How to Build Behavior-Based Incentive Programs
Developing successful behavior-based incentive programs 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 to retention and growth.
Focusing channel incentives on partner behavior rather than rewarding traditional transactions is critical to driving channel success and loyalty.
“Brands that excel at deploying the right mix, level and cadence of incentives will improve revenue and profit from the channel, expand the breadth and depth of customer relationships, and increase mindshare and loyalty of partners.”
—Jay McBain, Principal Analyst for Channel, Partnerships & Ecosystems at Forrester
Communicate the Value of Behavior-Based Incentive Programs
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 Meaning & 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
Ensuring criteria is specific to individual partner staff is a key component of behavior-based programs.
Unlike many traditional incentive programs, behavior-based programs are designed to reach a variety of partners who may not typically be offered rewards for completing specific tasks or achieving milestones.
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 Points-Based Program That’s Scalable
Using points to reward desired behaviors or activities makes your incentive program scalable and 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 with a tailored strategy.
Points give you a standardized way to create program currency. We recommend knowing where you need to incent, so you don’t blow your budget trying to drive every activity. Understand where you can make the biggest impact inside each segment and start there.
A points-based incentive also supports a more direct association between a specific activity and a reward. “It’s important to create a line of sight between the behavior you’re driving and the positive reward reinforcement, drawing them together as closely together as possible,” said Linkenhoker.
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 up-sell 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.
Looking for more tips on how to help your channel programs identify, communicate, enable and incent activities that help partners win business and extend customer lifecycles? Download our white paper today.