The importance of channel incentives


The importance of channel incentives

The best partnerships are those that are a good fit for everyone involved, aligned with your goals and values, and ones that are collaborative and not forced. Which is why implementing a channel incentives programme that supports your partnerships, your brand and showcases the values of your products needs a lot of careful thought and consideration.

Why are channel incentives important for your partnerships?

Channel partners come in many shapes and sizes and depending on your market can have many types of channel incentives to offer. They can be affiliates, resellers, distributors, independent retailers, and even value-added providers.

This can be classed as anyone that sells your brand and doesn’t directly work for your business, although can be a partner. The best way to ensure that they are putting your brand above the competition is through channel partner programmes, who facilitate and handle your brand on your behalf.

Channel Partners are an extension of your sales team and are a third-party provider that works with your company to market and sell products in exchange for compensation. 


When working with a wide array of partnerships, it is important to understand and optimise your channel incentives to keep your partners engaged and inspire them to work harder for you.

Rather than focusing on rewarding B2C loyalty, a channel incentives programme motivates your partners (your resellers and distributors) to engage in certain behaviours, by offering valuable rewards that help them grow their own business and encourage B2B loyalty.

A channel partner incentives programme is a sales growth initiative driven by transactions, purchases, and invoices. The strategies involved are designed to change dealers’ and distributors’ behaviour to encourage lasting loyalty to your brand; promoting and installing your products as opposed to competitor products. Here’s the key takeaway: when channel partners are given a direct reward for selling your product, data shows they will naturally sell more and improve your ROI.

Implementing omni-channel incentives can create a seamless process for your partners, making it easy for them to participate, and keeping you in control of the incentives and rewards.

The benefits of having strong channel partnerships can mean:

  • Increased sales and market share growth
  • Increased brand awareness and customer loyalty
  • Developing strong brand sponsorship and ambassadors
  • Incentivising your partners’ employees and sales personnel
  • Increased product and brand knowledge


A channel incentives programme is an excellent way to reward your channel partners for profitable and fruitful results. If you are investing in several channel partnerships, your partners are key to the growth of your business. Which is why it is essential that they understand and believe in your brand and product offerings.

These bespoke programmes can ensure that they are fully engaged with your product offering and fully motivated to sell on your behalf. The most successful incentive platforms are simple yet engaging, designed to increase your partners’ knowledge – improving performance and loyalty.

What should a channel incentives programme look like?

When aiming to get buy-in and channel engagement, the first thing to think about is making sure your incentives programme doesn’t just align with your goals, but your channel’s goals too.

When introducing a channel partner incentives programme, it is important to take the time to analyse the goals of both parties. Some things you may need to consider:

  • Identify which partners within your channel have the most influence on the purchasing decisions of end users
     
  • Assign your budgets and assess how much you need to invest on these channel partners to meaningfully change their behaviour and their focus on to your product or service
     
  • Determine what product knowledge, training or enablement your channel partners will need to accomplish the goals and targets you have assigned them
     
  • Select rewards based on your goals for your programmes and the interests of your audience; using unique and creative incentives can be a great driver in boosting brand-building behaviour
     
  • Identify your KPIs (Key Performance Indicators) to analyse the success of your programme
     
  • Keep your programme fresh by working with providers who can offer a wide range of services

High-performing channel partners might have already reached their ceiling in regard to sales volume or profitability. Which is why these are exactly the partners you need to continue partnering with. These channel partners are likely the highest-performing, competent, driven and in high demand.

Types of channel incentives are sometimes less about growth and more about retention and solidifying loyalty with top partners to keep them away from the competition.
 

“Channel incentives are used to improve indirect sales performance, orchestrate partners’ behaviour, and engender channel loyalty” – Jay McBain, Principal Analyst, Forrester


When implementing channel incentives, it is important to be creative with rewards but also have consistency. Brands can sometimes overwhelm channel partners with too many ad hoc incentive programmes. Channel incentives are usually performance-based and aim to improve the revenue, reach, or mix of a group of partners.

Newer partners look more like influencers, advocates and alliances, which in order to accommodate need a fundamental and dynamic change in how incentives work. Without a ‘set-discount’ or ‘percentage of revenue’ type target, brands are looking at how to achieve similar behaviour modification of partners using capital spending. Without the benefit of the financial transaction, channel incentives need to evolve to ensure proper attribution and need to be able to measure influence around the end buyer at each stage. With the buying journey changing at the exact same time, this will be tricky, and advanced tools and technology will be needed to match the customer journey with the partner journey in real time.

Making the most of channel incentives

Channel incentives can keep your partners motivated in selling your products and services and help your company stand out from the competition. By making your sellers your brand ambassadors, you encourage brand and customer loyalty, which is great for sales pushes, seasonal campaigns, and new product releases. Overall, partner programmes grow your sales and market share, giving your company a valuable leg up.

Therefore, introducing different types of channel incentives can get the most out of your new strategy. There also needs to be a quick and seamless way to ensure a direct connection between a transaction made and an incentive rewarded to the participant.

A flexible incentives platform can help you adapt rewards to different partner roles and desired behaviours and change your incentives as business needs evolve.

Consistency is also key within a channel partnership. If your sales and incentives strategy is constantly changing, channel partners will quickly become tired of rethinking how to market your products. Trust in your sales channels - if revenue is building slowly, it often takes time for your reseller's efforts to be reflected in the numbers and encouraging incentives can help motivate and inspire them to put your product first.

Maximising the power of channel incentives

A channel incentive programme is an investment, but one that has many potential benefits for manufacturers, distributors, and wholesalers. But we don’t expect everyone to be an incentives expert. That’s why we offer Voucher Store – featuring a wide range of discounted gift cards from top brands that you can provide to your clients.

If you’re in the business of offering a technology platform or mobile app that allows users to exchange points for rewards, you need an incentive provider that’s in the gift card business. At Blackhawk Network, we can be that partner—just connect via API and deliver the incentives your partners want.

Sales-based channel incentives are the most common type of partner incentive. For these incentives, channel partner reps are awarded based on sales volume, margin, product-type, or for exceeding goals for incremental growth. Channel sales incentives help manufacturers scale vertically, horizontally, or improve profitability.

There are ways to reward your channel partner businesses and individual team members too, helping to make your sales go further.

With a channel incentive, you can reward both your partner’s team and their business. For instance, you can provide:

  • Incentives and rewards for the channel team and for individuals
     
  • Help and support for a partner such as a marketing development fund (MDF), training and increased product knowledge

Incentives like this can motivate and maintain the momentum of top performers, while providing partners with ways to motivate and upskill the whole team to give them the best results.

Channel sales incentives can take the form of reloadable or single-use prepaid cards or gift card rewards for short-term promotions. There are also more traditional forms such as points-based merchandise and incentive travel rewards – the latter of which has experienced a sharp decrease in viability and popularity with the rise of Covid-19.

Introducing reseller and vendor channel incentives isn’t just about boosting sales and loyalty though – by increasing engagement and investing in your channel relationships, you also improve knowledge and understanding of your products,which helps to clarify your offering throughout the supply chain. Perhaps more importantly, it also improves the customer journey and experience, helping create customer loyalty and advocates.

As with any channel incentive scheme, it’s essential that you identify the right method and approach to motivate your sales partners – this will ensure that your efforts bring a genuine return and drive bottom line results.

Power your incentives programmes with our reward cards

It is important that the incentives that you offer your channel’s teams, and their business, can be customised to them. Which is why as the reward card experts, we can help you grow your company.

Our rewards catalogue – including Mastercard® Prepaid Cards and a variety of retailer gift cards – can provide you and your partners with a robust array of reward cards. You can utilise incentives for your partners and also enable them to do the same for your products. We manage fulfilment, and let you get back to managing your business.

Gift cards 

Your partners will be able to shop in thousands of retail and restaurant locations across the UK with our One4all gift card. 

Your channel partners and salespeople can choose to spend their reward however they wish, encouraging them to sell your product more readily and feel appreciated. They’ll remember the feeling of enjoyment they got from their purchase (whether it’s an item or experience) and put your brand at the forefront of their mind. These memories will be a constant reminder about how much you value them. 

One4all gift cards can be given in a physical or digital format, and there’s also the ability to brand the cards with your company’s logo and preferred design. 

Select

Alternatively, how about implementing an end to end reward platform, with all admin taken care of?

Instantly distribute an eCode via email or SMS and allow your salesperson to swap its value for the gift card or eGift of their choice. With a huge range of retailers available, this digital platform provides a fast, scalable way to easily reward your channel for big and small wins. Plus, you can fully personalise the website and accompanying communications for ultimate, ongoing brand engagement.

 

Interested in finding out how offering channel incentives can be beneficial for your company? Fill out the form on your right and one of our customer loyalty experts will be in touch.

Talk to us about your next channel incentive programme