PRM Best Practice: Motivation & Incentivization


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Sales people sell for many reasons; their innate competitiveness, their desire to be the best, a need to gain approval from their management and peers and their appetite for career advancement all play a part. But by far the greatest driver of sales activity is financial compensation and benefits. Hence when a vendor employs a direct sales force, motivation is a relatively straightforward affair:.

  • Pay a competitive salary
  • Pay attractive rates of commission on sales
  • Offer a compelling package of benefits to the sales person and their family

But there are also several other less tangible sources of motivation:

  • Provide them with desirable high quality products that offer competitive benefits
  • Generate demand and channel it to them in the form of sales leads
  • Own a strong brand behind which they can feel some sense of pride to unite or at least form a positive personal attachment
  • Provide them with the sales tools and resources necessary for them to do their job ? Minimize bureaucracy and red tape in order to be an easy company in which to operate
  • Celebrate and reward success
  • Be seen to reward performers and punish persistent failures
  • Be prepared to offer additional incentives when the business requires its sales people to go the extra mile

There are, of course many more but these are common to most vendors. What is also common is that direct sales people have a contractual obligation to sell on your behalf and yours alone. They are also obliged to meet your performance targets consistently or else put their job at risk. What is more, you manage them, you direct their actions and therefore their performance is itself a direct result of the effectiveness of your own management.

But can these principles be applied to the motivation of an indirect channel where none of these latter conditions apply? Well it is certainly the case that unless you are a market leader, channel management by coercion does not work. And if you are a market leader, such coercion can only apply to the partner?s business – not their individual sales people. For example, you may penalize a partner?s business by offering less discount and therefore less margin should they fail to meet your accreditation criteria. But this penalty may not be felt by the individual sales person at all and if it is, faced with weaker margins and less competitive pricing, the sales person will often sell a more attractive competitive product instead.

Hence, channel sales people must be motivated and incentivized to sell your products especially when, as is most often the case, competitive products are available for them to sell. It goes without saying that partner sales people are just as motivated by money as your own but you have little or no influence over what they are paid or how they are compensated. Interestingly however, if we review the list of less tangible motivators above, we can see a direct correlation between the needs of direct and indirect sales people from the vendor. It is through addressing these that you will have more success in winning over your channel sales people.

Next time we’ll look at ways of ensuring you become vendor of choice.

Republished with author's permission from original post.

Mike Morgan
Mike has over 20 years of ICT, OA and CE channel sales and marketing management experience and is responsible for Relayware's global go-to-market strategy as well as the sales and marketing functions while overseeing the company's operations worldwide. Mike is recognized as one of the industry's leading experts in indirect go-to-market strategy best practice.


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