5 Ways in Which Channel Incentives Generate Positive ROI
Channel incentives are implemented to drive behavior. This means they are used to curb old behaviors, establish new ones and sometimes these incentives can be used to shift partners into trying out a new practice. These incentives are not always payment-based. In fact, channel incentives are performance-based which are aimed to improve the reach or yield of your business.
In this article, we will discuss some channel incentives and see how they impact a business. As it turns out, channel incentives are known to generate positive return on investment and help increase customer engagement. For more details pertaining to how channel incentives solve problems related to customer engagement and channel partners, you can visit power2motivate.com.au.
Rebates are like the vanilla ice cream of channel incentives. This is something most companies provide. Rebates are targeted towards specific products and specific moments. They are used strategically for volume driven promotions to encourage partners to sell more products to the end customers. This way, the partners get an agreed upon percentage of the sale they make. So, when rebates are fixed at higher rates, it increases the sales revenue.
2- Deal Registration
Deal registration enables you to analyze the sales cycle of your business. Deal registration is another channel incentive which is given to the partner who identifies an early business opportunity. Usually this incentive gives a percentage of each deal that was registered by a partner. The advantage of this channel incentive is that it helps you get an early insight into your sales cycle and helps manage it.
3- Staffing Headcount
Staffing or embedded headcount is used to offset staffing costs by paying for certain training certifications for the partners. This helps the partners assume bigger roles when the company wants them to, instead of hiring a new batch to fulfill the company’s demands.
4- Activity and Fees Based Incentives
Activity-based incentives are rewards that are given to partners when they carry out certain activities that you can’t or don’t want to do yourself. For instance, an activity-based incentive can be used to pay your partner to manage all contracts with grocery stores or other retail points where your product or brand is stocked.
5- COOP (Cooperative Marketing Funds) and MDF (Marketing Development Funds)
MDF and COOP are marketing based funds that are used to develop your brand. COOP is a percentage of a rebate that is matched by you and the vendor in order to achieve the marketing goals cooperatively. And MDF is given to a partner who drives marketing activities. These days, the use of incentive channels among smart marketers has become widespread and common.
Although it’s not necessary that all channel incentives are payment-based, they do involve monetary rewards that are given to partners. However, the purpose of channel incentives is to improve the performance of partners and drive their behavior. Channel incentives can be extremely effective for your business as they create a behavior that becomes permanent.