Time and time again companies find themselves stumped trying to work out whether their loyalty and incentive program is improving business performance. They need to know that their investment of money, time and resources is worthwhile, for their own and their stakeholders' peace of mind.
The main problem at hand is that there are so many different factors influencing sales and revenue at any one time, that it’s really tricky to solidly pin down changes in performance to the channel incentive program.
In this post - the second part of our series on measuring success - we move away from science, to show how your business can borrow some pearls of wisdom from the world of psychology, where behaviors and habits are studied, analysed and adapted, to understand and ultimately re-define their outcome – in this context, sales.
As we discussed in a previous post, nowadays businesses are learning about the importance of focusing on long-term success rather than short term sell, sell, sell. This new outlook, known as “incentive engineering”, isn’t only beneficial for generating partner loyalty, or making sure that channel partners are more skilled in the future, it also makes the results of your incentive program easier to measure.
It is no longer enough to simply incentivize and reward sales. To generate true loyalty and make a consistent difference in partner performance for the future, companies need to guide channels towards ‘soft’, pre and post sale behaviors. These cover a whole host of activities, such as:
- Collecting rich customer and prospect data
- Deal registration
- Attending training, courses and workshops
- Managing and organizing data efficiently and effectively
- Launching successful marketing campaigns
- Calling existing customers and prospects
What it boils down to is rewarding any behaviour that contributes towards an incremental increase in sales.
Setting up this type of incentive engineering program requires a good deal of planning. You need to sit down and work out exactly what kind of behaviors you want to incentivize. Here is a step-by-step guide for how to go about it.
- Examine your very best channel partners and sellers and see what kinds of activities they do well – those are the ones you want to see springing up across all your channels
- Think of any behaviors you’d like to see that no-one is doing yet, for example, getting involved in a specific training course
- Prioritize them and work out how often exactly you want each to occur
- Define rewards for each activity – the reward value should be calculated based on effort required from the participant and the extent to which it will drive sales
- Set clear Key Performance Indicators from the outset – ROI can then be measured by comparing the number of behaviors to the baseline
You then use Partner Relationship Management software to track how much your incentives have increased the behaviors you were looking for.
One pitfall of this method is that it is hard to get an accurate measure of how behaviors affect sales. In order to get reliable data on sales and profit generated from your incentive program, you’ll have to look to the Test/Control method discussed last week.
Some people struggle with this behavioural model because they don’t have a system in place to measure how many times a behavior or activity has been undertaken. If you don’t have robust technology in place, you won’t be able to set up a reward system, so having effective software is a must. Fielo offers highly intelligent technology which allows you to input specific bahaviors into a rules engine and seamlessly monitor and quantify them while automatically generating rewards for participants.
The 'Quick Guide to Measuring Your Channel Incentive Program' shows how the scientific test and control method can help your company isolate its incentive program as a single factor impacting company ROI. The handy ebook also provides alternative avenues for determining success, including the 'personal feedback' method, where companies go directly to partners to find out what works for them. We’re sure to cover the ideal method for you.