Loyalty Register glossary
Channel partner program
An incentive program a vendor runs for the businesses that sell its products, such as resellers, distributors, dealers and installers.
A channel partner program is an incentive program that a manufacturer or vendor runs for the businesses that sell its products: resellers, distributors, dealers, installers and their sales staff. It rewards partners for sales and for activities that support future sales, such as training, certifications and registering deals.
Updated · By Loyalty Register Editorial TeamRelated terms
What does a channel partner program reward?
Sales volume or growth, often measured against a target. Activities such as product training, certifications, deal registration, joint marketing campaigns and submitting sell-out data. Rewards include rebates, points redeemable for merchandise or travel, market development funds, spiffs for individual salespeople, better pricing, and partner tiers with benefits such as lead sharing and dedicated support.
How is it different from consumer loyalty?
Partners are businesses that compare your incentive with their margin and with what competing vendors offer. They choose which brand to recommend, so the program competes for their attention and sales effort. Claims and payouts need validation, using invoices, serial numbers or point-of-sale data. And there are two audiences, the partner company and its individual salespeople, whose interests can differ.
How do you measure whether it works?
Start with the share of enrolled partners who are active, meaning they completed a qualifying sale or activity in the period. In a hypothetical program with 2,000 enrolled partners and 400 active in a year, the active rate is 20%; the other 1,600 are a mailing list rather than a channel. Also track incremental sales against a baseline, partner retention and cost per incremental dollar of revenue. Look at the distribution too: if a handful of large partners earn most of the rewards, the program may be paying for sales it would have had anyway.
What should you watch?
Claim fraud and leakage, such as duplicate or inflated claims. Accounting timing: points or rebates earned on invoice, before the partner pays, create a liability that has to be funded. Channel conflict, when partner incentives clash with direct sales or with other partners. And partners’ own rules on incentives paid to their employees, which some restrict. Keep the rules simple enough that a busy salesperson can see what to do to earn.