. The Ultimate Guide to Successful Channel Incentive Programs | Northstar Meetings Group

The Ultimate Guide to Successful Channel Incentive Programs

Six tips for keeping program participants engaged and ready to win.


Making an impact and growing your market share through a channel can be difficult. Though you might have a superb product and an excellent go-to strategy, if you have no means of motivating your stakeholders buy or sell, your strategy may fall flat.

Including a channel incentive program can really make the difference for a program's strategy. The following six tips can help keep your product top of mind and improve revenue while surpassing ROI.

1. Keep it simple

The real glory of a channel incentive program is its simplicity. Setting up the way your channel partners will be rewarded is a balancing act: You want to provide them with some really satisfying rewards, but you don't want to break the bank in the process. Following are two rules of thumb for setting up the earning structure of your program.

  • Reward partners for exceeding common behaviors (rewarding small steps along the way to the end goal).
  • Reward partners for partaking in desired behaviors (larger rewards for milestone achievements).

2. Communicate benefits

Channel partners are often acquired via in-person communication. But in order to scale the incentive, you'll need to start marketing the benefits of your product/service to a mass of sales personnel. It's a simple concept: The more you talk about your channel incentive program, the more people will be aware of it. However, much like setting up the rules for your program, there's a fine line between effective communication and something that's over-done.

You're most likely competing with several other companies trying to grab the attention of the same channel partners. Consider these tips for standing out while avoiding message fatigue:

  • Set up a routine: Humans are creatures of habit, so appease to their nature. Establish a regular email/communication schedule that will prove to be both expected and reliable. 
  • Have fun: Your channel incentive email communications don't need to hammer out every detail of the program with a fine-tooth comb. Instead, focus on livening up email verbiage and injecting personality into all communications. 
  • Create value: Lace emails with interesting industry or career information; the contest doesn't necessarily have to pertain to your company. Instead, think about what you can do to help your partners do their jobs better. 

3. Make goals attainable

While incentive program goals should be aspirational, they also need to be attainable, especially at the beginning. Kickoff the program by rewarding steps-to-sale behaviors, like reaching out to participants about opportunities or taking quizzes and obtaining certifications related to a product.

Reward a simple increase at first, perhaps a one-to-three percent increase in sales. Depending on your channel and average sale price, you'll probably see a majority of program participants able to achieve such a goal. Keep your reward delivery simple from the get-go. The benefit of starting small is that you'll be able to attract a greater number of partners to your program than when you attempt to offer a big prize that might seem to be an unattainable goal from the start.

4. Engage your audience

The worst thing that can happen to a channel incentive program is for it to become stale. Revitalizing a dead program can cost a lot of time, effort, and money -- and that's if your partners still care about what you're offering. Develop creative ways to keep your program running and your channel partners grooving to the sweet sound of rewards. You can do this in the following ways:

  • Collect data: Set up your incentive program to capture as much understandable and actionable data as possible. Collecting data on your participants will allow you to make much more informed, accurate and strategic decisions while figuring out how to best engage your audience.
  • Run layered promotions: To keep things interesting throughout the duration of a program, consider layering rewards along the way. This might come in the form of a giveaway, a sweepstakes or a contest. Whichever vehicle you choose, a prize or reward can be given away to a grand-prize winner, or to all those who participate to keep them engaged.
  • Get participants earning: While running programs, we've found that the most loyal and engaged channel incentive participants are those that have earned points within the first 24 hours of signing up. This is because it gives them a stake in the game and shows them the value of the program right away. 
  • Surprise and delight: Sprinkle in surprise rewards You might choose to reward your top partner in the region with a trip or cash bonus, or you could simply include a promo code a the bottom of one of your newsletters for discounts, or randomly reward a lump sum of points to a participant once per quarter.
  • Offer new opportunities: Creating new earning opportunities can afford your program some much-needed engagement, provided you don't make rules too difficult to understand.

5. Determine the best reward

There's an ongoing debate in the incentive world on whether or not to use cash or non-cash rewards while incentivizing your channel. This battle has raged long and hard for a number of years, with the Incentive Research Foundation spearheading the non-cash corner. For those unaware of this never-ending debate, here's a crash course.

As you might imagine, non-cash rewards can come in the form of virtually anything, as long as it's not money. These rewards can be merchandise rewards, experiences, travel, event tickets, etc. There are many reasons why the IRF backs non-cash incentives. One reason in particular is what we call "The Pink Cadillac Effect". In essence, the effect states that rather than giving out cash to participants, who may be inclined to use it to buy groceries or fix their homes, reward them instead with something they can use for pleasure (like driving around a big, pink convertible Cadillac). The idea, backed by IRF research, is that rewards geared toward pleasure are objectively more motivating than those geared toward the mundane. 

It is important to note that non-cash rewards don't work for every audience, though. Sometimes cash is just a better motivator for people. That's why it's essential to do that research and collect data. Your channel might just be more monetarily motivated, and that's definitely worth finding out.

6. Monitor key performance indicators

Which key performance indicators should you be targeting? 

Enrollment rate

Review the number of enrolled participants versus those that could be enrolled in the program. Analyze year-over-year changes in this rate.

Participation rate

If you have a reward website, this can be easily deduced by site visits, time on the site and (in the email marketing) open and click rates.

Percentage earning points

Similar to engagement rate, monitoring how many participants are regularly earning points will give you an idea of how many people are engaging actively with the program. It can also be a good indicator of how easy/hard it is to earn points.

Points-Issued frequency

This may vary based on the type of program you have, but it's important to track how often points are being issued to participants. How many points get issued out monthly, quarterly, yearly? Comparing this year-over-year can give you some good insights as well.

Ultimate redemption rate

Looking at this overall can give you a good snapshot of the general health of a program. Are points being redeemed? What are they being redeemed for and how often? Look at the data and adjust accordingly.

Average redemption time

How long are people taking to redeem the points that they've been awarded? Figuring this out can give you a good idea about possible changes to your rewards offerings, give you ideas on pushes for redemption or help you better understand participants' saving patterns.

Satisfaction rate

You can glean a number of things from satisfaction -- how people feel about your general company or brand, the overall program, peoples' net promoter scores, satisfaction with certain aspects of the program, ease of use and so much more. 

Revenue from participants vs. non-participants

This report is one of the greatest ways to determine the direct ROI of your program.

Customer lifetime value

Lifetime value is a great way to judge revenue over time. Determine this by finding out how long participants are staying in the program and measuring if revenue or activity is growing year-over-year.

While any channel incentive program would benefit from being backed by these measures they are by no means a complete list. Your KPIs should be tailored to your needs and what's important to you and your company. While working with an incentive expert, you might choose to tease these KPIs out more.

There's a lot that goes into a channel incentive program. Just remember that these programs are often long-term investments. The more effort you put into your investments, the more creative you can be, and the more risk you take, the more the reward will be. Always remember to make the bar for entry as easy as possible, provide value for your partners' needs, inspire them to attain goals, find creative ways to engage with awesome rewards and keep yourself in check with KPIs. Follow this list, and you'll have a successful channel incentive program.. 

Chris Largent, demand generation marketing manager for HMI Performance Incentives, is responsible for strategizing and implementing content and digital marketing strategies for the company. The above article was originally published in the channel incentive guide eBook,The Definitive Guide for an Effective Channel Incentive Program.