Jun 02, 2021
As partner-challenges evolve, it is clear that brands need to tailor individualised relationships with their partners through honest and transparent communication.
The COVID-19 pandemic has disrupted equilibrium across business functions. Brands are compelled to redefine channel business priorities even as they continue to experience uncertainty on demand and supply and pivoting focus to value-driven business growth.
As partner challenges evolve, it is clear that brands need to tailor individualised relationships with their partners through honest and transparent communication. This requires shifting to a partner-centric channel loyalty program that is based on a thorough understanding of human behaviour– one that helps stay connected with channel partners while building long-term business value.
So, how can brands build a successful channel loyalty framework that helps win partner trust and develop advocacy? The key is to develop a deeper understanding of partner behaviour while offering a compassionate, empathetic, and holistic experience tailored to each individual channel partner.
Here are four ways to build a partner-centric loyalty program by leveraging behavioural economics principles for success in the post-COVID era:
The secret sauce to improving channel partner engagement is making them market-ready. Gartner's study says 75% of channel partners feel the need for assistance in marketing the products they sell. And the science of behavioural economics, according to Dr. Ran Kivetz and Dr. Itamar Simonson, says such initiatives help channel partners identify with the concept of idiosyncratic fit. Idiosyncratic fit is the feeling or belief they have a unique advantage over others- in achieving goals, closing deals, or completing a program.
Provide them with the right product know-how, training, and marketing support so that they can amp up the product sales. They feel confident of making a sale, talking to end consumers with the right knowledge about the benefits, and able to build relationships resulting in upselling or cross-sell opportunities. All this translates into a unique advantage for the channel partners and builds a greater association with your brand’s channel loyalty program. This motivates them to stay ahead of their game, encouraging them to sell more with ease and get closer to their dream rewards.
So, each time you want to show the right way forward, motivate them with a unique advantage- one that can help them draw a personalised plan to succeed with sales over others. This helps channel partners identify the differentiators to beat the competition. And in the process, they also understand market trends and customer demands better.
With Covid-19 hampering face-to-face channel partner engagement, ensuring partner loyalty is not easy. It is imperative for brands to accelerate the pace of digital innovation which boosts partner engagement in this new world order.
You can have the best of digital infrastructure available to enable your channel partner engagement, but at the end of day, it is all about human behaviour, how you influence decision making and how you nudge them to maximise the return of your digital transformation investments.
According to Richard Thaler, Nobel prize winner and an economist, a little nudge or a small prompt can help you drive a desired outcome or change behaviour. Virtual events, digital sales tools, communication nudges leveraging digital channels, virtual training, virtual product launches, social and digital contests, promotions, and hedonic rewards are examples of how brands are nudging their channel partners to adapt to digital infrastructure.
As engagement is a two-way street, providing simple and personalised digital sales dashboards can help partners to keep up with their goals and improve the overall sales performance for the brand. Another way how small nudges or prompts can help brands change channel partners' behaviour for positive outcomes.
Human beings are social creatures, and our choices are influenced by observing the behaviour of others around us. The concept of social proof or influence, another behavioural economics principle, is so relevant in today’s digital era.
Developing channel partner digital communities is a sure-shot way for the brands to leverage the principle of social proof to encourage channel partners to make positive choices. This ultimately creates a sense of tribe, leading to a feeling of community belonging while improving brand loyalty. Integrating game mechanics, like leader boards, badges, missions, recognition, and rewards, with digital communities can further enhance the engagement by bringing in a sense of healthy competition.
What drives motivation and happiness? Are monetary incentives the rea motivator or just a satisfier and a short-term boost? McKinsey’s study states that non-financial incentives are more effective motivators than financial incentives. As per our own researchers, most of the channel partners prefer cash rewards to stay with a brand, but non-cash rewards are the ones that ultimately prevent them from jumping the ship. The principle of preference reversal explains this; people say one thing but want something else. Identify the behaviour you want to reward, integrate the same behaviours with your channel loyalty program and keep them motivated in the right manner. For instance, concert tickets or luxury merchandise may be offered to partners for undergoing product training, making sales, or increasing brand awareness. This will help them build a certain status amongst their peers and most importantly they feel motivated to achieve more resulting in a larger dopamine effect amongst the channel partners community.
Since most businesses have been subjected to an array of uncertainties within the ecosystem, channel partner loyalty is essential to increasing the share of channel sales. This means reimagining value and care in business relationships through a loyalty and incentive program that is based on behavioural economics. This makes partners feel they matter to your brand.