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Why Bigger Incentives Do Not Improve Partner Performance
Many channel leaders assume a channel incentive program that is not working just needs more funding. Walsh's research says that gets the diagnosis backward. Vendors that focus purely on payout size are solving the wrong problem, and salespeople are not simply, in his words, coin operated.
The real question channel leaders skip is what the partner is actually trying to accomplish. Walsh points to three things most programs get wrong:
Chasing historical transaction volume instead of the behaviors and actions that build a partner's business over time
Treating a rebate as the whole strategy, then calling the program a failure if it does not show an immediate return
Assuming incentives alone can make up for a total economic opportunity that does not work for the partner
If the underlying economics does not work for the partner, no amount of partner incentives changes that.
How to Motivate Channel Partners Beyond Rebates
Walsh's core finding, drawn from the same Channelnomics research behind e2open's ease of doing business data, is direct: incentives are not the chief driver of partner performance. The opportunity is.
Once a real opportunity exists, incentives can accelerate it further. Two things must be in place before that layer works:
Customer consideration
A buyer who already recognizes there is value in what the partner offers, ahead of any lead-generation or brand-marketing push.
A clear mission
Something the partner can do for the customer, on the vendor's behalf, that lets the partner earn money independent of any single product sale.
Remove friction from that opportunity first, then layer on incentives. That combination is what moves a partner forward, not incentives alone.
How to Balance Monetary and Non-Monetary Partner Incentives
Partners rarely put this into words themselves. Walsh notes that most partners feel the difference between a program built around real opportunity and one built purely around payouts, but cannot always articulate it. The responsibility for creating that difference rests with the vendor.
Getting channel incentive management right also means balancing two kinds of incentives:
Monetary partnership rewards. Rebates, market development funds (MDF), and sales credits that reward specific behaviors and transactions
Non-monetary incentives. Support that lowers a partner's cost of doing business, such as enablement, training, and shared resources that ease the burden on their balance sheet
This is the territory e2open Channel Management solutions are built for. E2open Channel Data Management brings partner incentive plan management, from simple rebates to complex multi-tier programs and sales credits, together with the channel data and partner performance metrics that show where the real opportunity sits, not just historical volume.
Partner incentive plan management, from simple rebates to multi-tier programs and sales credits
Channel data and partner performance metrics that point to where opportunity actually sits, not just past transaction volume
Enablement and engagement support that can help lower the cost of doing business for partners
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