The Number One Reason Why Channel Incentives Fail

No one likes to talk about it, but you know it, and I know it. Channel Incentive Programs fail. A lot. Some peter out before they’ve had time to have any real impact, others land like a lead balloon right on takeoff.

As VP Sales, Jim had a well-developed plan for his incentive program. He had clear goals, the right audience, a good communication cadence, coveted rewards, incentive management technology, and he anticipated a solid ROI. He also got the C-Suite onside and the budget approved. The man even captured initial interest from his territory managers, channel partners and their reps. Woo-Hoo!

With so much thought behind it, why did Jim’s incentive program sink like the Titanic? All the efforts, all that money, now detritus scattered on the ocean floor when his initiative hit the iceberg of channel apathy.

As if the news weren’t bad enough, our would-be hero is now associated with a very public failure. It’s unfortunate for his company, and it certainly does nothing for Jim’s street creds.

When searching for answers on why a performance incentive fails, you’ll inevitably hear participants say “I didn’t know about the program”, or “I don’t have time for this”, or “none of my clients wants this product”, “the competition is cheaper”, and so forth. If some of these excuses were valid, you’d likely have no sales at all, and you’d be out of business already.

The truth is, the fundamental reason for program failure is that Jim couldn’t execute his plan well enough. He dumped the whole thing on a program administrator already stretched to the limit with emails, phone calls, meetings, management requests, reports, and on and on. Something had to give, and it turned out to be this new initiative with its steep learning curve and complicated maneuvers.

When developing his strategy, had Jim understood that day-to-day program management is the most critical factor to incentive success, he would have brought in his Admin at the very start to

  • explain the purpose and objective of the program
  • get the Admin’s input and – most important – a strong commitment to the plan
  • determine the tasks required and a cadence of accountability
  • identify responsibilities that could be passed along to make room for the new priority
  • make available all of the necessary tools, training, and support to succeed
  • determine milestones and well-defined measures of success.

Managing a channel incentive program doesn’t have to be ominous. You can outsource many of the administrative tasks to your incentive technology provider, although some things will best be handled internally – especially when it comes to partner relationships. Regardless, you’ll need excellent program management tools to keep things fast, smooth and accurate.

The good news is that your provider and your admin can work very well in tandem when goals, tasks, milestones and accountability are well understood. The incentive technology behind the program should make even complex promotions easy to execute.

Do the groundwork, include the resources necessary to manage highly successful channel incentives into your program costs, and you’ll be rewarded with increased revenues, the loyalty of your channel partners, and the ROI of your dreams. As a bonus, you’ll be seen as a confident leader with your finger on the pulse of the market, respectful of your company’s resources, and it will propel your career like jet fuel.

(Re-published from Johane Desjardins -one of our business partners at Vibe SMG )