How to maximize your incentive dollars

03.07.2009
In an effort to generate business and drive revenue in a challenging economy, vendors are making significant changes to their channel incentive programs, with an eye to generating results today instead of tomorrow, according to one analyst firm.

Laz Gonzalez, research director, channel management strategies with SiriusDecisions, says while vendors have traditionally employed a range of incentive programs geared towards short-term, medium-term and long-term results, his research indicates vendors are diverting more of their incentive spend towards programs designed for immediate results.

"They're using incentives much more to create demand and influence partner behaviour, with a heavy emphasis on the latter," said Gonzalez. "They're using incentives in a much more point-based approach and allowing multiple channel partners to participate."

Overall, vendors aren't cutting their spending on incentives, but they are reallocating the dollars within their broader incentive budgets.

"I'm not seeing it reduced, but I am seeing more companies trying to energize their channel at a lower cost of sale than a direct model," said Gonzalez. "Those companies making a shift towards an indirect model are fueling those efforts through incentive programs more than before."

Increasingly, says Gonzalez, vendors are using incentives to move their partners towards a common target, and to achieve specific goals, such as raising awareness of a product or solution, encouraging training and certification of a new product, or encouraging penetration of a specific vertical or geography.