Today’s businesses face many challenges due to globalization, technology and an increase in demands and expectations. Organizations know they must adapt and innovate to stay ahead of the competition. One of the best (and often overlooked) ways is to engage your own employees and channel partners through incentives.
Incentive programs aimed at internal and partner audiences not only increase engagement and inspire service-oriented behavior, but also significantly impact an organization’s overall success and profitability. Brands with channel incentive programs increased total revenues by 32%.
“Customers will never love a company until the employees love it first.” —Simon Sinek
Motivating Channel Partners Through Incentive Programs
As businesses continue to expand and operate in global markets, the importance of engaging channel partners as a growth strategy has increased significantly. To ensure success, it’s essential to motivate and engage this indirect sales audience through channel partner incentive programs.
Related: How and why to focus incentives on rewarding channel behavior, not sales.
At it’s core, channel partner incentive programs are simple. The more a partner participates, the more awards they reap. And the more they benefit, the more loyal partners become. Targeted incentive programs contribute to your marketing goals and help channel partners grow their business.
But engaging your channel partners can be a little more difficult. Here are some tips on how to motivate your partners to achieve your business goals.
1. Define objectives.
Before launching an incentive program for your channel partners, it’s essential to define your business goals and objectives. Determine what you want to achieve and how you plan to measure success, then design a program to align with the goals.
2. Understand your audience.
It’s important to understand the needs and motivations of your channel partners. Knowing what drives them and what they value will help you create an incentive program that resonates.
3. Create relevant incentives.
Once you have a clear understanding of your channel partners, craft relevant incentives that align with their interests, preferences and business goals. For example, some audiences are motivated by cash, travel vouchers and merchandise, while others prefer training and educational opportunities.
4. Use effective communications.
We can’t stress the importance of communication enough when engaging your channel partner audiences. Ensure partners understand the incentive program, awards and eligibility. Communications should be clear, timely and consistent to keep partners motivated.
5. Collect and analyze data.
To ensure a channel partner incentive program is meeting goals, it’s essential to measure and analyze performance. Track partners’ progress and the impact of the incentive program on sales and profitability. Use this data to optimize the program.
With a well-designed channel partner incentive program, meeting your business objectives is much easier. For example, when an international manufacturing company launched an incentive program to promote brand standards, they motivated independent dealers to enhance their products, services and facilities for a better customer experience. Top performers received wrapped refrigerators to improve the waiting room for customers, and branded apparel built awareness with their channel partner audience. It worked: 25% of the bottom-tier dealers shifted into a higher level of performance against their profitability metrics by participating in the program, among other notable results.
Some of the same steps for implementing a channel partner incentive program apply to employee audiences. But to achieve the maximum benefit, incentives should be part of a comprehensive engagement strategy.
Retaining Engaged Employees Through Incentive Programs
Employee retention is a critical challenge for many organizations today. High turnover rates can be disruptive to business operations. Employees who are not engaged in their workplace are twice as likely to look for a new job. Replacing them is costly. And if they don’t leave, disengaged employees can also be a real drain. Employees who are not engaged or who are actively disengaged cost the world $7.8 trillion in lost productivity. That's equal to 11% of global GDP.
Here are a few tips on how to use employee incentive programs as a key engagement and retention tactic.
1. Understand your employees.
It's important to understand what motivates your employees and what they value. Conduct surveys or focus groups to gain insights into what types of incentives would be most meaningful. For some employees, monetary incentives such as bonuses or stock options may be motivating, while others may prefer non-monetary incentives such as flexible work arrangements or professional development opportunities.
2. Provide opportunities for growth and development.
Consider offering training and development programs, mentorship opportunities or tuition reimbursement programs. These initiatives can help employees develop their skills and advance their careers within the organization.
3. Recognize and reward performance.
Implement an incentive program that rewards employees for their hard work and achievements. This can include bonuses, awards or public recognition of their accomplishments.
4. Create a positive work environment.
Ensure your workplace is inclusive, supportive, and encourages collaboration and teamwork. Foster a healthy work-life balance by offering flexible work arrangements or wellness programs. Aligning your incentive program with the company culture to further support a positive work environment.
The strongest recognition and reward programs are tied to the brand promise, well communicated and deeply embedded in the organizational culture. Successful companies create a competitive advantage by taking care of their employees. Many studies have found that organizations that use employee incentive programs experience a 79% success rate in achieving their established goals when the reward was offered.
Engaged employees with greater tenure can help an organization maximize profits because they have a better understanding of products,services and business processes. If they’re client-facing, they can collaborate with customers more effectively and knowledgeably than a newer employee.
For example, an organization that revamped their employee recognition program after a strategic merger made a direct connection between recognition and retention. If new hires received at least one recognition in their first 60 days of employment, they were retained 14% higher at three and six months.
Creating Employee & Channel Partner Buy-In Has a Ripple Effect
Incentive programs are no longer an add-on. They’re essential for organizations that aspire to grow and stay ahead of the competition. We’ve seen incentive programs yield incredible results, regardless of industry:
As these stories show, you can’t afford not to create an incentive program. Effective programs encourage employee contributions and strengthen ties with channel partners, both of which impact the bottom line.
ITA Group is the force behind award-winning channel partner and employee engagement solutions. Read why we're a trusted expert to many leading brands.