Why one size fits all Channel Incentives Design fails? How I used Gray's BAS/BIS behavioral traits help in designing a multi-pronged Channel Partner Incentives program.
When designing channel incentives, I always keep in mind that at the end of the day I am dealing with a human being. Incentive design, therefore, must be aimed at both the rational and emotional side of the account manager or channel partner.
Neuro-scientific and other studies have for some time now established that human beings are swayed by BOTH rational and emotional rewards. In 1970, Jeffrey Alan Gray, a behavioral psychologist, created the BAS and BIS system of behavioral traits. BAS is the Behavioral Approach System and BIS is the Behavioral Inhibition System. Someone with a BAS prefers to acquire more gains so they can be rewarded further. They play to reach for more and want to get rewarded for getting more. They embrace the risk-reward paradigm. On the other hand the BIS folks tend to want to stay put at a certain level and have a fear of losing their status. They fear being downgraded to a lower status level by not meeting their targets.
Taking the same channel incentive design approach for both BAS and BIS behavioral channel partners or account managers therefore is a sub-optimal design. When I designed Channel Incentives for a large Value Added Reseller, I deployed this understanding to good effect. When I started out, I had designed only one channel incentive of paying an additional SPIFF based on volume or revenue targets achieved. When we asked for feedback from the partner, we found that 60% of the partner's reps were not motivated. We researched more and found that not all reps were motivated by reaching for more. That is only some reps exhibited the BAS behavior. Other reps had voiced confidence in their ability to retain an account more and a less behavioral trait toward winning new accounts for volume bonuses. That is, they exhibited more of a BIS behavior.
With the above research in hand I, therefore, designed a second incentive called churn bonus aimed at reps who prioritized keeping the account churn low. After a pilot roll out, we found that 80% of the partner's reps now were motivated and were clear in their incentives design and targets to be achieved to win.
By rolling out both a volume/revenue target bonus aimed at the BAS reps and a Churn/Base Revenue retention bonus for the BIS reps, we found that the reps were selling to set behaviors that not only maximized our business targets for the partner but also the channel partner's targets for their reps.
Neuro-scientific and other studies have for some time now established that human beings are swayed by BOTH rational and emotional rewards. In 1970, Jeffrey Alan Gray, a behavioral psychologist, created the BAS and BIS system of behavioral traits. BAS is the Behavioral Approach System and BIS is the Behavioral Inhibition System. Someone with a BAS prefers to acquire more gains so they can be rewarded further. They play to reach for more and want to get rewarded for getting more. They embrace the risk-reward paradigm. On the other hand the BIS folks tend to want to stay put at a certain level and have a fear of losing their status. They fear being downgraded to a lower status level by not meeting their targets.
Taking the same channel incentive design approach for both BAS and BIS behavioral channel partners or account managers therefore is a sub-optimal design. When I designed Channel Incentives for a large Value Added Reseller, I deployed this understanding to good effect. When I started out, I had designed only one channel incentive of paying an additional SPIFF based on volume or revenue targets achieved. When we asked for feedback from the partner, we found that 60% of the partner's reps were not motivated. We researched more and found that not all reps were motivated by reaching for more. That is only some reps exhibited the BAS behavior. Other reps had voiced confidence in their ability to retain an account more and a less behavioral trait toward winning new accounts for volume bonuses. That is, they exhibited more of a BIS behavior.
With the above research in hand I, therefore, designed a second incentive called churn bonus aimed at reps who prioritized keeping the account churn low. After a pilot roll out, we found that 80% of the partner's reps now were motivated and were clear in their incentives design and targets to be achieved to win.
By rolling out both a volume/revenue target bonus aimed at the BAS reps and a Churn/Base Revenue retention bonus for the BIS reps, we found that the reps were selling to set behaviors that not only maximized our business targets for the partner but also the channel partner's targets for their reps.
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