What Is a Channel Incentive Program?

What Is a Channel Incentive Program?

Nichole Gunn

What is a channel incentive program? A channel incentive program is any plan or strategy designed to influence the behaviors of channel partners. In exchange for actions that benefit their channel partners, incentive program participants earn rewards such as debit/gift cards, merchandise, or travel opportunities.

Typically, the goal of sales channel incentives is for business-to-business (B2B) brands to increase channel sales, elevate average sales performance, and achieve better channel partner loyalty and retention. The idea is to develop better, more meaningful and mutually beneficial relationships with channel partners so that, together, you sell more products to customers and increase profit margins.

What is a channel incentive program and why use it?

The most common reasons that brands use channel incentive programs are to increase revenue, retain customers, build company or brand loyalty. Incentives can make a big difference in distribution channels, especially those where brands don’t have much wiggle room in terms of product changes or price.

In many B2B industries, product quality is dictated by government regulations or industry standardizations. Groundbreaking innovations in technology or design are uncommon and, when they do happen, they must pass rigorous testing and approval protocols. This may leave brands unable to offer channel partners much that the competition doesn’t. In fact, 86% of B2B buyers see little difference between their suppliers.

The key to standing out among B2B competitors is to be a brand that’s memorable, convenient, and enjoyable for channel partners to do business with. Channel incentive programs help with that.

What is a channel incentive program? - Image showing woman using channel incentive program showing performance stats

What are examples of channel incentive programs?

Typically, when someone asks “What is an incentive program?”, they want to see examples of successful channel incentives. The most successful channel incentive programs are designed with a clear understanding of the participants’ preferences and needs. All sales channels are unique in some way. Partner businesses and salespeople have varying priorities and motivations that will determine how effective your incentive rewards will be.

Along with being attuned to partners’ objectives and interests, effective channel incentive programs keep your partners engaged with new reward-earning opportunities. Luckily, brands have a variety of options when it comes to which rewards, they offer and how they fit incentive programs into their overarching channel sales and marketing strategies. Your channel incentive program never has to lose its luster!

Some examples of channel incentive programs:

Group Incentive Travel

You can reward your top-performing salespeople or most-valuable customers with a group incentive trip. When they share unforgettable experiences with your team members and get to know each other on a more personal level, salespeople and customers develop a strong emotional attachment to your brand. The trust built on incentive trips can vastly improve the productivity of channel partner relationships.


Rebates are a great way to thank your channel partners for their repeat business and make yourself more appealing than the competition. Offer partners a certain percentage of their purchase amount back to them in the form of a rebate when they buy in bulk, for example, or during seasons preceding a product’s demand surge. Partners will appreciate you making their decisions easier, and you’ll increase revenue.

Sales Performance Incentive Funds (SPIFFs)

SPIFFs are typically associated with sales promotions designed to push certain products off shelves quickly. Debit or gift card rewards make excellent SPIFFs. Because these cards are so versatile, recipients typically use them quickly, so your reward will have an impact sooner rather than later.

Learning Incentives

Keeping your channel partners’ training up to date is one of the most necessary but notoriously difficult tasks in channel management. Training rewards give partners extra incentive to complete training courses, earn certificates, or brush up on their product knowledge with bite-sized daily trivia.

On-the-Spot Rewards

When you catch channel partners in the act of giving 110%, showing extreme competency, or coming up with clever solutions, you can reward them on the spot with physical or digital reward certificates. These certificates grant partners with online reward points that they can spend in an online rewards catalog with millions of items for them to choose from. It’s a great way to connect the feeling of unexpected recognition and rewards to your brand.

Sales Competitions

Adding a competitive element is a great way to spice up a typical sales promotion. The friendly competition can add a spark of motivation to salespeople who earn bragging rights in the form of rewards or seeing their name at the top of a public leaderboard.

How do you create a channel incentive program?

Launching a successful channel incentive program requires key steps:

  1. Specify your channel incentive program’s goals.
  2. Establish your budget.
  3. Analyze and query your audience to determine which rewards would motivate them most.
  4. Choose incentive rewards to offer.
  5. Identify key performance indicators (KPI’s) that will help track your program’s success and return on investment (ROI).
  6. Plan specific sales promotions.
  7. Educate your participant audience on the program’s rules and specifications.
  8. Track sales reports, engagement activity, and other incentive program data to determine your ROI.
  9. Use what you’ve learned to improve your program and its results!

Want more channel incentive program insights?

Still hungry for info on sales channel incentives? We’ve got plenty of resources! Check out our incentive FAQs, our white paper study on incentive program benchmarks, or our free ebook guides!

We also offer free consultations and product demos with our channel incentive program experts.

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