Excellent Loyalty Program for Channel Partners Checklist


Feb 7, 2022 • 8 min read

Loyalty Program for Channel Partners (1)

It is critical for any company to cultivate brand loyalty among their channel partners (distributors and all kind of resellers). Loyal channel partners are not only your source of recurring revenue, but also serve as brand advocates, speak highly about your brand that create positive word of mouth marketing to the end customers.

Excellent loyalty programs for channel partners are those that are designed to provide transactional and also emotional value. The effective loyalty program should be able to provide meaningful rewards at each milestone to consistently improve channel partner performance.

And if you want to have a loyalty program or channel incentive for your partners or distributors, as long as it is done in the right manner, your program will be successful in retaining and rewarding top distributors while keeping the revenue streams stable.

Checklist for an Excellent Channel Incentive Program

Channel incentive is one of the effective loyalty programs for companies that rely on supply chain distribution. It is created to motivate employees of manufacturers and vendors, such as distributors, resellers, and dealers as well as reward them for their hard work.

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The majority of businesses in the manufacturing industry rely on these partners to sell their products; in fact 76 % of industrial marketers sell their goods to the end consumer through an intermediary.

A study on incentive from The Incentive Federation, the use of channel incentives among businesses increased by 15% between 2013 and 2015, with companies spending up to $17 billion on channel programs itself.

Now, let’s talk about checklist you can do to create excellent and effective channel incentive program for your own company.

1. Choose the type of channel program you need

As a start, you need to choose the type of channel program that will work best to your business. From this, you can have clearer vison on how to reward your partner, the rewards, the mechanism, and etc.

There are two significant goals of channel loyalty programs that you might consider to pursue:

  • The breadth goal; to extend the channel in order to increase the overall products sold. The goal is to expand your channels and add more partners.
  • The depth goal; to increase market share in existing channel partners to avoid their turnover. As a result, in contrast to the previous goal, the idea here is to get the best results from your existing channel partners.

2. Determine the type of qualified channel partners you need

When considering to implement a loyalty program, it is critical to determine the qualified channel partners that will assist you in expanding your business. Consider gathering the following information from them in order to find qualified partners:

  • Are they familiar enough with your products?
  • Do they have enough knowledge about the service or products you sell?
  • Their commitment level to your product
  • The average number of products they sell per month or year
  • Current engagement with your competitors

3. Define the right rewards for each channels

Once you know more about your partners, the next step will be consider how you can increase their value in your ecosystem. Determine an incremental gain you would like to see for each partners because "one size does not fit all".

  • A wholesaler, for example, may be more excited about a flat tariff scheme or special discounts for bulk order,

  • A retailer will appreciate better selling tools, like customized marketing promotion for younger people, shop branding, etc.

4. Consider training implementation

Following the type of channel partners you want, you should also assess their need for training. But first, you must answer to the following questions:

  • Are your partners also offering similar products or services than yours? 
  • Do they they have their own marketing and communication strategies?
  • Do they evaluate their sales number on a regular basis?

If the answers are mostly no, then you should reinforce training or product knowledge quiz as a way to earn points to make them understand your products better.

5. Setting objectives for your channel program

To ensure the success your loyalty program, your objectives must be clear. Those should be SMART objectives (Specific, Measurable, Attainable, Relevant, Time-bound).

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You can also consider what KPIs to be highlighted to provide better measurement of your program' goals. For example:

  • Registrations rate: The new partners who join your distribution chain. They are important to generate new revenue sources, especially for the breadth goal mindset.
  • Channel partner lifetime value; how to measure it?
    Channel partner lifetime value = Average order value x number of iterations per year x average retention time (years)
  • Channel retention rate: The percentage of your channel partners count. The formula to measure it would be:
    Loyalty Program for Channel Partners (2)
  • Channel partner redemption rate: The redemption rate is calculated as follows: Redemption rate = Number of coupons redeemed / Number of coupons issued. The data will provide a comprehensive picture of how relevant the program to your partner is.
  • Repeat purchase rate: This metric will be essential to let you know the consumers’ loyalty level. You can also estimate your sales volume. This metric is calculated as follows:
    Repeat purchasing rate = Number of channel partners who have shopped more than once / Total Number of channel partners
  • Net promoter score: This metric calculates your clients’ experience when dealing with your company. You have to develop some key questions using a 0-10 scale. Ask your partners with those questions and when you have the responses, you can classify them to the following groups:
    • Promoters (score 9-10): Partners who are extremely likely to recommend your products.
    • Passives (score 7-8): Partners who are satisfied, but they’re not going to recommend your products.
    • Detractors (score 0-6): Unhappy partners who may hurt your company’s reputation.

6. Choose the best loyalty platform

Working with a loyalty platform is essential, especially if you have mid to large enterprise with thousands partners across the country. With the best loyalty platform like TADA, you will have plenty resources to build a success loyalty program for your channels.

TADA has helped many brands to motivate and reward their distributors by bridging the gaps between the manufacturers sales network and other entities across their distribution channel, and also with dealers/stockists/wholesalers which buy non-competing products, store and resell them to the retailers.

Not only that, TADA Channel Incentive Program also assists retailers which sell relatively small quantities of products to retain their partners and end customers.

7. Maintain constant good communication with partners

Communication is an important component of any channel loyalty program. Our suggestions are as follows:

  • Create a unified and proactive communication strategy; what messages do you want to communicate to your partners and how often the communication take place.
  • Segment your partners; you can tailor your communication based on your partner segmentation to make your message more relevant.
  • Direct communication; It is also important to have communication directly or via online, in order to build a stronger relationship.


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Recognizing the efforts of distributors and vendors is beneficial move, as everyone wants to know that their contributions are valued for your success.

The right incentive program can give significant benefits for your channel partners and your business as well. Thus, the company must implementing loyalty program with a long-term mindset to keep your channel partners remain engaged and consistent in its sales performance.

TADA can be a one-stop solution you who are still confused about how to reward the distributors, employees and customers. With an integrated platform and wide range of reward selections, we can help you create the most suitable incentive program for your business. Request your free demo now.

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