Why Incentives Fail

Technology vendors devise sophisticated back-end rewards but often trip over common stumbling blocks.
By T.C. Doyle
According to research by Channelnomics, 85% of technology vendors admit that they’re challenged to get partners to achieve or exceed sales goals. One key reason? They struggle to create incentives that positively influence partner behavior without draining financial resources or creating unintended consequences.
The challenge is a significant one given that one in three vendors believes creating incentives to drive new business is a top investment priority, according to findings from the 2023 Channelnomics Channel Forecast study. Our research also finds that back-end incentives result in an 11% to 15% increase in partner sales, on average, according to vendors.
For all their ability to drive revenue, incentives are controversial tools among channel managers. As noted in our...