perspective Driving Effective Channel Incentive Programs - Mothi Raj Abstract Sales channel management is a critical part of businesses across industries. Those with robust sales channel management programs are known to have an edge over others that do not have the same rigor in managing their sales channels. This paper aims at bringing forth the challenges that businesses face in managing sales channels, chalks out possible solutions that encompass service and technology levers to address these challenges, and discusses the potential benefits of establishing an effective sales channel management program.
Channel incentive programs to spur sales Enhancing the efficiency of sales is vital to businesses as they contribute to the topline. And businesses today require channel incentive programs to motivate their sales force and thus drive sales. These programs, if managed well, can be the key driver of success. The channel incentive program lifecycle Research Approve Earn/accrue Design Register deal Pay Launch Sell Access Onboard Enroll The eleven activities within the channel incentive program lifecycle can be further categorized into decision, action, and data-oriented activities. Decision - Oriented Research Design Launch Action - Oriented Sell Approve Earn / accrue Pay Data - Oriented On boarding Enrolling Register deal Assess Channel management activities
Decision-oriented activities are strategic in nature, require in-house focus and attention, and involvement of client business teams. They involve understanding market situation and business decisions, investment, planning, design, launch of programs, and more. Action-oriented activities are typically judgmental in nature and require both inhouse and third-party involvement. Some activities that require physical intervention also involve in-depth assessment of relocating the program and re-engineering of processes. Data-oriented activities are transactional in nature and data-centric. They can be performed by external parties, are rulebased and require stakeholders to follow set guidelines. Therefore, these activities do not require decision-making capabilities. Most organizations today are focused on making sales channel management programs effective to reduce the effort spent by account management (sales) teams on non-core activities. In our experience, we have found that sales teams spend 20-40% of their time on non-core activities (validations, trainings, program awareness, claims, etc.) diluting their focus on their core activity - product sales. 1 Challenges aplenty Based on stakeholder involvement, channel incentive programs face challenges that can be broadly classified into business and partner categories: Business challenges Collecting data from multiple sources when there is ineffective data management Communicating with the right stakeholders on-time Adopting to changing customer needs (dynamic market situations) Allocating appropriate budgets for individual programs at the right time Investing in the right programs Reducing delays in decision making and increasing focus on the program, caused by organizational changes Spending excess and unnecessary time on non-core work Ensuring that sales teams are motivated and not frustrated by untimely and inaccurate incentive pay outs Identifying fraudulent practices Interpreting the voice of customers correctly Partner challenges Inconsistent / improper and late communication about the event / promotion Low visibility on changes in the product catalogue / features Dependency on account managers for administrative support Delay in payments Striving to achieve higher partner satisfaction levels Lack of motivation for partners to perform Implementing multiple events / programs simultaneously Lack of program awareness amongst channel partners Source: 1 Infosys internal study
Recommended approach To address these challenges, enterprises must form a dedicated channel incentive team that directly engages with partners, communicates with the right stakeholders, and increases awareness about programs and events. Team efforts must be supplemented with innovative tools that reduce work volumes, increase processing speed, and ensure accurate computation. Dedicated incentive program support team The team must provide proactive and reactive support at the right time to partners to enable them to contribute effectively and maximize sales. This results in enhanced channel partner experience, stimulating loyalty. The following diagram describes activities under proactive and reactive support: Incentive program support Proactive support Reactive support Helpdesk support (outbound call support) Statement distribution / contract notification Training support Program awareness / mass communication Registration Query management Validations / reconciliation Calculations Reporting Onboarding support Technology solutions that supplement teams Incentive program support Typically, decision-oriented and action-oriented activities are managed by in-house resources while data-based / transactional activities are entrusted to external partners. Technology solutions/ tools can optimize activities in query management, calculation, issue resolution, and reporting and analytics. Here is how tools address some of the challenges of channel incentive programs. Activities Challenges Solution Query management Frequent questions increase the requirement of back-office support operations / cost Create A knowledge bank Self-service portal Virtual partner support Calculations Unable to provide timely and accurate payments to partners Unable to process increasing query volumes for claims process Develop a formula-based tool that ensures minimal human intervention and accurate computation Issue resolution Reporting and analytics Multiple touch points - repeated communication with partners for resolution of issues Poor reporting slows decision making process Integrate front-end applications with knowledge base to give a 360 0 view of partner s issues. This speeds up resolution cycle time and increases first call resolution percentage Consolidate and collate data from multiple sources and create intelligence reporting as requested by the organization
Strong outcomes The following diagram highlights the potential outcomes of our approach and use of appropriate technology: Improved adoption rates Motivated sales force Increased Revenues Cost Reduce Cost to Serve Consolidation and Standardization of Processes Standardization Partner / Customer Experience Enhance Customer Experience Improved CSAT scores Voice of Customer Process Excellence Identification of Automations Process enhancements / Reengineering Potential benefits
How a leading networking and telecommunication equipment manufacturer is realizing strong outcomes with a robust channel management program The client requirement / situation The client wanted to institutionalize a channel management program in partnership with a third-party service provider to: Simplify and enhance communication with partners and internal channels Accelerate the adoption of sales programs that would eventually result in building the next-generation partner model Our approach We began by creating a centralized shared service organization that supported APAC channel operations. In its purview were around 13 country groups with support in eight languages through e-mail and call, utilizing supplier premises with client extranet connection. A dedicated team was provided for each country. Team members were made points of contact and provided telephonic support to partners. This was supplemented with a dedicated webpage. This ensured seamless support. Structured and periodic reviews of business results with key partners helped drive program adoption and impacted the sales team positively. The outcomes Our approach helped: Save 40% of the account manager s time Improve profitability and efficiency through a consultative engagement approach with partners Drive program adoption, awareness, guidance support related to business programs and channels through proactive follow-ups with partners Build strong relationships and improve partner/user experience Save time and cost through technology interventions and automation Conclusion When mismanaged, incentive program has a catastrophic impact. But, when done right, it can increase mindshare and sales, and drive partner loyalty. What needs to be kept in mind is that dynamic markets mean businesses need to respond quickly to changing market needs. Therefore, time-to-market is essential for effective implementation and execution of channel incentive programs. And, remember the four tenets of a successful channel incentive program are: 1. Consolidated and standardized processes 2. Use of analytics to better understand products, programs and market needs 3. Process automation to eliminate redundant and manual activities 4. Consistent and timely communication with channel partners
About the Author Mothi Raj Consultant, Solution Design, Sales & Fulfillment Practice Infosys BPO Mothi Raj has over 12 years of experience spanning customer service, operations management, training, center of excellence and solution design. In his current role as a solution design consultant, he is responsible for designing and customizing sales & fulfillment solutions. He holds a bachelor s degree in business management and a post graduate diploma in business administration. About Infosys Infosys is a global leader in consulting, technology and outsourcing solutions. We enable clients, in more than 30 countries, to stay a step ahead of emerging business trends and outperform the competition. We help them transform and thrive in a changing world by co-creating breakthrough solutions that combine strategic insights and execution excellence. Visit www.infosys.com to see how Infosys (NYSE: INFY), with $8.25B in annual revenues and 160,000+ employees, is Building Tomorrow's Enterprise today. Infosys BPO, the business process management subsidiary of Infosys, provides a broad range of enterprise and industry-specific services. We deliver transformational benefits to clients through our proprietary Process Progression Model TM (PPM). These benefits include cost reduction, ongoing productivity improvements and process reengineering. For more information, contact infosysbpo@infosys.com www.infosysbpo.com 2014 Infosys Limited, Bangalore, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document. Except as expressly permitted, neither this documentation nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing, photocopying, recording or otherwise, without the prior permission of Infosys Limited and/ or any named intellectual property rights holders under this document.