💡 KEY TAKEAWAY
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Investing in an incentive program for your internal sales team or external partners can greatly enhance your operations and drive further revenue, but you need to keep your program relevant. Many companies will launch programs with plenty of fanfare, only to see engagement drop off after the initial hype.
Without care, a program can become stagnant, ultimately turning into a drain on budgets rather than a driver of growth. In fact, one study by McKinsey showed that approximately 77% of incentive programs failed to achieve their KPIs in their first two years.
Disengaged partners don’t just stop selling your products – they drift to competitors. |
Having a “set it and forget it” mindset can turn an investment into a mere expense, so it’s worth examining some better alternatives.
Why Do Incentive Programs Fail? The 3 Main Culprits
Incentive programs fail largely because of poor design and poor connection to their selected audiences, with key issues including:
- Overly complicated structures and administrative friction – When a partner needs a Ph.D. to understand how to earn an award, they simply won’t bother. Unclear rules, vague eligibility guidelines, and delayed reporting all work against program momentum. Easy-to-understand structures and simple enrollment processes drive partner participation more than anything else.
- “Cash traps” that lead to entitlement – Offering cash incentives within your program can seem enticing, but the result is a system that is more transactional than transformative. Cash rewards start to feel like regular compensation for your partners, which can lead to expectation and entitlement rather than motivation. Special rewards and experiences, meanwhile, stand out.
- A lack of emotional connection and relevance – Giving your partners generic rewards makes your very partnership seem generic and not thought out. Both unappealing rewards and irrelevant communications hurt your retention efforts, because your partners want to feel seen in addition to being paid.
Designing for the Long Haul: Behavioral Incentivization
A successful program will incentivize behaviors, not just the final sale. Whether you are creating a program from the ground up, or refining an existing one to better attain key metrics, you want to ensure that core elements are accounted for, like:
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Boosting client retention
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Completing training materials
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Reviewing product and service demos
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Increasing year-over-year purchases
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Increasing sales of specific products
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Promoting your services over competitors
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Facilitating cross-sell and up-sell opportunities
Key insight: Rewarding not just the destination (sales), but also the journey (training), keeps your partners motivated and produces better results.
Plus, the “goal gradient effect” has shown that people work harder as they approach a goal. Implementing a clear, tiered structure, supported by engaging visuals and progress trackers, will let your partners know where they stand.
The QIC Advantage: Strategic Partnership Backed by Customized Software
Many of the problems listed above are the result of cookie-cutter programs that don’t take into account the specific needs of industries and their partnerships. To truly benefit from long-term engagement, you need a customized incentive plan that avoids the “set it and forget it” approach.
Quality Incentive Company stands out because our programs:
- Can be designed for any market
- Allow you to measure different types of success, such as sales or customer satisfaction
- Offer rewards that align with your business and the needs of your channel partners
- Use online platforms for easy data tracking
Plus, our IncenTrac® platform is designed for “no mysteries” transparency, allowing users see exactly why they earned or missed points. This eliminates the lack of feedback that kills program momentum.”
In terms of rewards, we offer companies and their partners:
Premier merchandise from name brands like Samsung, Apple, Dyson, Microsoft, Honda, Cuisinart, DeWalt, and more
Travel packages that cover stays, local adventures, cruises, fan experiences, and more
In short, we’re your solution for keeping your internal and external teams engaged, motivated, and producing the results you’re looking for.
FAQs on Incentive Programs
What are the leading indicators in an incentive program?
Leading indicators are proactive behaviors by your internal and external sales teams that you can reward to drive future success. They can include completing product training materials, registering new leads, or attending safety meetings, in addition to hitting sales KPIs.
How often should we refresh our channel incentive program rules?
Avoid program fatigue! Best practices suggest regularly refreshing communications and evolving earning structures, rather than keeping the same rules year after year. Examples include factoring in seasonal promotions and new product focuses.
Create a Customized Program with QIC
Don’t let your incentive program stagnate and lose effectiveness. Choose a solution that’s customized to your field, your goals, and your partnerships. Reach out to our team for bespoke programs designed to maintain momentum.
