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Improved key partner performance with new incentive programs

A large software company needed to improve its return, management, and reporting around its partner incentives and contra-revenue programs. 

Channel incentives are business investments that aim to drive partner behavior. True incentives are always performance-based and aim to improve the mix, reach, or yield of your partner base. Here's how our client, a large technology company effectively used incentives to improve partner performance. 

The Challenge

  • No centralized management of rebates and incentives as all were run at the local sales region level
  • Inability to benchmark performance and cost structure across different incentives and geographies
  • Wildly different partner experiences across different geographies with high complexity and inconsistency
  • No clear accountability and decision-making authority across different business divisions
  • Fragmented and incomplete reporting frustrated senior executive team
  • Unclear return on investment for a very large budget spend

The Solution

  • Conducted deep ROI analysis on each incentive program across all geographic areas
  • Set partner incentive guidelines and directives for each geographic area to follow that allowed local execution with centralized governance.
  • Created a worldwide incentive program management framework with clear decision-making authority and standardized performance reporting
  • Conducted performance modeling and goal setting criteria to allow tighter alignment to business objectives

The Result

  • Stronger centralized governance while preserving field flexibility within defined parameters
  • Improved incentive return by discontinuing low-yield program and reinvesting in others
  • Improved key partner performance and satisfaction with Microsoft
  • Incentives became outcomes-based rather than activity-based
  • Better alignment between field behavior to strategic imperatives and key performance drivers
  • Senior executives regained confidence in the return of the partner incentive programs.