If you’re a technopreneur or a marketer in the booming IT industry, you know the importance of distribution channels and influencers in the sector. But did you know that indirect sales channels massively outweigh direct sales channels when it comes to revenue and growth?

A study by Forrester revealed that indirect partner channels are accounting for almost two-thirds of total revenue in the IT sector. In monetary terms, that’s close to USD 2.26 trillion!

If you’re using traditional incentives and reward programs, you must rethink your strategies as soon as possible and adopt a multipronged reward program. This blog discusses nine types of channel incentive programs that are highly effective in the IT sector.

9 Types of Channels Incentive Programs with Examples

Here is a list of 9 types of channel incentive programs that can help you create a meaningful partner strategy.

1. Value-added reseller incentives

In the IT sector, value-added resellers play an extremely crucial role. They add additional features or services to hardware and software products to enhance their utility.

A recent study found that value-added reseller incentives can enhance a company’s total sales volume by six to nine percent. Many IT companies and software creators use value-added reseller incentives to widen their reach, increase their market share and sales, and improve profit margins.

Some businesses also partner with third-party companies to remotely control their IT infrastructure and provide them with value-added reseller incentives. An excellent example of value-added reseller incentives in the IT sector is the incentives Cisco provides to value-added resellers.

2. Sales performance incentive funds

Sales performance incentive funds can work wonders in fulfilling specific goals such as increasing sales volume, selling certain IT products, as well as driving short-term spurts during sales slowdowns or off-season. The main benefits of this type of incentive are IT companies can increase their particular goals for a certain time and pass on the benefits to their channel partners and influencers.

An excellent example of sales performance incentive funds in the IT sector is the Vonage Channel incentive Program, which enables its channel partners and influencers to earn significant rewards based on the number of deals and the extent of the contract. At LoyaltyXpert, we have helped many IT firms to pay sales performance incentive funds by using accurate sales and performance data.

3. Activity-based incentives

Activity-based incentives, such as loyalty points and rewards provided to take part in surveys, play a game, share a post, attend webinars, and organize demo sessions. These are extremely useful to reinforce loyalty and work extremely effectively in the IT sector. Even though activity-based incentives don’t reward channel partners and influencers based on specific milestones, they often result in higher sales and desired outcomes. Almost all leading IT behemoths such as Google as well as many startups leverage these incentives to reach a higher number of people.

4. Enablement and training incentives

This type of incentive is extremely necessary for the IT industry as it trains channel partners and influencers about the technology. When channel partners and influencers are adequately trained, they know how the technology works, explain it to others better, and market the products much more effectively.

By imparting necessary training to their channel partners, IT companies can reduce their support costs. A great example of enablement and training incentives is HP’s Blue Carpet incentive program. It awards influencers and individual partners with digital gems after they complete different training programs. It also rewards the top ten performers with trips to exotic destinations.

5. Cross-selling incentives

Some channel partners or influencers are extremely skillful at selling complementary or related IT products to their customers or followers. That’s known as cross-selling or upselling. When they manage to do that, they should be suitably rewarded. Many leading IT firms are implementing cross-selling programs to motivate their partners to sell complementary or superior products.

6. Rebates 

Rebates are designed to enhance demand. In the IT industry, rebates are based on volumes. When your channel partners and influencers sell a specific volume the incentives they receive are a percentage of their sales, which they can pass on to their customers. The major benefits of channel rebate incentives are that they motivate channel sales partners to sell more products and build a strong customer base. AWS’s partner program is a good example of a rebate program.

7. Referrals

Channel referral incentives are extremely crucial for IT firms. By using this type of incentive, tech companies leverage the clout and referral networks of their partners, influencers, and existing customers. Almost all major companies use referral marketing due to its many advantages.

As per the latest stats, referral marketing generates up to five times higher conversion rates compared to any other channels. The lifetime value of referred customers is 16 percent more than non-referred ones. Referral leads have 30 percent higher conversion rates than leads compared to any other channels.

8. Solution development funds

IT firms rely on this type of incentive if their channel partners or influencers need to demonstrate their software or solutions. This is extremely effective for complex products as well as for solutions that have complex and lengthy development and sales cycle. Solution development funds are extremely useful to support proofs-of-concept, demonstrations, and product launches.

9. Loyalty incentives

This type of incentive is more of a token of gratitude than a reward. Many IT brands provide this incentive to their partners and influencers for their unwavering loyalty and dedication. By doing so, they make their partners and influencers feel special and valued. An attractive loyalty program also acts as a magnet to bring in new partners. Many tech companies are investing in loyalty incentives to retain their most loyal and valuable partners.

All in all,

As the global IT sector grows from strength to strength, tech companies must leverage the right incentive programs to enhance revenues, profit margins, as well as brand value. Traditional programs are no longer effective and IT firms need to use a multipronged approach to reward their partners and influencers and keep them loyal.

At LoyaltyXpert, we have created highly successful channel loyalty programs, brand loyalty programs, and influencer loyalty programs for all sizes of tech companies. If you’re looking to run tailored and effective reward programs, Contact us today.