7 Common Channel Partner Incentive Program Mistakes

Identifying the most common channel partner incentive program mistakes is critical to your program’s success. Great channel partner incentives can motivate your sales partners to sell your products or services and remain loyal long-term. But many programs make one or more of these common mistakes, costing their brand time and money and damaging partner relationships.

The state of the United States economy and supply chains worldwide makes sales more difficult than ever. Partners can be instrumental in opening doors to new markets, boosting sales, and increasing profit margins by lowering go-to-market costs. The best programs promote a mutualistic relationship between the partner and the brand and avoid these seven mistakes.

Mistake 1: not defining program goals or strategy

SMART sales goals are the foundation of a good channel partner incentive program. If you do not define what you want to achieve with the sales incentive program, it will cause misalignment between business and incentive plan objectives. It’s setting the organization up to throw money to the wind and hope something comes back. 

SMART goals should be:

  • Specific
  • Measurable
  • Achievable 
  • Relevant
  • Time-bound

You also need to know your North Star metric. Depending on your growth stage, your North Star metric could be ARR, revenue, sales, or margins.

Related article: 14 Top Sales Incentive Plan Design Tips

Once you have decided which North Star metric aligns with your organization’s growth strategy, choose two or three key performance indicators (KPIs) that give you a good picture of how your program is tracking to that north star metric. 

Some of the KPIs to consider are: 

  • Active pipeline value
  • Opportunities per partner
  • Training and completion activation rates
  • Partner types (Active, pending, and inactive)
  • Program abandonment rate
  • Partner satisfaction
  • Deal registrations
  • Closed deals
  • Prospect engagement rate
  • Average deal size
  • Percent of content engaged
  • Discount percentage
  • Profit per customer

Mistake 2: Inviting all your channel partners

When it comes to a mutualistic relationship, being selective is key. Inviting all your channel partners into your program opens your brand up to the possibility of wasted money and unnecessary complexity. 

Vetting candidates thoroughly and choosing the right one based on their saturation and proximity to your target audience will help you avoid wasting dollars and resources on partners that don’t carry their weight. Compare partners regularly and cut or restructure any that aren’t performing to their peers.

Mistake 3: Not including partners and internal stakeholders in the planning

Channel partner incentive program mistakes often result from poor communication, especially in the planning process. Creating an individualized incentive program requires the participation of all internal and external stakeholders. 

Ensure everyone involved knows what you expect of them. Involving internal stakeholders prevents conflict. Plus, your internal sales teams can lend partners a helping hand.

Provide as much visibility into the program's mechanics and each partner’s progress towards their sales goal at as granular a level as possible, ideally through a partner portal or directly into their Salesforce or CRM software. Constant feedback from both sides is key to success. If your partners feel included in your incentive program planning and understand how it can help improve their business outcomes, they are more likely to adopt and promote it internally. 

Mistake 4: Making it too complicated

Your program doesn’t have to reinvent the wheel. Sometimes, channel partner incentive program mistakes arise from the channel manager’s desire to impress partners with special offers (gift cards are great, but only if partners know how to use them).

Related article: How to Manage Partner Conflict with Neutral Sales Comp

Do this, and you run the risk of building a program full of partners who don’t know what sales incentives they’re working toward or what the sales performer has to do to earn them. If your enrollment process is too complex, you might even spook potential partners out of applying. 

A complicated program can also interfere with how partners sell. They may not know what materials they need, how to get them, or how to successfully communicate the value of your products or services to achieve customer loyalty.

Winning programs provide partners with a simple set of behaviors they wish to accomplish and a straightforward path toward earning set incentives. 

Mistake 5: Poor communication & training

Communication, training, and support are vital to a beneficial partnership. How you train your partners sets them up to sell or fail. Your partners don’t know the product the way you do. Understanding the benefits of your product and how it fits into the industry is key to conveying the value of your product — and selling it. 

After you’ve set your team up for success, communication throughout the long-term lets your partners know when and why they earn channel sales incentives. That keeps them engaged and shows them what behaviors result in the best outcomes. 

As the relationship progresses, your partners will also need answers, marketing materials, subject matter expertise, and general support. Open lines of communication (and a little help from automation) ensure all parties have the tools they need to succeed, keeping the ball rolling in the right direction. 

Mistake 6: Poor data collection

Clean and easily accessible data is the key to measuring the success of your program. At the very least, you’ll need to track the metrics you set as KPIs. Programs that don’t diligently collect data are blind to visualizing how close (or far) they are from reaching their goals. 

Identify the data you need to gauge partner sales performance, where that data will come from, and ways to automate or reduce the administrative workload required to compile, verify, and organize the data. 

Related article: How to Create a Winning Data-Driven Sales Strategy

Most organizations have problems collecting and managing the huge range of data needed to manage a channel partner sales program. They use a mish-mash of business intelligence tools and manual processes, incentive compensation management software, partner management software, and Excel to get the job done. The manual handling of inputs and an array of systems causes errors that can cost millions if missed. Forma.ai was the only incentives technology purpose-built to eliminate that problem.

Mistake 7: Only analyzing the plan periodically

Leaving your program to run itself for months or quarters invites chaos. If you let your program fall apart throughout the year, your periodic assessment and planning session will require compiling and analyzing 12 months of data. You could miss optimization opportunities, overlook overspending, and run into performance issues without realizing it.

Getting a real-time view of your partner incentive program performance allows you to course-correct before too much damage is done or take advantage of opportunities faster.

That is only possible with a fully automated inflow of clean and reliable data, as discussed above.

The key to avoiding common channel partner incentive program mistakes? Data.

Partner programs run on data. Data shows your partners how to be successful, shows your organization how to benefit from them, and is paramount to assessing and optimizing program performance. Get your data management straight, try out incentive solutions, follow the tips above, and the rest will fall into place.

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