Top channel trends in 2024: Build behavior-based incentive programs

In our 2024 channel partner trends, we highlighted behavior-based incentives as a driver of key performance indicators (KPIs). 

While sales bonuses and rebates are important, they often react to past performance rather than drive future actions. To truly motivate partners, it's essential to incorporate incentives that encourage the right behaviors from the start. Developing a successful behavior-based incentive program requires reframing several traditional channel partner program practices. 

It comes down to psychology, specifically positive reinforcement. Reinforcing a behavior with a positive reward (i.e., the incentive) increases the frequency of that behavior.

Use incentives to reward more than sales 

Think beyond the transaction. Tying incentives to a single sales outcome often leads to lackluster or unsustainable results. When you only reward transactions, you fail to enable and reward partners for things like marketing service contracts, upgrades and solution extensions, which are vital for retention and growth. 

Focusing incentives on partner behavior rather than rewarding traditional transactions is critical to driving channel success and loyalty.

Tie behaviors to corresponding outcomes

To build a behavior-based incentive program, determine the metrics that are most important for measuring success. These KPIs can include sales revenue, customer satisfaction ratings or the number of new customers acquired.

Then, define the desired behaviors. Determine specific actions partners need to take to achieve KPIs. 

Example scenario: If your KPI is increasing sales revenue, desired behaviors might include attending training sessions, participating in marketing campaigns or providing excellent customer support.

Communicate the value of behavior-based incentives 

Drive adoption of your behavior-based incentive programs more effectively by communicating priorities and value propositions to partners—as well as the rewards that reinforce alignment. You need partner alignment to build positive emotional connections with the program and strong relationships with the brand.

Ellen Linkenhoker, Channel Solution Line Manager at ITA Group, recommends that vendors prioritize communicating the brand statement and program value proposition when developing behavior-based incentives. Your partners need to understand the value they’ll get by participating in your program. 

Even generous incentives can be insufficient to sustain program engagement without the right communication strategy. Vendors should avoid the common mistake of reviewing their fund allocations and thinking they can reduce communications if the rewards are strong enough. Communications are critical to an incentive program. 

Personalize the partner experience to increase relevance

Segmenting your incentive program can minimize any irrelevant or confusing messaging while still taking advantage of the overall program’s framework.

“Make sure your program can be personalized and segmented so it’s relevant to each participant,” Linkenhoker said. “I prefer to think of an incentives strategy as a ‘personalized engagement program’ rather than just a tool for behavior change. It’s not only about the incentives, but also about engaging with partners at every step to impact the buyer’s journey.”

If brands aren’t engaging partners properly throughout the buyer’s journey, they run the risk of negatively impacting the partner experience. “When brands promote different messaging, often to the same partners, they’re compounding the amount of effort and work a partner has to do to participate,” added Linkenhoker. “We’re in the age of the partner. If you're not easy to work with and somebody else is, you've essentially lost market share.” 

Engage individual partners, one by one

For behavior-based programs to work, earning criteria needs to be specific to individual partners. 

Expanding the incentivized audience can be daunting for some vendors. It requires a deeper understanding of who is doing what and when. Many vendors don't know who's downline inside a partner organization, such as an architect or solution engineer, beyond the salesperson. It’s critical to identify who is in what role at any given time or part of a selling team structure, so you can funnel the right message to the right person.

Programs should be strategically crafted to ensure appropriate incentives are offered to keep individual partner staff focused on their tasks. We’re seeing the need for segmented user experiences that unlock content. There are a variety of incentive types you can use in your program to motivate partner staff and make it attractive enough for them to want to participate. 

Use a scalable points-based program 

Using points to reward desired behaviors or activities helps your incentive program grow. It allows vendors to roll out promotions quickly, especially if you need to see an uptick in a behavior at a specific time or need to target a specific segment.

Win with behavior-based programs in no time

The impact of building behavior-based incentive programs that align partners with the buyer’s journey is substantial.

For partners, it offers more supportive lead generation activities through impactful enablement, allowing partners to capture transactions and stimulate growth through cross-sell, renewal and upsell offerings.

For brands, it offers improved reputation and increased customer advocacy, vendor experiences and revenue.

For customers, it offers an improved customer experience that provides clear messaging and product positioning. Continuous engagement helps build client confidence in renewal or retention decision–making.

Measuring partner participation against the desired outcome of specific behavior-based programs can provide a clearer understanding of where and what type of enablement investments should be made. It will help determine how to drive more partner engagement in buyer-aligned activities and how to gain insight into gaps or areas of improvement.

Learn how to help your channel programs identify, communicate and incent the activities that ensure partners win business and extend customer lifecycles. Download our white paper today.

Note: This article is part one in a five-part series on top channel trends of 2024. Now that you've learned how to build a behavior-based incentive program, check out the other four trends:

• Partner enablement (Coming soon!)
• Partner experience and engagement (Coming soon!)
• Performance data and actionable insights (Coming soon!)
• AI-driven customization (Coming soon!)