional bonuses or SPIFFs, incentive travel taps into deeper psychological drivers: the desire for recognition, the thrill of exclusive experiences, and the opportunity to connect with peers in inspiring settings. Research shows that:
86% of sales professionals rank travel rewards as more motivating than cash incentives (2022 IRF Destination Preferences Study)
Channel partners who attend incentive travel programs demonstrate 32% higher year-over-year retention (IRF Partner Study 2024)
The reason is simple: Incentive travel transforms transactional relationships into shared journeys of success.
Sales Incentives Are Important to Channel Partner Loyalty – Here’s Why
Key Summary
Channel partners boost sales—They act as an extension of your team (dealers, distributors, reps) and need incentives to stay loyal.
Incentives drive performance—Travel rewards, competitive perks, and training motivate partners to sell more and stick with your brand.
Long-term success requires alignment—Shared goals and strategic rewards (like exclusive benefits) strengthen partnerships and growth.
We love channel partners here at Motivation Excellence. We understand they are integral to the success of many of our clients. So, if we can motivate them with sales incentives, we know our clients will be happy. The big question for you is this: why are sales incentives so important to your channel partners?
What You Can Gain from Group Travel Incentives
At Motivation Excellence, we LOVE group travel incentives! For sales incentives, whether for your internal team or channel partners, a group travel award is coveted, and thus very motivational. For the right audience, travel experiences as rewards are phenomenal ways to engage, connect and foster performance improvements from the people who mean the most to the success of your business!
Group travel is a complex beast. But, with us as your partner, your team and participants only see the shiny, fun exterior because we put in all the sweat equity behind the scenes. As with any sales incentive, it needs to be managed in just the right way so that participants are engaged and rewarded, and our clients are secure in their budget and goal attainment.
A Plethora of Goals
Group travel incentives can be defined by one or more goals. So, it’s important for businesses to really understand what they want to accomplish before designing an incentive program that culminates in a group travel award. Below are examples of five goals we routinely design travel incentive programs around:
1. Improving Performance
According to the Incentive Research Foundation, an estimated 91% of travel incentive participants find travel incentives ‘extremely’ or ‘very’ motivating. Those are some impressive numbers! With a fantastic travel program as motivation, improving performance to earn it gets some added priority. Of course, offering the right destination for the audience is a critical component. Budget also comes into play, but we have 40 years of experience helping clients fit great destinations into their budget.
2. Relationship Building
Group travel experiences are great at building relationships between the executive team and the people working so hard to improve the bottom line. Planning small group activities or dinners so leadership can interact with top performers in a relaxed setting is one way we nurture relationship building. When you see a whale breach 100 feet away together, the shared experience builds memories which create fondness and leads to loyalty. Significant others become more than acquaintances which can lead to friendships outside the business world.
3. Building Brand Loyalty
Travel awards tend to be powerful and positive experiences. For B2B channels, they’re also a great venue to add value to a business relationship through networking and training sessions. Including preferred vendors, adding small group session options and organization product demonstrations will highlight how your business is able to put all the pieces in place for easy one-stop-shopping and support.
4. Sharing Organizational Insights
Yet another opportunity group travel offers is the ability to spend time sharing organizational insights with sales teams and distribution partners. Announcing a new product, giving insight into company goals and strategies or offering best practices for continued growth or steps to the sale are all ways to connect with your internal sales team or B2B channel partners. Combine all that with being in a great location with plenty of fun activities too and you’ve captured attention and fostered engagement.
5. Building Momentum
Showing appreciation to the people who bring the most to your bottom line not only strengthens relationships and increases loyalty but if done well, it motivates them to continue to qualify year after year! And each subsequent year likely brings with it a larger goal, which means your company continues to see performance improvements long after the group travel experience is over.
Take Advantage of the Latest Trends
We advise any company considering group travel incentives to partner with a trusted incentive travel firm. It’s a niche business, but knowing you’re with a company, like Motivation Excellence, can take a lot of stress off your shoulders. We do the heavy lifting. Our years of experience add up to risk mitigation for our clients, creative ways to get the most out of a budget and global partnerships that reap rewards wherever we go!
We also know what’s hot in group travel right now and how to best motivate your target audience.
- Personalization – When participants get choices on a travel experience, they’re able to make it more personal to them and their guests. Our Inspire travel technology creates personalized itineraries, including transportation, selected activities and a daily agenda. There are other ways to make a group experience more personalized, and we use them all.
- Free Time – One of the biggest trends of the last several years is offering more free time to the daily schedule. Not only does this save some budget for our clients, but it allows their participants the opportunity to truly relax without having every minute planned. “Bleisure” (business + leisure) days offer a more balanced experience for everyone.
- Cultural Experiences – Incentive travelers like to feel immersed in their travel experience. Getting off the tourist path, and finding unique places, usually only the locals know about, offer a glimpse into the significance of cultural traditions and activities which tend to be very impactful.
- Exclusivity – We like to plan travel experiences no one could plan on their own. Travel awards should be built with a wow-factor (or multiple) to really drive home to the winners that they’ve accomplished something extraordinary and are being treated as such.
If your organization wants to plan a group travel incentive we’d love to connect with you to offer our insight into successful programs. Motivation Excellence has 40 years of experience designing, planning, and implementing group travel incentives for channel partners and sales teams. Let’s get started on yours today!
How Channel Partner Incentives Help Your Business Thrive
Channel partner engagement is a priority among companies that rely on partners to distribute, market and sell their products. B2B loyalty and incentive programs are a great way to capture your channel’s attention and business. If channel partners feel more connected to your business, or more motivated by an incentive you’re offering that your competitors are not, you’ll see the net result in increased sales, often over a long-term run.
The Channel Partner Relationship
Channel partners can be amazing assets! Tending to this special relationship is critical to outshining your competitors in the same field. Distributors often carry competing product lines. Turning the attention to your brand can be tricky, but in the long run it’s very beneficial.
For our clients with distribution channels to consider, we’ve seen great growth when they’ve introduced a B2B loyalty or incentive program. Programs can reward partners for going through product or steps-to-the-sale training, in addition to increasing their purchasing and selling habits. When our clients help their channel partners grow their own businesses, a solid and loyal relationship starts to take hold, which pays dividends well into the future for both of them.
Tangible Channel Partner Contributions Worth Incentivizing
Loyalty and incentive programs are all about motivating behavior changes that positively affect your business. Your participants are rewarded for meeting new goals, which brings ongoing incremental sales increases to your business. How and why you motivate your distribution channel is critical to a successful relationship. Here are some reasons why you should consider implementing an incentive or loyalty program this year:
1. Market Expansion
Strategic partners offer market expansion into new geographic regions and customer segments. They can provide access to industry verticals without requiring a huge upfront investment. The goal here is growth. A channel partner’s established networks reduce barriers to market entry, thereby facilitating more growth in a shorter amount of time. Engaging with these new networks through a B2B reward program can help you find a foothold in a new territory.
2. Increased Sales
The basis of any loyalty or incentive rule structure is capturing increased sales. The equation is often very simple: Partner meets stated goal and they get stated reward. Loyalty programs reward from dollar one and often include tiers that correlate with amount of activity. Participants can level up or down depending on their ongoing purchasing habits. Incentive programs often have goals that stretch the normal behavior of a customer’s yearly purchases and rewards them for meeting or beating the stated goal after a predetermined stretch of time. Both programs’ rules need to factor in what will motivate the participant, while bringing in increased sales and gross profit.
3. Brand Awareness & Loyalty
When you’re one brand among dozens vying for the attention of distribution partners, offering an incentive program can be what shines a light directly on your company. Perhaps one of your competitors is running a group travel incentive to the Bahamas. Sure, it’s a great destination, but in your industry it’s a pretty common one. Offering a fresh new destination can turn heads to your program pretty easily. Adding in customer exclusive events or training throughout the year can also create engagement opportunities that become reasons channel partners choose to buy more of your products. Keeping your brand top of mind is a great way to increase sales and loyalty.
4. Product Launch
An incentive or loyalty program is a great way to introduce the latest and greatest! A product launch could add a bonus element to an existing program, or it could be the reason to start a program in the first place. Ramping up excitement is critical to a successful introduction. A short-term incentive can produce sales on day one. A long-term incentive can ramp up the rewards for increased sales quarter over quarter or year over year. New product training events and access to company executives are engaging elements that can help bring in sales immediately and set up a landscape for a beneficial partnership long into the future.
5. Product Focus
Some of your product lines might be more profitable for you than others. A B2B incentive or loyalty program is a great way to steer share of wallet toward the categories that have the best margins for your company. You can still reward on any sale, but by rewarding more heavily on certain skus, you can create more demand for the products that bring in the highest gross profits.
Plenty of Reasons to Reward with Channel Partner Incentives
If your channel partners are vital to your company’s success, you definitely want to explore the use of channel partner incentives to grab and keep their attention. For them, it shows how much you value their partnership. For you, it creates incremental growth potential on a continuous basis.
We have a library of information on our blog page regarding B2B programs, including the best rule structure elements, how to keep your program flexible and measuring ROI within channel programs. We are here as your resource from pre-launch through re-launch every year. Our experts at Motivation Excellence can discuss the best options for your particular situation. We look at your goals, audience, budget, and current and potential sales data, among other things to create a solution custom-built to your business. We know how to Inspire Extraordinary Performance with the people who mean the most to the success of your business. Let’s connect to get started!
5 Reasons for Maintaining Flexible and Adaptable B2B Incentive Programs
Channel partner incentive programs are a big part of what we do at Motivation Excellence. We pride ourselves on helping clients develop dynamic incentives that maximize results, often because they remain flexible and adaptable. We don’t use SaaS products. Each program is custom designed for the needs of our clients. And we build in measurements throughout the program life so if any tweaks need to be made, we can do them in real time.
Here are five reasons for making sure your next B2B loyalty or incentive program is the opposite of rigid:
1. Business and Market Needs Change
If there is one thing we can count on in modern business, it is change. Business is subject to ongoing evolution and churn. North American businesses are tied to global trends now more than ever. Supply chain issues and international trade situations can pop up overnight. Therefore, everything from business goals to market conditions to customer preferences can change rather quickly. Flexibility in how a rule structure is written makes it possible to adapt incentive and loyalty programs to current conditions.
2. Partner Needs Are Diverse
Channel partners come in all shapes and sizes. Some might be looking for training on your product. Another might want you to provide general business growth strategies as an add-on value. One might be brand new to the market, while another has a long history. The amount of time, resources and product needed is different for each partner. Ensuring incentive programs are flexible and adaptable makes it easier to meet diverse needs while allowing your team to meet each participant where they are now and help them get to where they want to be. We often suggest offering different ways a partner can earn rewards. Highest percentage of growth over goal and greatest revenue growth over goal allow small and big players to earn rewards based on their performance, instead of the bigger fish always overshadowing the small ones.
3. Flexibility Encourages Innovation
In the 40 years we have been working with clients on incentive programs, we have discovered something interesting about flexibility: it encourages innovation. When program creators have the freedom to be flexible, they tend to think outside the box. This fosters new ideas and strategies. Combining risk mitigating features with imaginative elements can really make a program stand out among competitors. For instance, if your company selects a group travel reward destination that’s more intriguing than “the other guy’s” destination, you have a better chance of luring engagement your way.
4. Adaptability Improves Partner Retention
Rigid programs that fail to meet partner expectations lead to disengagement and attrition. When you can catch this trend early on, you’ve got time to fix it. Programs designed at Motivation Excellence build in regular metrics and communication elements so our clients can see in real time what’s working and what needs to be adapted to increase participation.
Participants want to feel like they’re being seen and heard. Adaptable incentive programs show partners that their engagement truly matters, which leads to building a strong base of loyal participants.
5. Both Make Use of Performance Insights
Designing a flexible program that has room for changes as needed allows our team to make sure our clients are getting the results they want (or better) while keeping their risk low. Using performance tracking metrics at regular intervals gives our clients business intelligence they can use to adjust how the program is being run. This allows them to give certain aspects a boost, add new categories to the incentive or pull back on elements that are not seeing activity at all. Flexible and adaptable channel partner incentives can be adjusted as insights indicate.How are you doing with your current B2B loyalty and incentive programs? If you are struggling to achieve stated goals or keep your participants motivated to keep out-performing themselves year after year, maybe it’s time to change things up a bit. Perhaps your program need a bit more flexibility and adaptability injected in. We can help. Contact us to learn more about Motivation Excellence and our approach to custom built B2B programs.
The 4-Step Process for Measuring Channel Incentive ROI
Your organization invests in channel incentives for a reason. Channel incentive programs are not merely vehicles for spending money. You want something in return for every dime you spend. And how do you ensure you’re getting what you want? By measuring return on investment (ROI).
ROI can be measured in any number of ways depending on how the principle is applied. When it comes to channel incentives, keeping things as simple as possible is the name of the game. Unnecessary complications only make it more difficult to get a clear picture of channel incentive effectiveness.
The 4-Step Process
Your organization may have its own way of measuring channel incentive ROI. But if not, here is a common 4-step process used by organizations in a variety of industries:
Step #1: Define Objectives and Metrics
The first step is to define objectives and metrics. They should be clear and well aligned with your organization’s business strategy. But be careful. Without a clear understanding of what you are trying to achieve, you can end up chasing objectives and metrics that don’t matter.
What do you hope to achieve with your incentive program? What KPIs will clearly demonstrate success or failure? Common examples above channel incentive goals include revenue, lead generation, cost per lead, and conversion rate. There is plenty more to consider.
Step #2: Calculate the Cost of Your Program
The two basic components of ROI are cost and benefit. Therefore, the second step is to calculate the total costs of your incentive program. Total costs include:
- Partner incentives
- Training and support
- Deployment and administration
- Infrastructure expenses
Calculating costs may not be an exact science, especially when multiple incentive programs overlap. For instance, you might have the same group of people administering multiple programs. The administrative costs related to the work they do may not be consistently spread across all programs. You may have to estimate.
Step #3: Calculate the Benefits
Next is calculating the financial value of program benefits. One of the benefits might be increased revenue from partner sales. It is easily measured. Other benefits could include cost savings, customer acquisition, or even a broader market reach.
Some of the perceived benefits may not easily be quantified with a monetary value. Nonetheless, understanding the true ROI of a channel incentive program requires numbers as accurate as you can come up with.
Step #4: Do the Math
The fourth and final step is simple math. The basic formula for calculating ROI begins with subtracting your total costs from your total benefits to arrive at a number that represents your return. Then you divide that number by your total costs and multiply it by 100. Here it is in a nice, neat formula: ROI ratio = (benefits – costs) / costs x 100%.
If your calculated ratio meets or exceeds your target, the channel incentive program has been a success. If not, any further action is largely dictated by how far off the ratio is. Missing the target by a little isn’t the end of the world. Missing it by a lot suggests it might be time to rethink how you approach channel incentives.
Are You Measuring ROI?
How you measure channel incentive ROI is less important than the fact that you do it. If your organization utilizes channel incentive programs and you are not measuring their ROI, it is time to change things up.
Measuring ROI tells you everything you need to know about whether your channel incentives are working. You need them to work, or your organization is essentially throwing money down the drain. That’s not a very good business objective.
