The 5 ‘E’s of Incentive Programs

For decades, incentive strategy has been used to influence positive behaviors in the channels that help drive more sales. Although “more sales” may be the ultimate destination, the road to getting there may be blurry. Too often, channel professionals may find themselves jumping from one broader goal straight to another narrower tactic to get them there (like utilizing this tool; launching this campaign; adding this reward.)


The first step to incentive programs is setting a goal. Giving the employees something specific to work towards, such as a certain number of sales to achieve and/or working hours fulfilled. Specific targets will make the incentive program more effective. Administrators should analyze the working environment to find out how to better organize tasks and the best way to set up the program. Furthermore, managers should look outside of the organizational frame, at the broader competitive landscape. For example, it is crucial to always be aware of the programs that your competitors are running.


Sometimes the challenge of “high sales” can actually be a challenge of “higher participation”. For example, a demand for more newly-enrolled active employees. If it is discovered that there is a fair number of employees who have yet to register in your program, the enrollment strategies might need to be improved. Normally, the main tactic can focus on encouraging more selling activities of the active employees. This will have an impact on employee recruitment and thus push the progress forward.


In the context of incentive programs, activity equals sales. The more actively you engage the audience, the better the program is positioned to drive more revenue. Engagement can sometimes take many different forms, but regarding incentive program engagement, it’s as direct as “higher program participation.” The ratio of “those who have submitted sales or repeated sales” over “those who enrolled in your program” equals the engagement rate. The key question about the engagement is: “are my employees performing at their max potential?” When the right incentive strategy takes place, underperforming participants would become more loyal and active.


Giving incentives should not be the only focus of incentive programs. It is equally important to have a program that bridges the gap between managers and employees. Better sales training can help to achieve that. Employee training is useful for encouraging sales performance. A good program would focus not only on sales goals but also on employee training goals.

Forrester’s 2020 State of Channel Partner Incentives study reported a triple-digit percentage increased in the use of major incentive programs. Compared to the previous year, the index which showed an increase includes lead reporting (+ 258%), managed business objectives (+ 194%), deal registration programs (+ 141%), and certification/specialization achievement (+ 100%).


Once you’ve covered all the KPIs, there will always be opportunities to optimize performance across all of them. Tinkering and testing different tactics of your program can help elevate performance from alright to great. Similarly, elevating program performance above the status quo must involve strong vigilance of insight. Above all, visualizing program performance can help keep a pulse of activities and also cultivate potential actions that can improve program performance. If an incentive doesn’t work so well on the audience, there’s space for elevating by reinvigorating the promotion. Opportune complement towards employees who performed well is the most cost-effective way to increase individual happiness and job satisfaction.

In a nutshell, reaching program objectives is a journey, with many variables along the way. It’s important to keep an eye on the prize. However, remember to keep the other eye on the key influencing actors along the journey to have a balanced incentive program.

By Katie Kabat

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