FOCUS. PEOPLE. COMPETENCY

Planning a Channel IncentiveOptions and Considerations

Contents

● Sell and Claim ProgramsBy far the most common program structure. This relies on sales people claiming for sales they have made. Points are converted to prizes. Programs of this type are run regionally and locally by most vendors.

● Company Rebate ProgramsThese have evolved in response to some resellers not allowing personal sales incentives. The vendor puts points into a company account which can be converted to rewards or be taken as a cash rebate.

● Other Innovative ExamplesIncentive programs don’t have to follow the standard models. We have provided an example of a Microsoft program that breaks the mould.

● Key ConsiderationsThe key things to think about when planning an incentive program.

This short PPT explains the key options and considerations when planning a European incentive program. There are four slides, detailed below.

Individual ‘Sell and Claim’ IncentiveXerox Case Study

This type of ‘sell and claim’ model is by far the most common form of channel incentive program. Many vendors run simple versions, where the reseller sales person simply registers a sale on a website and accrues points. This

version from Xerox involves a ‘credit card’ and a sophisticated website to manage points and claim rewards.

Sales personregisters for theprogram on line

Sales person is issueda card

Points earnedprizes redeemed

1

2

3

5

Claims are auditedagainst distribution

sales out dataSales person claims

for eligible deals using the on line tool

4

Company ‘Rebate’ IncentiveHP Case Study

This type of incentive model has developed to overcome the fact that some resellers do not allow their staff to participate directly in sales incentive programs. It costs more money to operate this system as all sales are

rewarded – no sales person needs to make a claim. On the plus side there is no admin for the sales person.

Reseller companyregisters for theprogram on line

A list of eligible products is published with associated points

12

3Points are credited automatically to the

reseller account every month based on

distribution sales out data

4 The reseller can convert to cash

or rewards at company level, or

choose to distribute the points to employees

Company or individual

rewards

Company‘rebate’

"The reseller community has always been asking for a sales incentive program that does not ask them to make claims or do any admin”

HP Channel Manager

A Different ApproachMicrosoft Case Study

The Microsoft ‘Beat the Geek’ program was hugely successful. It’s easy to register and is intended to be ‘viral’ so enrolled members can easily invite colleagues to join. The focus is on training and product knowledge. Points are

accumulated by answering quiz questions correctly. This sort of approach creates a ‘buzz’ but has a short shelf life.

Landing Site

Register Personal Details

Take Weekly Product Test

Win Prizes

This program runs in monthly cycles. There will be a ‘campaign’ for a month focusing on a particular product group, then a break before it resumes again.

Note how this program is rewarding knowledge,

not sales.

Things to Keep in Mind

● The Objective of the ProgramIs it a pure sales incentive or is it trying to influence behavior? Most pure sales incentive programs have an impact then fade away, so a tactical approach might be preferable. Behavioral programs are longer term.

● Legal and Cultural ConstraintsSome types of program are restricted by legal or cultural constraints in some countries. Particular care needs to be taken with personal incentives where there are possible tax implications.

● Managing Points and RewardsRunning sophisticated incentive programs is admin-heavy, and if you outsource the process it won’t be cheap. Focus on simplicity.

● How Much BudgetThe main constraint for most incentive programs is the available budget. It’s very hard to differentiate on a limited budget.

Some issues bubble up with incentive programs time and time again. These are the top four.These considerations are particularly relevant to companies looking at pan-European incentives.

Contact: Matt Rowland-Jonesmatt@bchannels.com