Choosing the Best Channel Incentive Program for Your Business


Sep 21, 2021 • 8 min read

Channel incentive programs are a win-win solution for both businesses and their partners. A Silicon Valley survey found that incentives can boost partner sales and profits by as much as 40 percent. At the same time, businesses can increase revenue, broaden their market, and obtain more loyal partners for the long run.

If you have read this article, you will have learned the powerful impact of channel incentive programs on businesses. Let us dive more into incentive programs so that you’ll understand them better and be able to determine which program is most suited for your business!

This article will cover:

  • Channel incentive programs at a glance
  • Elements a channel incentive program needs to have
  • Types of incentive programs
  • Different reward schemes are available
  • Determining the best program for your business

Channel incentive programs at a glance

Channel incentive programs are essentially a tool that modifies channel partners’ (resellers’, distributors’, agents’, retailers’) behaviors to help you meet your business goals. Depending on your business type and needs, the program can be a loyalty program, referral program, sales incentive program, or a mix of each.

As channel partners hold the key to influence end customers buying decisions and increase your revenue, channel incentive programs are a proven way to nurture strong partner relationships and stimulate sales in the long run. Ultimately, businesses need to know the essential elements of a successful incentive program and the reward schemes they can use to activate channel partners.

What are the elements of a channel incentive program?

Up to this point, you may already have an idea about what a channel incentive program is, but its details and elements might still be a blur. Here are the crucial elements that make up an effective incentive program.

  • Seamless and easy-to-use interface

Your program needs to have an interface that allows you and your partners to use it in a breeze. On your partner’s side, they need to be able to submit claims and rebates, view ongoing targets and activities, and check their performance and earnings easily. For you, the program must let you monitor partners in real-time, pick and distribute rewards, and many more.

The good news is, you can incorporate this element in your program even if your business has no idea where to start. TADA provides a digital solution to customize a channel incentive program most suited for your business. 

  • Communication system

Next, consider how the program will be a ‘bridge’ that allows constant ongoing communication with your partners. If your program lives in your partners’ mobile device, it needs to be interactive enough not just to end up being unused. Communication tools like push notifications, SMS, and emails need to be incorporated to let your partners know about ongoing offers, reward schemes or simply greet and motivate them throughout their journey.

  • Points collection and redemption system

Points collection is an exciting way to keep partners engaged in your program. It is a form of gamification where partners earn points for every milestone they reach. They can then redeem the points into various rewards. A channel incentive program allows partners to collect, view, and exchange their points easily. You can also use third-party integrations if partners redeem their points as cash or e-wallet credits so the transfer can occur instantly and securely.

  • Data collection and analysis

Another advantage of a digital incentive program is that it enables you to obtain valuable data and better understand partners’ behavior. This data can be further segmented either demographically or behaviorally to help you devise different programs that are truly impactful for each segment! Next, your program needs to have an analytical dashboard that measures your revenue and expense. That way, you can know if your program is working or needs more adjustments.

What are the different types of channel incentive programs?

With the essential elements above, you are one step closer to launching your channel incentive program. The following homework determines the kind of program that works best for your specific business needs. Of course, you can mix up these different program types in your business.

  • Point-based program

Point-based programs are popular because everybody understands how they work: partners gain points whenever they complete predetermined conditions. These conditions do not always mean making sales, as you can incorporate many engagement activities in your program to make it more attractive for partners to participate. Points redemption can then be done to get cash, physical items, gift cards, and many more.

  • Tiering program

Instill a competitive spirit within your channel partners using tiering programs! Set tiers or levels that they need to reach to unlock more incentives. The more requirements they fulfill, the higher they will be on the tier. You can also have weekly contests and give different badges for different tiers for this type of program, making it more engaging and fun.

  • Referral program

Start a snowball effect and get more valuable channel partners from the ones you already have. Referral programs help you enlarge your partner base by giving incentives to those who bring in new resellers, distributors, or retailers to your business.

What are the different types of channel rewards?

Rewards are one of the most important pillars that make up your channel incentive program. To set up your reward schemes, the general rules of thumb are:

  1. Give rewards for partners that participate in desired behaviors
  2. Give more rewards for partners that exceed the desired behaviors

The key to successful reward schemes is to reward partners throughout their entire journey with you, not just when they make a sale. To encourage certain behaviors from your partners, you will need to find out what partners find attractive enough. The same Silicon Valley survey mentioned above found that channel partners rated the following reward schemes as the most appealing:

  1. Performance-based
  2. Big deal discounts
  3. Volume rebates

Of course, this is just a general guide, and the same cannot always be said about your specific partners. They might already be used to getting promotions, incentives, or prizes from every other business they work with, so figure out what motivates them by leveraging their data or even conducting surveys.

In general, reward schemes can be classified as monetary and non-monetary. Monetary or cash rewards are easily understood and universal. They feel gratifying but run out efficiently, and their impact is not as long-lasting as non-monetary rewards. An ideal channel incentive program understands the different rewards and mixes them up to create an impactful recipient experience. Some rewards you can incorporate besides monetary rewards are:

  • Gift vouchers – shopping, food and beverage, travel, or event entries
  • Physical items – gadgets or products from your own business
  • Recognition awards – Certificates, Sales Trophies / Plaques

How to determine the most suitable program?

After learning about the different types of incentive programs and rewards, you can determine which one is most suitable for your business. Here’s how:

  • Know your channel partners

To empower your channel partners with a suitable program, you need to take time and get to know them. Learn about their day-to-day operational processes, goals, challenges in selling, team structure, and existing incentive schemes. This way, you can figure out which incentive program will be most attractive and helpful for them.

  • Determine your budget

Your incentive program should deliver results while still staying within your budget. Don’t forget that the impact it brings is long-term because it will help build loyalty from your channel partners and ultimately bring significant revenue to your business.

  • Maintain measurement, analysis, and adjustments

Your program and reward schemes may change along with your business goals, and that’s sensible because your channel partners are dynamic. Once you have chosen your incentive program, please keep track of partners’ performance to understand how the program is driving them and your business, making necessary adjustments along the way.


Channel incentive programs help businesses activate channel partners to sell more and be more loyal to them. A successful incentive program needs a seamless interface, communication system, points redemption, and analytical dashboard to help businesses pick and distribute rewards, engage partners, and monitor performance. In the program itself, various monetary and non-monetary rewards can be offered to motivate partners. By knowing partners’ behaviors and carefully maintaining program performance, businesses can develop the most suitable incentive program to meet and exceed their goals.

Still not sure how to activate and reward your distributors, resellers, and agents? TADA has created channel incentive solutions for many businesses, and we’ll be happy to help! Contact us and start your journey with us today.

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Nida Amalia

SEO and Content Marketing Specialist who loves art, music, and movie.