Third-party organizations like distributors, managed service providers, system integrators, consultants, or value-added retailers who are involved in sales and marketing of services, products on behalf of a company are channel partners. Firms that offer your products as a part of their offerings are also a part of this list. Channel partners allow companies to reach more customers with third-party storefronts and provide a great consumer experience.
Channel partners can be representatives, distributors for several products. Thus, to yield better results in the form of sales numbers, companies run exclusive rewards programs.
Studies have pointed out that incentives and rewards programs help in improving engagement level and job satisfaction; no matter if its on-field sales team or digital marketing reps. Rewards and loyalty programs also help in strengthening the relationship between a company and its channel partners.
At times, brands do set loyalty programs in place; however, they fail, as they miss ongoing as well as a long-term commitment. They lack incentives, technological support, and appropriate training and finances to achieve goals. Here’re six pitfalls that companies should avoid.
- One size does not fit all
Before a few decades, incentivization started with cash, then moved to high-value aspirational products and travel experiences, perks for family members, and so on.
These days, brands offer travel and experience-based incentives, multi-store vouchers, white-label goods, branded merchandise as rewards and incentives.
Some dealers would appreciate accident and health insurance cover for their reps, while others may prefer the usual gadgets or Amazon e-vouchers. When it comes to engaging best performers with loyalty programs, the type of rewards and incentives that worked for a dealer in one city may not at all work in another. Highly customized plans are the need of the hour.
Feedback sessions and annual surveys can help in gathering data to draw cost-effective action plans and channel strategies. It can also help in determining gaps in existing programs.
Companies’ senior management should also offer personal time for best performers from the channel partners to understand their issues and of course, to know their choice when it comes to rewards and incentives they would appreciate.
2. Slow adaption of technology-based incentive programs
Investing in a deal registration system or partner relationship management systems can be a good idea. Partners can use the same for registering prospects and protect their rights to pursue the deal exclusively at a later stage.
Case studies show that reps from channel partners who can access and verify points in their rewards program account via their mobile phone often put more efforts towards meeting their sales targets. Thus, rewarding reps in the right way and on time can help in building trust and good relationship that can further result in loyalty.
Using channel incentives technology can help brands keep track of what they have distributed amongst channel partners throughout the year. On the other hand, reps can check their points and redeem the same using the same system/mobile app.
Advanced AI (Artificial Intelligence) and ML (Machine Learning) powered tools enable companies to offer personalized system-generated reward programs to keep channel partners engaged. Such systems generate innovative and more meaningful rewards on the basis rep’s achievement, occasion, and previous track records. Technology makes the entire rewards and incentive allocation procedure transparent. Such systems can help in setting up processes for preventing fraud and overpayments. Unfortunately, the adaption of technology is quite slow.
3. Incentive strategy not fine-tuned
Studies have pointed out that by 2024, as much as 75 percent of the customer-facing executives working for various channel partners would be millennials. Reward programs to motivate their behavior need to be different compared to others in the market. That’s not visibly happening at most places.
In this era of social networking sites, partners can be transacting (customer-facing) or new ones like influencers, advocates, etc. Incentive programs need to work differently for these individuals.
Put simply; channel loyalty & incentive programs do not need a linear approach anymore. They need customization, personalization, on-demand automated workflows.
Failing to fine-tune incentive and rewards strategies and incentive programs can be disastrous, especially in this era, when the buying journey of the customer is changing.
4. Programs are often overcomplicated, and brands do not consider the partner’s perspective
Sales and customer-facing representatives often feel some loyalty programs introduced by brands are complicated to understand with ample restrictions.
At times, the partner’s perspective is not taken into consideration, and significant changes are introduced without proper intimation.
Such steps demotivate, negatively impact the reps and the overall product engagement levels. In such a scenario, they might prefer to focus more on selling competitive products
5. Introducing multiple programs only to forget them after a week
Experts suggest, only increasing revenue should not be a goal for any loyalty program. Rather than looking for immediate gratification, the aim should be to involve partners in a long term commitment.
The objective for the brand should be to deepen ties with top tier partners and helping emerging partners to move further on the ladder. There should also be a mechanism to determine the impact of the loyalty program. Of course, large corporates and big brands have dedicated management for this task. However, smaller brands launch loyalty programs without a proper plan in place.
Research indicates sales representatives working with distributors serving more than one brand often participate in multiple loyalty programs. Thus, every company needs to continually focus on its incentive schemes so that it can stand apart from others. Some brands launch their programs and fail to focus on them after the launch event. It can be disastrous. A brand should communicate with its channel’s sales team daily for establishing lasting relationships.
6. Brands do not show the willingness to co-invest in human resource
Channel partners often hesitate to increase their sales-force due to the burden of additional costs. However, they happily do the same when brands show the willingness to co-invest or co-sponsor for hiring dedicated sales reps to work for their products.
Companies or vendors also need to show a willingness to offer technical training for customer engagements. It can be an in-person session, online courses, or via leaning systems. Offering sales scripts, competitor comparisons charts for products, and other sales enablement content can prove an added advantage. Brands, uniquely, new ones can incentivize these specific individuals for creating new sales.
