How Strategy Can Help Make The Most Of B2B Channel Incentives


Channel Partner, Solution,

Jim Sullivan (marketing consultant) suggested in B2B Channel Marketer Report, that a well-executed strategy can greatly enhance the effectiveness of your B2B channel incentives program.

Indeed, the success of a B2B channel incentives program can be achieved by considering how to create and leverage an effective strategy as well as getting to know each channel partner.

What is strategy about?

To assess and shape your company’s strategy adequately, Michael Porter, a professor at the Harvard Business School, developed a framework of so-called forces that enable a deeper understanding of the macro environment and how it influences the microenvironment.

The forces include the following:

  • Competitive rivalry: Scrutinises the degree of competition.
  • Power of suppliers: Considers the power balance between buyers and suppliers.
  • Power of buyers: Looks at the ratio between buyers and sellers.
  • Threat of new entrant: Analyses the relative ease of entry to the market.
  • Threat of substitutes: Examines how many similar or same products there are in the industry. 

Applying Porter’s concept to your own operations will enable you to understand your position and how to influence it within the big picture. Moreover, being clear on your strategy can aid in the strengthening of brand loyalty overall.

Knowing your channel partners

To be able to structure a high-value strategy, building good relationships with channel partners is important and helpful. Making the most of this bond will naturally tie in with your strategy, but it requires consideration of certain factors.

Before commencing a relationship and determining what activities should be undertaken, you need to have a specific vision as to what you can offer your partners. Management consultancy agency SME Strategy emphasises that asking what your long-term vision is will help you achieve it much faster than going in without a specific goal. 

Once you know what the end-game is, gaining as much information on your channel partners’ businesses as possible will allow you to have a better understanding of how they determine success. Here, Porter’s framework starts to come in, as you can assess the relative competitive environment of your channel partners and analyse the level of commitment needed to enter the market as a new player.

The Power of Suppliers & Buyers

At this point, analysing the relative power of suppliers and buyers in relation to your channel partner will give you, yet again, a deeper understanding of the specific industry drivers, thus allowing you to tailor your program to their exact needs. The Loyalty Guide (TLG) suggests identifying who has the power to dictate price and product supply at what point in the supply chain.

According to both Mr Sullivan and TLG, once there’s an understanding of how success is defined for both you and your channel partners, establishing a comprehensive action plan together is key. Go as in-depth as possible, asking questions of who is in charge of what, when and where, as well as setting priorities of what can add value to the venture.

Regarding the flow of inventory planning and control, collaboratively setting expectations as to the turnover rate and communication channels can further help reach desired targets more effectively.

How strategy can help you make the most of channel incentives?

Executing a great strategy is as important as creating it.

Things to look at

When creating a successful incentive program, you should always have the end-to-end supply chain in mind. To do well, Sullivan suggests to do the following:

  • Have a set goal beforehand: Focus on building objectives that are specific, measurable, attainable, realistic, timely (SMART)
  • Execute your strategy: Lay out a plan for accountability, feedback and progress reviews to stick to your strategic goals.
  • Align your objectives: Prioritise making your channel partner’s goals sync with yours to ensure you are working for the same vision.

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