How to Build Behavior-Based Incentive Programs

By: Brian Steele
sales team engaged in behavior-based incentive program

Developing successful behavior-based incentive programs requires reframing several traditional 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.

It Takes More Than Sales Rewards

Tying incentives to a single sales outcome often leads to lackluster or unsustainable results. They often fall short on enabling and rewarding partners to market service contracts, upgrades and solution extensions—all vital to retention and growth. It’s also an indicator of partner success, providing a narrow view of the entire customer lifecycle.

Focusing channel incentives on partner behavior rather than rewarding traditional transactions is critical to driving channel success and loyalty, according to Jay McBain, Forrester's Principal Analyst for Channel, Partnerships and Ecosystems.

“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.”

You’ve Got to Communicate Behavior-Based Incentive Program Value Like a Boss

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. “What behavior-based programs are really about is getting that alignment,” said Brian Steele, Channel Partner Engagement Strategy Advisor at ITA Group. “You have to build that relationship with the partner.”

Ellen Linkenhoker recommends that when vendors begin to develop behavior-based programs, they prioritize communication of a core brand statement and general value proposition that “can be personalized and segmented to be relevant to the partner who's entering your portal. I prefer to think of this strategy as a ‘personalized engagement program’ rather than simply behavior change. It’s about more than just incentives—but rather engaging with partners at every step of their journey in order to impact that of the buyer’s journey.”

Even generous incentives can be insufficient to sustain program engagement. And vendors should be careful not to assume otherwise.

“I see a lot of mistakes in the design of programs where vendors are looking at the buckets they put their funds into for execution and think they can skinny back the communications if the rewards value proposition is strong enough. That frame of thinking is incorrect,” Steele said. “What’s critical to a reward program is communicating it.”

And You Cannot Forget About Personalization & Relevance

Segmenting programs can leverage foundational components of the core program and minimize messaging confusion.

“When brands promote different messaging, often to the same partners, they’re compounding the amount of effort and work a partner has to do,” said 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 at that point.”

Start by Engaging Partner Staff—One by One

A key component of behavior-based programs is ensuring that criteria is specific to individual partner staff.

Unlike many traditional incentive programs, behavior-based programs are designed to reach a variety of partners and may not typically be offered rewards for completing specific tasks or achieving milestones.

This expansion of the incentivized audience can be daunting for some vendors, said Steele. “[It requires] a deeper understanding of who is doing what and when. Many vendors don't know who's downline inside a partner organization, in the specific role of an architect or solution engineer versus the salesperson. It’s critical to identify who is in what role at any given time or part of a selling team structure, to funnel the right message to the right person.”

Programs should be crafted to ensure appropriate incentives are being offered to focus individual partner staff on their tasks. “We’re seeing the need for segmented user experiences that unlock content. There's a lot of different things that you can do to enable partner staff and make it attractive enough for them to want to participate,” said Steele.

Then Make Your Efforts Scalable With a Points Program

Using points to reward behaviors or activities helps make this scalable, notes Linkenhoker, allowing vendors to roll something out quickly. Especially if you need to see an uptick in a behavior at a specific time or even to target ‘X’ segment with a tailored strategy.

It's all possible because you have a standardized way to create a program currency when you’re using points as a backbone. We also recommend knowing where you need to incent; simply don’t blow your budget trying to drive every activity. Know where you can make the biggest impact inside each segment and start there.

A point-based incentive also supports a more direct association on a specific activity with an award. “It’s important to draw the action and the reward as closely together as possible to create a line of sight between the behavior you're driving and the positive reward reinforcement,” said Linkenhoker.

You’ll Be Win-Win-Winning With Behavior-Based Programs in No Time

The impact of building behavior-based 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, reputation is improved and customer advocacy increases, vendors experience sustained and increased revenue.

For customers, they’ll benefit from an improved customer experience that provides them with 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 plans can provide a clearer understanding of where and what type of enablement investments should be made. It will help figure out how to drive more partner engagement in buyer-aligned activities, and gain insight into gaps or areas of improvement.

Looking for more tips on how help your channel programs identify, communicate, enable and incentivize activities that help partners win business and extend customer lifecycles? Download our white paper today.

Brian Steele
Brian Steele

Brian has twenty-five years’ experience helping organizations develop and navigate road maps to reaching their "people" goals. During that time, he’s led and supported many complex incentive, employee recognition and customer loyalty programs from roles ranging through operational support, IT development, data insights and analytics, sales and CRM, and solution design. These roles helped him build a broad understanding of the many considerations needed to effectively bring a solution to life.