According to research by Frederick Reichheld of Bain & Company, a 5% increase in customer retention can lead to an increase in profits of between 25 and 95%. If your objective is genuine customer loyalty, read on for our recommendations on why recognising the crucial steps toward a sale is the key to enhancing your bottom line.

• The importance of the journey
• Designing effective outcome-based reward and recognition programmes for your channel partners
• The benefits of outcome-based reward and recognition programmes
• Driving sustainable growth through effective channel partner incentives

The importance of the journey

In indirect distribution channels, your customer’s experience is dependent on your channel partner’s ability to represent your brand values and customer offer. In some ways the customer experience is even more valuable than the financial transaction itself. A poor customer experience can impact retention and share of wallet by reducing the customer’s lifetime value, and the effectiveness of any channel partner incentive.

The outcome and the journey – both matter

Many incentive and loyalty programmes incentivise one outcome – the sale. But to drive end-customer loyalty it’s important to reward and recognise the behaviours that contribute to the sale and attach measurable outcomes to those too. Imagine a marathon where only the finish line is rewarded, ignoring the training and effort put in along the way.

By defining measurable outcomes for the whole journey and its component parts we can define success for the various behaviours that contribute to overall customer excellence. For instance, rewarding a channel partner for providing exceptional pre-sales support can be just as important as rewarding the final sale. This holistic approach ensures that every step of the customer journey is valued and incentivised.

Designing effective outcome-based reward and recognition programmes for your channel partners

We recommend a discovery and design process that starts with the end in mind; what’s the objective of the incentive or loyalty programme? Inevitably, the first measure of success will be related to profit, whether that’s customer lifetime value, retention or incremental growth. With the overall objective in mind, we then suggest mapping the behaviours of the channel partner and their customer-facing staff to understand what contributes to the objective’s success.

Step-by-Step Guide:

 

• Define Objectives: Start by clearly defining the objectives of your incentive programme. Are you aiming for increased sales, improved customer retention, or enhanced product knowledge?
• Map Behaviours: Identify the key behaviours that contribute to these objectives. For example, if the goal is incremental sales driven by a new product launch, focus on behaviours like product training and customer engagement.
• Attach Outcomes: Link each behaviour to a measurable outcome. For instance, track the number of training sessions completed or customer feedback scores.
• Monitor and Adjust: Continuously monitor performance and adjust the programme as needed. Underperformance should trigger targeted interventions, such as additional training or support.

For example, if the goal is incremental sales driven by a new product launch or target customer diversification, then ability and knowledge are key contributors to a successful outcome. Integrating microlearning into the day-to-day activities of the channel partner enables understanding and ability to be checked. Measurement of ability then enables personalised, targeted learning modules to be developed for the partners to close gaps in understanding and support sustained improvement in the overall measure of success for that partner.

By developing a point of view on what ‘good’ looks like for each part of the customer journey, the right behaviours can be recognised and the overall outcome rewarded, considering performance in all areas.

The benefits of outcome-based reward and recognition programmes

The benefits of outcome-based reward and recognition programmes are that not only do they allow the measurement and recognition of less measurable behaviours that drive customer excellence, but they can also support team collaboration, where multiple team members are contributing to overall customer excellence.

Real-World Benefits

Enhanced Collaboration: 

By recognising and rewarding collaborative efforts, teams are encouraged to work together towards common goals. For example, a sales team and a customer support team might both be rewarded for their roles in achieving high customer satisfaction scores.

Improved Customer Experience: 

When all aspects of the customer journey are valued, customers receive a more consistent and positive experience, leading to higher retention rates.

Increased Motivation: 

Employees and partners are more motivated when they see that their efforts are recognised and rewarded, not just the final sale.

The tools for success

BI WORLDWIDE supports clients in executing this holistic approach to reward and recognition programme design. Our in-house channel experts are on hand to support with discovery and identify the right drivers for channel success. Our channel engagement solution features a flexible rule builder and powerful segmentation engine that not only directly links a behaviour to a profit producing outcome, but also enables communication nudges and programme personalisation that goes beyond participants simply having the opportunity to choose their own rewards.

Driving sustainable growth through effective channel partner incentives

Incentivising the sales journey is just as crucial as incentivising the sale itself. By recognising and rewarding the behaviours that contribute to a successful sale, businesses can enhance customer loyalty, improve partner engagement, and ultimately drive long-term profitability. Effective channel partner incentives require a holistic approach that values every step of the customer journey, from initial engagement to post-sale support.

By defining clear objectives, mapping key behaviours, and attaching measurable outcomes, companies can design incentive programmes that not only achieve their profit goals but also foster a culture of excellence and collaboration. Tools like BI WORLDWIDE’s channel engagement solution provide the necessary support and flexibility to implement these programmes successfully, ensuring that every partner is motivated and equipped to deliver outstanding customer experiences.