360insights 2021 Predictions for Channel Incentives Automation
By Claudio Ayub, SVP, TMT Practice at 360insights
The pandemic has caused massive disruptions in 2020, presenting the global business community with a number of challenges never experienced at this scale, from sales declines, supply chain disruptions and budget cuts, to a fully remote workforce.
That being said, channel marketing budgets are holding fast, according to recent research conducted by The 2112 Group. About six in 10 vendors are either increasing marketing spending or maintaining their current budgets in spite of the COVID-19 disruptions.
“2021 will be the year that every company, not just the 15% of firms that were already digitally savvy, doubles down on technology-fueled experiences, operations, products and ecosystems,” according to market research company Forrester.
Improving the partner experience is the key theme of 2021 predictions. Channel partners often cite user experience as one of the most critical aspects of their relationships with brands and vendors. Vendors that invest the time and resources needed to facilitate the partner experience will gain a crucial advantage over competitors. So much so, that channel organizations are now including a new role within their own groups that directly addresses partner experience.
Based on the overall theme of improving partner experience, here are some of the biggest predictions for 2021:
Traditional channel tiers will be replaced by point-based channel programs
Historically channel ecosystems were characterized by traditional relationships, including partnerships with long-standing suppliers, vendors and customers organized around a metal tier structure. Think silver, gold and platinum. With these metal tier structures came well-established operating protocols that fostered a sense of predictability and consistency. When transformation was paced linearly, these ecosystems were fairly effective, but as the pandemic accelerated digital transformation, traditional notions of a channel ecosystem were redefined and flipped on their head in many cases.
Channel ecosystems are currently in a state of flux due to the disruptive nature of digital delivery methods. There are also a diminishing number of channel partners because of the failure of many to adapt to digital transformation. Partners struggle with digital transformation, don’t truly understand how to engage the new buyer and lack social selling skills and resources.
The framework for the new digital channel ecosystem needs to be dynamic and agile rather than rigid and templatized. The requirements gap might be significant for brands that are used to linear change and are planning for exponential change. But brands that succeed at engaging partners more effectively through digital strategies will boost long-lasting levels of partner loyalty.
Hyper-personalization at the partner level
Partner engagement is predicted to go digital through one-on-one personalization and delivering a consumer-like partner experience. In a business-to-business world, every vendor, reseller, partner and customer is an individual with their own needs and expectations for products and services they choose to buy and brands they choose to work with. Personalization leads to more meaningful interactions, improved brand loyalty and more sustainable growth.
Personalization is the act of delivering the right message to the right person at the right time in a scalable way across a diverse range of channels, including text, mobile, video, telephone, email and direct mail. To truly achieve personalization, platforms need the full context of each user, including their geographic location, eligibility, go-to market, localization and preferred method of engagement. This context allows brands to deliver meaningful conversations that keep partners engaged.
Hyper-personalization at the partner level will use a mix of modern one-on-one engagement tactics, including mobile, social and insights, as well as new channel technologies to align partners’ sales cycles to buyers’ journeys, encourage partner ecosystem interaction and digitize everything. All of these tactics are part of offering a deeply personal, deeply engaging and deeply gratifying partner experience.
Channel Incentives Automation (IA) technology transforms incentive program design and Channel Incentive Management (CIM)
2021 will be the year of automation and artificial intelligence across all industries but especially in channel sales and marketing. Incentives automation with AI-based technology will revolutionize the way that brands deploy the right mix, level and cadence of incentives that boost profit and revenue from the channel.
According to the 2112 Group Report, about 51% of channel professionals rate marketing development funds (MDF) as the most effective means of influencing partner behavior and performance. That perception is certainly not changing in the midst of COVID-19 disruptions. There will likely continue to be a shift from events and certification to using those funds to initiate long-term behavioral modification campaigns around sales and marketing enablement, as well as short-term digital marketing and training support.
Artificial intelligence and machine learning technology will play a huge role in automating and simplifying the whole incentives management process, including automating MDF campaign funding requests approval, or building rebates scenarios at the partner, region and country levels.
Intense channel insight can only be made possible with an incentives automation platform that combines data across multiple engagement and incentive programs or promotions into a comprehensive intuitive dashboard. By compiling all channel incentives data, including programmatic, financial and behavioral data, into a single source of truth, organizations can better understand and predict which engagement tactics and incentive programs are working, thereby targeting spending and allocating budgets where they make the most difference.
Brands will increase their behavior-based engagement and investment in millennials
Millennials will account for 75% of channel staff of 2021, and channel leaders will have to rethink how to motivate and drive the appropriate sales and marketing actions across a broad demographic, with different partner types, on a global scale.
Gamification will become a key tactic next year in an effort to gain mindshare of this important channel demographic. Keep in mind that this is not about digital games. Gamification in the channel is all about driving and rewarding activity and behavior completion. Platforms need to deliver an experience that is visually actionable, empowering partners to see their progress within a program on-demand and allowing for an easy partner experience as wording is reduced by dashboards and more white spaces.
Millennials respond to gamification strategies, since they align with experiences that they’re used to outside of their business life. As another way to improve partner experience, gamification will be a focus this year and beyond.
All in all, the changes and challenges of 2020 have transformed into opportunities in the channel for 2021. Partner experience, driven by the right digital strategies and tools, will help lead us there. We are not going backwards. Channel organizations that embrace the new normal and the path forward will succeed.
There’s more to B2B and Tech Marketing and Sales than meets the eye in 2021 and Beyond! Catch more here where leaders from Ness Digital, TeamViewer, JotForm, Xactly and others weigh in!