Most manufacturers know that channel incentive programs are an effective way to engage and connect with their sales representatives, distributors, dealers and more, in a way that ultimately benefits their bottom line. But managing these incentive programs is a whole different ball game.

Managing rewards, tracking individual reps, keeping data secure and trying to implement a system that broadly benefits all your channel partners can be a logistical and organizational headache, to say the least. It can also consume a lot of resources.

This is why companies wishing to streamline their channel incentive program often wonder if it would be better to move the program to a software platform rather than managing their programs in-house.

In this blog, we’ll consider why many in-house programs can be tedious to maintain, prone to error and costly, and how the right software can alleviate many of these headaches.

Why do manufacturers prefer in-house programs?

Traditionally, most manufacturing organizations have used internal resources, teams and tools to run their channel incentive programs, according to our recent report. However, even though the survey found that 72% of manufacturing companies run their programs in-house, few are satisfied with the results they are getting. 70% of managers either strongly or completely believe that their channel incentive program needs improvement.

What are the main sources of consternation?

  • 44% say they are unhappy with participation levels
  • 44% are concerned about their sales tracking accuracy
  • 40% think they spend too much on program administration and/or rewards
  • 38% believe managing their programs takes too much time

So pervasive are the problems that 80% of those running in-house programs believe they would be more efficient if they were managed by a third-party provider.

And they’re right.

Efficiency and clear sight are just a few advantages

Chances are, if you’re like 77% of manufacturing organizations, you run more than 10 promotions a year. This creates a lot of paperwork. And because each promotion tends to be unique, managing rebates, market development funds, co-op funds and sales performance incentive funds can quickly create knots in a program. Third-party software provides an interactive platform from which you can easily manage all these incentives and programs.

Think of it like this: you have all your music files on your hard drive, but no media player to play or organize them. You might try to divide your files into folders, but it’s not an efficient system. Once you download a media player, however, you suddenly have a library where you can keep track of your favorite tunes, create customized playlists and much more. That’s what using the right kind of third-party software can do for your channel incentive program.

Discover the power of customization

One of the key benefits of moving your channel incentive program to a software platform is the ability to create customized rewards and tailored programs for your channels.

Every sales rep and distributor is different, with different strengths and weaknesses. By utilizing sales and training data, you can concentrate on individual channels and more effectively “fill the gaps,” whether that’s through specific rewards or educational content.

Too often channel incentive programs either reward the highest-performing reps or blanket all channels with the same training program. This is a grossly ineffective way of running what could be a much more valuable program.

When properly executed and managed, a channel incentive program fosters positive behavior, while leading to increased sales and better brand awareness. But it takes the right software and the right people.