We've all seen portrayals of inept actors and actresses. These fictionalized thespians all have the same question for their exasperated directors: “what’s my motivation?”
While motivation is something imaginary to actors, it’s something very real to vendors and to their channel partners. Vendors face a wide array of distractions that jeopardize their ability to get partners to do what they want them to do: time issues, partners’ own selling activities and even the motivational activities of other vendors.
Taking the Monetary Approach
While vendors acknowledge how important motivation and incentives are, most of them are lax in determining the effectiveness of their incentivization programs. Vendors have a tough time allocating market development funds (MDF), let alone measuring ROI of those funds. Examining the return on bonuses for training and utilization of marketing resources has also proven problematic.
That doesn’t mean that financial rewards are going away. A study by CCI last year showed that the amount spent by vendors on MDF and other financial incentives increased 10 percent year over year in 2013.
The trick, if you’re a vendor, is to use these incentives the right way. A well-designed program motivates partners and their personnel in such a way that they see the value in that behavior — and then continue that behavior after the incentive is over. It should lead them to discover ways of doing things that are profitable for you, but also for them.
A poorly-planned incentive program is used as a “Band-Aid” to fix a problem temporarily. Bad sales may be bolstered by incentives, but when the incentives are taken away sales will drop as a result. In many cases vendors end up offering perpetual rebates, co-op funds and MDF money, cutting into their margin. And the moment the partner finds value in a competitor’s product — or, perhaps, incentive — he’s likely to leave that vendor behind.
How do you know if your program is working? Analyze the data – if you’re using some form of partnering automation, the numbers should give you the answer. Plot your MDF and co-op spend in conjunction with the performance of the partners who receive that money.
If all is well, after incentive money heads the partner’s way, you should see a jump in sales — a jump that holds steady even after the end of the incentive. If the trend lines follow each other — MDF money is followed by a spike in sales which drops back to its previous level — your incentives aren’t leading partners to the behaviors you want to see from them. And if the sales needle isn’t moved at all by the expenditure of MDF and co-op finds, you need to reevaluate where you’re sending your incentive money.
Where Gamification Comes In
All of this discussion of money and how it may fail to realize ROI might make you think you have no other options besides casting cash to the wind and hoping for the best. But there’s another way of incenting partner behavior — especially in training and on-boarding. You may have heard of it. It’s called gamification.
By presenting activities in a game-like context and by providing rewards for the completion of those tasks, you can motivate partner personnel toward the behaviors you want — without spending money. The idea plays on the human desire for achievement, status and competition. By applying gamification techniques, activities that would otherwise seem mundane can be repositioned as part of a larger contest-like process. Likewise, the completion of these activities is instantly rewarded, providing positive reinforcement of these behaviors automatically.
Gamification usually centers on virtual rewards, like points, achievement badges or the filling of a progress bar. Individual “players” may get a personal scoreboard showing their rewards. At the same time, because competition is a tremendous motivator, making rewards for accomplishing tasks visible to other players encourages others to participate.
Gamification works extremely well in training. Breaking up training tasks into small sections allows the vendor to provide an award at their completion and encourage further exploration of the training materials. Gamification also allows the users to see who else in their organization has completed training materials. Thus, users who have completed the materials can act as mentors to their fellow “competitors.”
Gamification is not a simple process, it requires some up-front effort to plan the gamification system and to coordinate content. Because it correlates directly to accreditation and certification, it should be managed through the same partner management application being used for other programs.
Whether you use financial incentives, gamification or any other motivational technique, the goal should be to get partners to keep doing what you want them to do, even when there’s no extra money in it in the form of incentives — because there’s more extra money in the form of revenues generated from these new behaviors. Choose those behaviors carefully, and make sure you consider their impact on your partners.
About the Author
Chris Bucholtz is the director of content marketing at Relayware and former editor of the CRM Outsiders, Forecasting Clouds and InsideCRM. A journalist based in the San Francisco Bay Area, he's been covering technology and customers for over 18 years.
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