5 ways to simplify complex incentive programs

By: ITA Group

What you need to know

  • Changes to the channel partner landscape, such as increased partner types and overlapping goals, create overly complex incentive programs.
  • Complexity causes a heavy cognitive load on partners, leading to them disengaging with your program.
  • A combination of clear goals, frequent communications and better technology eliminates unnecessary complexity.

 

Simplify incentive program complexity

Channel incentives are growing more complex by the minute, it seems. Companies are struggling to run them efficiently, let alone effectively. All that work and the programs still aren’t reaching their goals. That can be frustrating. 

So why are incentive programs becoming so complex? Here are a few common factors.

  • More partner types: There are unique engagement requirements for different partner types (e.g., referral partners, resellers, value-added resellers (VARs), affiliates, ambassadors and service partners). And partner types are constantly being added.
  • Increased personalization: Current expectations are for tailored rewards aligned to specific roles, market conditions and performance levels. This requires sophisticated segmentation strategies and dynamic reward structures.
  • Incentive type and objective expansion: SPIFs for short-term sales boosts. Loyalty rewards for long-term engagement. Promotions for encouraging nonsales activities. Managing varied, concurrent goals adds administrative complexity.
  • Budget constraints and ROI optimization. With CFOs scrutinizing incentive budgets more closely, organizations feel increased pressure to eliminate redundant rewards, refine reward mixes and justify expenditures through measurable outcomes. 

Overly complex programs cause disengaged partners, wasted resources and stagnant growth. 

Related: 5 reasons your sales incentive program isn't working (and how to fix it) 

Create a streamlined channel incentive program that works

The goal is to reduce cognitive load for partners. Because partners are perpetually busy, your program experience needs to be intuitive and clear to keep their attention.  Every layer of complexity in rules, communication or tools reduces participation.

These 5 tips help you address key channel program needs while simplifying complex incentive programs. 

1. Be specific about incentive program goals

Analyze and assess your objectives. What’s worked? What do you want to see? For example, you could need increased sales for one profitable product, or you might want to focus on overall revenue. The more focused your goal is, the easier it is for a participant to understand and achieve.

Related: 5 expert strategies to supercharge your channel incentive program

2. Set personalized goals by channel partner type 

Give each partner a goal that’s attainable, yet challenging. Make sure your participants feel like their goals are within reach with some hard work. Partners disengage if targets feel unachievable. 

To get the most out of your program, set individual, incremental goals based on participants’ previous year’s results. Don’t pay out until participants bring in more business than before.

3. Communicate frequently and consistently

One of the common reasons we see incentive programs fail is lacking communication. Clearly communicate what each partner needs to achieve and how those goals were set, making sure they understand how their success ties into the overall program’s impact. Consistent, transparent communication helps partners stay focused, motivated and confident. 

Remember, studies prove you must repeat yourself at least 10 times before people take action. So, communicate important messages often!

4. Use best-in-class channel technology 

The right channel platform goes a long way in simplifying program management, consolidating platforms and improving the participant experience. 

For program administrators, robust technology lets you collect meaningful data, automate important tasks and view reports on overall program results. By putting all these elements in one place, your reduce manual administrative burdens.

For participants, the technology lets them interact with a single, unified system, minimizing multiple logins and encouraging participation.  Personalized dashboards provide real-time visibility into progress, earnings and next steps, reducing confusion.

Related: Best channel partner performance metrics to monitor

5. Regularly review data and adapt the program 

Use partner feedback and performance data (ideally gathered seamlessly from your channel platform) to optimize your program experience and ROI. This will help you identify any unnecessary complexity sneaking into your program and stay ahead of any market changes, adjusting the program as needed.

Build a better channel incentive experience

The best channel incentive programs offer an intuitive, personalized experience for partners. They reward the desired behaviors your organization needs from partners to achieve your business goals, without any unnecessary complexity. 

If you want to learn more about how to build a tailored program experience that eliminates unnecessary program complexity, let’s talk!

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ITA Group

ITA Group custom-crafts engagement solutions that motivate and inspire your people. ITA Group infuses strategies that fuel advocacy and drive business results for some of the world’s biggest brands.