Channel Partners: How to Design a Successful Channel Incentive Program

by | Aug 7, 2023 | Blog


“If you want to go fast, go alone. If you want to go far, go together.”
-African Proverb

In 2019, 95% of Microsoft’s revenue flowed through its channel partners. For one of the world’s biggest companies, this seems like an astounding figure, and one worth paying attention to. And yet, in a 2022 joint survey conducted by Channel Marketer Report and Demand Gen Report, fewer than 20% of B2B executives reported that their channel partner programs were “very effective”.

These figures suggest a gap—between the value of a thriving channel ecosystem and the ability of manufacturers and other B2B businesses to effectively take advantage of that value. When it comes to getting the most out of your channel ecosystem, you need partners you can count on. These partners not only help you move your products effectively and efficiently—they’re also the folks whom you’re trusting with your brand and your organizational reputation.

However, recognizing the importance of your channel partner relationships is one thing. Capitalizing on the value that those relationships bring is something else. So how do you design and implementchannel partner program to get them to buy in? It’s all a matter of asking the right questions.

Why Do I Need a Channel Incentive Program?

The right channel incentive program can help you achieve a lot, namely:

    • You can identify and target the people who are the most valuable points of influence in your channel

    • You give your partners another reason to do more business with you

    • To survey your channel partners and better understand their operations and the effects they have on your business

    • It promotes channel unity with the integration of an overarching partner portal

Channel incentives are one of the most holistic tools available to you to engage with your partners. It connects the channel from top to bottom and improves channel partnerships.

How Do I Design the Right Channel Incentive Program?

As you begin to design the channel program that best suits your business, you must have a clear understanding of:

Your objectives and goals:


    • What behaviors are you looking to change?
    • Is your program more sales-focused or enablement-focused?
    • What results are you hoping to achieve?
    • Are your targets measurable?


Your audience:


    • Which channel partners are you looking to target? (Manufacturer, Distributor, Reseller, Contractor)


    • Who are the points of influence that are best positioned to benefit you?(Manufacturer Reps, Distributor Counter Salespeople, Branch Managers, Contractor Principals, etc.)


Your budget:


    • Is the budget for the program open-ended or fixed?



Your structure:


    • What kinds of rewards will you offer?


    • What sort of data do you hope to collect and analyze?


    • How will you communicate with your audience?

Considering these elements will help you choose an incentive channel program that’s right for you. Let’s take a look at the steps that can help you design a successful channel partnership program.

How Does a Channel Incentive Program Work?

There are several steps to consider when implementing a channel incentive program. Here is a quick six-step process to follow:

Step 1: Identify and target key performance indicators (KPIs) in your channel using a steps-to-the-sale approach

Step 2: Create an incentive strategy that rewards for reaching defined KPIs

Step 3: Communicate regularly and with consistent messaging

Step 4: Measure progress and regularly update participants on their status

Step 5: Analyze results and modify the program on an ongoing basis to ensure continued engagement and success

Step 6: Reward goal achievers / overachievers   By following these six steps listed above, you’ll be in a good position to improve your channel partnerships and increase your B2B channel engagement.

Create Better Channel Partnerships

Your down-channel ecosystem is full of untapped value. Isn’t it time you took advantage of it?   To find out how a channel incentive program fits with your overall down-channel strategy, contact us.

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