How to Build and Manage Channel Incentive Programs

Channel incentive programs are powerful marketing strategies. They reward channel partners (contractors, installers, distributors, suppliers, retailers) for using and promoting your products.

In a saturated market, channel incentive programs give partners a compelling reason to choose your brand over your competitors. And this, in turn, helps you:

• Drive sales
• Promote new products
• Increase engagement
• Build brand advocacy
• Access new markets
• Collect customer, performance, and market insights

Here are some of our top tips for how to build and manage a channel incentive program, with examples to get your creative juices flowing.

6 Tips for Building and Managing a Successful Channel Incentive Program

1. Keep it Simple

Design your channel incentive program around your partners. Make it easy to understand and use, harnessing receipt validation technology – which covers invoices, as well as purchase and delivery orders – to provide multiple options for redeeming rewards.

This lets you go beyond traditional check-in-mail deliver mechanisms to cater to a range of preferences. For example:

• Gift cards
• Direct bank transfer
• Digital rebates

Ultimately, the easier your program is to navigate, the more engagement you'll get.

2. Set Realistic Partner Goals

Think about how partners earn their rewards. Partners work hard and have bills to pay, so make sure your goals are realistic and attainable. Set the bar too high and people won't see the value in joining your program.

3. Tier Your Program

Your best performing channel partners deserve the best rewards – it's only fair. Tiered channel incentive programs allow you to reserve your most valuable rewards for your best performers, with dynamic earning mechanisms based on different types of achievements.

The first step to creating a tiered channel incentive program is audience segmentation. This allows you to separate your partners based on certain traits, like lifetime value. Then, you can deliver personalized offers and rewards that match their preferences, goals, or status. Show them their success matters to you.

4. Use a Mixture of Rewards

Partners appreciate having multiple reward and incentive options. Alongside traditional financial incentives, like rebates, add some variety to your program with experiential rewards, tickets to exclusive events, or training opportunities. After all, variety is the spice of life.

The key is to personalize rewards to each customer, based on your partner insights and audience segments. Value means different things to different people. Just because one partner prefers cash rewards, doesn't mean another will.

5. Communicate Clearly and Regularly

Regular communications keep members engaged.  Digital rebate management platforms let channel partners track their program status, including progress towards their next rebate or other reward. Keep your messages clear and concise to avoid confusion.

Personalization also play a crucial role. Avoid sending one-size-fits-all communications. Aligning your messages to each partner's goals helps to forge stronger relationships, increasing engagement.

6. Measure and Adapt

Review your channel incentive program continuously, monitoring performance over time to adapt to changing partner expectations, market conditions, and industry trends.

Incentive programs are a rich source of insights that help to inform your strategic decision making across the value chain – from product innovation and demand anticipation to co-marketing opportunities. Remember, change is the only constant in life. The best channel incentive programs understand this and evolve with the times.

Selecting Your Channel Incentives

With so many incentive options to chose from, it can be difficult to know what's best for your channel incentive program. 

We recommend selecting incentives based on your business goals, the type of channel partners you work with, and their motivations. Additionally, best practices advise scaling your rewards based on partner performance and value.

In terms of the specific program incentives you can offer, popular examples include:

• Complimentary products: free products or samples partners can use to showcase your offerings.
• Rebates and discounts: money-off future purchases, digital gift cards, etc.
• Awards: trips, vacations, exclusive events, travel vouchers, or even plaques that acknowledge your top-performing partners.
• Referral incentives: rebates on future purchases and tier upgrades that encourage partners to recommend your products to their peers.
• Volume or performance-based incentives: awarded for hitting sales milestones, bringing in a certain number of leads, etc.
• Training opportunities: give partners the opportunity to learn new techniques and diversify their skills with exclusive training courses.
• Sales support: educate partners about your products and teach them how to sell effectively with incentivized certification programs.
• Market development funds (MDFs): fund partner marketing activities such as webinars, radio ad spots, marketing events, or trade show booths.
• Sales performance incentive funds (SPIFs): reward sales reps for reaching certain milestones, such as selling a specific number of products in a defined time frame.

Hayward’s Digital Channel Rebate Program for Installers

Haywards is a household name in pool technology manufacture and installation, with a diverse product range including filters, pumps, and LED lighting. The company created a channel incentive program that rewards installers who use their products for repairs and upgrades.

Installers can upload before and after photos of their projects to show new Hayward products in situ. The program includes various promotions, allowing for member tiering and segmentation. Additionally, installers can earn reward currency and exchange it for a variety of digital reward options and denominations.

Barilla Drives Sales Through Rebate Program

Channel incentive programs don’t have to be complicated, as Barilla proves with its successful digital rebate program celebrating National Pasta Month.

The program offers restaurant owners $5 rebates for every case of Barilla pasta they purchase (up to a maximum value of $500). Members also gain access to exclusive recipes and tutorial videos, showcasing what they can do with Barilla products.

Generac Grid Services & Sask Power Offer Smart EV Rewards

Smart EV Rewards is a plug-and-play EV charge profiling and load shifting channel incentive program. It helps utilities companies better understand EV grid load and shift charging to more desirable times. Needing a fast and effective way to issue digital rewards to customers based on enrollment and other behaviors, GGS chose Snipp.

GGS integrated a rewards platform into their existing infrastructure. Members earn PayPal credits for participating in the program and sharing their vehicle type, charging type, and location. In return, GGS gets valuable data that helps them determine the impact of varying incentive levels on charging locations and times.

Brands and Partners that Work Together, Succeed Together

Well-run channel incentive programs benefit everyone.

Partners earn a mixture of rewards that scale the more they engage with your program, making them feel like trusted partners – not just customers. For brands, channel incentive programs help to drive sales and expand your reach, while providing the insights you need to inform your product roadmap and strategic direction.

Designing a channel incentive program doesn't happen overnight. But by following these tips, you can give yourself the best chance of success.

Contact our experts to start building your channel incentive program.