SDM/U5 Topic 1 Managing the Marketing Channel incentives and margins
(1) More personal contact. They desire more meaningful connections. Broad newsletters from large enterprises are impersonal. They may provide useful information, but they lack a personal touch. At the end of the day, you want to be building a relationship with the sales force, and personal contact is an excellent way to do it.
(2) Better systems. How many systems does your partner need to access to complete a sale and function day to day? Is it four? Ten? Even more? The more systems they must use, the more difficult it is for them to perform an activity quickly. And in the world of high volume sales, every second counts. Think of it this way: If they need to go to ten different places for your product, but only three for another vendor, who do you think they’re likely to prefer? And in today’s massively mobile environment, can you really justify desktop-only access? To gain success, your systems also need to be accessible anywhere, anytime.
(3) More incentives. Yes, incentive programs do help. From monetary bonuses to unique prizes, these incentives can take on a variety of shapes, and target different audiences. Is the prize monetary or recognition based? And is it at the company, team, or individual level? Creating the right mix of each will help you motivate your channel partners.
Step 1: Program Assessment. Take a look at your partners and answer the following questions:
- Who are your partners, and where are they located?
- How does your product fit into their portfolio, and do you have any direct competition?
- How does their individual performance look?
- How does your compensation compare to their other partners?
Step 2: Current incentives. Take an end-to-end look at your current program. Do you have a mix of incentive types? Are they geared toward the corporate or individual audience? Do they emphasize short-term or long-term performance? What behaviors are they attempting to motivate your channel partners, and are they successful?
Step 3: Know your goals. How will you define success? And do you have reporting in place to accurately monitor performance? Also, consider whether you want to make the changes unilaterally, or on a partner-specific basis.
Step 4: Test and learn. Once you’ve made changes, it’s important to monitor their performance over time. And, if they aren’t doing what you intended, then it’s time to adjust.
Bottom line: Your incentive systems should both empower you to draw meaningful conclusions regarding performance and make the necessary adjustments to maximize effectiveness.