Partner Incentive Programs: Be Careful What You Incentivize
Incentives are one of the most powerful tools for driving results from partner programs.
But many companies are using them wrong. And that leads to bad outcomes: missing important opportunities to build influence over results, setting up incentives that unnecessarily cut into profit, or worse, fielding incentives that actually diminish results.
As the pioneer in Salesforce-native incentive automation (and now a leader in cloud-native channel performance), we’ve had ample opportunity to see how incentives work in the real world. Sometimes they work exactly as intended, but often they fail to deliver ROI—and sometimes they even drive counterproductive behaviors.
So here are some simple do’s and don’ts to get better value:
Don’t: Incentivize deals closed
Probably the most popular incentive brands use is rebates or rewards for every deal closed. This isn’t inherently bad, but it tends to lose effectiveness over time as partners bake it into their margins and forget about it.
Instead, consider incentivizing quarter-over-quarter improvement, hitting revenue targets or other stretch goals. Or set a target for a number of deals closed (say, 10) and provide incentives for hitting that, not just an incentive for each deal.
Don’t: Set unobtainable goals
When you set one-size-fits-all goals for everyone, you risk demotivating your Tier 2 and 3 partners. An appropriate goal for your top partners might look unobtainable to smaller ones, and discourage them from acting.
We like to say: a fixed goal model makes your big partners bigger and keeps your small partners small.
There are two ways to fix this: You could set a fixed goal for a certain segment of partners, and a different one for a lower-capacity segment. Or, you can think in terms of improvement goals, like a 10% gain over a previous period’s results. (Note that it’s hard to scale that kind of program without some kind of automation tool).
Do: Incentivize behaviors (not just results)
Incentives can drive results, but your partners don’t always know the right plays to get those results—or aren’t motivated to do them.
You have a lot of insight into the behaviors that drive results for your partners, such as:
Running demand gen programs you’ve already tested
Sending templated emails
Meeting goals for customer meetings
Taking training modules to learn about a product
When you know the steps to reaching a goal, incentivizing your partners to take those steps—rather than just the final result—can deliver big impact.
The Golden Do: Personalize incentives
Excuse us for making this point often but it’s the core truth of partner performance: Different partner types need different things. And they also care about different things. A rebate or reward that’s attractive to one partner may not matter to another, or it may be highly unsuitable for their business model.
You also want different things from your partners. Whether it’s breaking into a new market or launching a new product, or getting better forecasting data, you’re trying to accomplish different things.
Which means one-size-fits-all doesn’t cut it.
If you don’t have the resources to scale custom resources for every partner—or don’t think it will deliver good ROI—consider using an automated incentive management tool that lets you segment incentives by partner types and easily assign different promotion types based on what you want them to achieve.
Interested in amping your incentive programs and getting more from your partners? Talk to a Fielo expert.