How to drive channel incentive program engagement through segmentation

Segmentation is one of the best ways to improve the results of a channel incentive program, but most of the companies we talk to aren’t tackling it effectively. 

Some underestimate the impact of channel partner segmentation in building personalized program experiences that are meaningful to diverse audiences. Others understand its importance but aren’t sure how to add segmentation into their existing programs, so they don’t prioritize it. 

Either way, not optimizing your segmentation strategy leads to missed opportunities and wasted resources.

Let's look at why segmentation matters and how it can improve your channel incentive program.

Understanding why channel partner segmentation matters

Marketing experts know from years of data that segmenting markets is critical for driving engagement and profits. The same is true for channel partner strategies. It can help you reach key roles within the channel and incentivize the right behaviors for each to increase motivation and drive results.  

One problem we often see with channel incentive programs is that they have limited participation—and, in turn, limited results. Perhaps you’re familiar with the 80/20 rule, also called the Pareto Principle. It states that 80% of an output (e.g., a sales incentive program’s results) will be driven by 20% of the input (e.g., top sales performers). This rule holds true with channel incentives. Even when organizations successfully boost revenue through their partner programs, only a select number of partners are contributing to profits. That’s why you need a smarter way to engage and manage partners.

So how do you increase engagement? Through personalization. Partners crave personalized experiences that are meaningful to them.  If you can use segmentation to give them that experience, they’ll achieve more with your program. We’ve seen it happen with our own segmentation strategies we’ve used for clients.

Related: Learn how we used segmentation and multi-audience technology to drive sales for a Fortune 100 insurance company.

Segmentation allows you to:

• Make better use of your resources
• Engage the right partners
• Focus on the partnerships that bring the most value
• Create incentives that fit specific partner groups
• Make your whole program more efficient and profitable
  

4 best practices to segment audiences effectively

To segment effectively, you’ll first need to carefully analyze your partner data and establish your goals for the incentive program. This will help you understand what behaviors you need to incentivize and how you should segment your audiences.

Here are a few ways you can use partner data to create better channel programs:

• Evaluate all available historical sales data to inform decision-making
• Forecast different scenarios using past performance to prepare for future challenges
• Create and model incentive strategies based on new segments to increase engagement
• Optimize incentive structures using data-driven insights to balance budgets and outcomes (e.g., adjusting earning criteria, participant eligibility or reward distribution to maximize ROI)
  

After you have your data and goals established, use these best practices to start creating your segmentation strategy.

1. Treat new and old partners differently

New partners, like dealers or installers, have different needs and goals than longtime ones. Each group needs a unique approach.

2. Re-engage inactive partners

Valuable inactive partners might be willing to come back if you approach them the right way. Be sure to address their needs and why they disengaged in the first place.

3. Target based on markets

Specific markets value different things in incentive programs. Customize your messages and awards so they’re relevant for your partners’ markets.  

4. Make it personal

The data you have on your partners’ roles and markets gives you insight into how to personalize the program. Use it to provide the right resources for their specific needs.

Related: Reconsider your ideal channel partners through program segmentation.

4 advanced tips to get better segmentation results

After working through the best practices, there’s still more you can do to increase the value segmentation brings to your channel incentive program.

1. Layer in firmographic data

This data will allow you to identify the ideal partner criteria for both transacting and non-transacting channels.

2. Add behavioral and engagement characteristics

The better you can understand your partners, the better you can engage them. These characteristics will help you identify leading indicators of success.

3. Track incentive program data against sell out data

You need to know what incentives are driving desired incremental behaviors to maximize your program budget.

4. Identify intrinsic and extrinsic motivators

This is the key to providing meaningful awards. By identifying partners’ motivators, you can decide the best awards and earning opportunities to offer.

Implementing segmentation through an easy-to-use partner portal

Finally, even the best segmentation strategy is only helpful if it’s easy for partners to use. Remove any participation barriers so that partners understand the program and want to engage with it. A good channel partner portal puts all the meaningful information they need in one place, simplifying the process and keeping the program top of mind.

The channel partner program should be customizable by role so busy partners aren’t burdened with materials and communications that don’t pertain to them or their businesses. It should put important product knowledge and relevant certifications right at their fingertips, while also using features like progress-to-goal trackers, wish lists and gamification elements to boost engagement.

By making all the information they need easy to access, you show partners you're committed to their success.

Improving your channel incentive programs

When done right, segmentation gives you valuable insights into your channel incentive program. These insights help you reach the right partners in the right ways, maximizing how they interact with your brand and boosting your returns.

By tailoring incentives to different partner groups, you can:

• Motivate underperforming partners with specific incentives
• Reward top performers in ways they value
• Create tiered incentives that encourage growth for all segments
• Match incentives to the challenges and opportunities in each market
  

Segmentation doesn’t just strengthen your current channel partnerships. It builds a foundation for a more dynamic and profitable partner ecosystem. When partners feel valued and understood, they have higher loyalty to your brand. The more you can tailor your approach to each partner segment, the more successful your incentive program will be—and the bigger returns you’ll see.

Want to implement a channel partner segmentation strategy, but not sure where to start? Let’s talk.