Channel Voices
Channel Voices is The Podcast for Future Channel Leaders, where we learn the ins and outs of partner ecosystems through casual conversations with channel professionals from a variety of industries, partner types and geographies.
Channel Voices
Why Your Partner Incentive Program is Failing and How To Fix It
Ever wondered why some partner incentive programs drive remarkable growth while others barely move the needle? The answer lies not just in the rewards offered, but in the psychological principles that motivate human behavior.
In this thought-provoking conversation with Samer Mihyar, Channel Marketing Leader at Kodak Alaris for EMEA and SEAC regions, we decode the psychology behind truly effective partner incentivisation. Samer reveals why the traditional approach of relying solely on cash or rebates consistently fails to build lasting partner loyalty, and shares the three fundamental principles that successful programs must follow: strategic alignment, engagement beyond sales, and simplicity with transparency.
Drawing from his extensive experience, Samer takes us through the psychological theories that explain partner motivation – from self-determination theory to behavioural economics concepts like loss aversion. He demonstrates how understanding these principles allowed him to transform underperforming partner relationships into collaborations that delivered 20-30% year-over-year growth.
We explore common pitfalls that doom incentive programs from the start, including the one-size-fits-all approach that fails to recognise different partner types have fundamentally different motivations. For smaller partners, cash incentives might work wonders, while enterprise partners may respond better to co-marketing funds or lead sharing opportunities.
Looking to the future, Samer predicts how AI, gamification, and sustainability will reshape partner incentives, potentially allowing for unprecedented personalisation. But his most valuable insight might be his parting wisdom: "Channel success isn't just about sales numbers – it's about relationships, trust, and alignment." This episode provides a masterclass in building incentive programs that drive results while strengthening your most important partner relationships.
Whether you're revamping an existing program or building one from scratch, this episode delivers actionable insights for creating incentives that truly resonate with your partners and deliver measurable business results.
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Hello, welcome and thank you for tuning in to Channel Voices, the podcast for future channel leaders, where we learn the ins and outs of partner ecosystems through casual conversations with channel professionals from a variety of industries, partner types and geographies. My name is Maciek and I'm your host. Samer Mihyar, welcome to Channel Voices!
Samer Mihyar:My name is Samer Mihyar. I've spent my career in channel marketing performing things along the lines of partner enablement, incentive programs, channel growth, etc. Basically helping businesses build strong, mutually beneficial partnerships. Currently, I lead channel marketing at Kodak Alaris for EMEA and SEAC regions. I work with partners across various industries so you've got your government focused partners, financial services and so on and so forth mainly to develop programs that don't just focus to generate short-term sales but rather drive long-term value interest to me, or the more partners I meet, the more I become interested in what really motivates them, particularly in this highly competitive world we live in. And that curiosity, if you like you know, led me to write one of my recent articles on LinkedIn the psychology of incentives. Right, yeah, yeah, it sparked some great conversations online and that's why I'm excited to be here today to go deeper into what makes incentives work, where companies get them wrong and how we can make them better.
Maciej:Fantastic, and that's exactly it, right, it was that article that spurred my interest in getting you on the podcast. You made some very interesting points in there. I'm hoping we can unpack these in today's episode. So, when it comes to incentives, what are the fundamental principles behind partner incentivization and the importance that it has in today's business landscape?
Samer Mihyar:It's a very good question and the importance that it has in today's business landscape. It's a very good question. Traditionally, we've been looking at incentives to achieve sales right, but I think, at its core, any incentivization strategy is about motivating the right behavior. So, again, for so long, the incentives have been about increasing sales, closing deals, et cetera. But the reality or so, again, for so long, incentives have been about increasing sales, closing deals, et cetera, but the reality, or the new truth, if you like, that it's not really just about that. It's about getting partners to engage, invest in your brand and ultimately drive customer success.
Samer Mihyar:Now you gotta keep in mind partners any vendor works with. Nowadays, they deal with 10 to 12 other vendors. Some of them directly compete with you, others don't. I think you got to make sure that you have that enough mind share for partners to focus more with you as a brand. A common mistake that I see, with that a lot of companies or vendors do, is viewing incentives as purely transactional, short-term transactional incentives, that's along the lines of offering discounts or cash rewards without thinking about the long-term impact.
Samer Mihyar:So instead, the most successful programs or at least from my experience all I'm sharing here today is based on my experience in the MANC region so the successful programs follow three key principles, if you like, masha. First, that's alignment with business goals. Every incentive should tie back to a strategic goal. Your strategic goal can be, you know, I want to increase sales, but I think any marketing activity, the ultimate goal is to sell more. I think in many occasions we just look at that last part of the sales cycle Whereas you look at building a relationship with partner. You need to consider the different steps that you have in a sales cycle, right From enablement, prospecting, objection handling, et. All the steps within the sales cycle and how you can make sure that you incentivize to the right objective. So maybe you want more visibility into what the partners are doing in their prospective markets, so your objective would be to increase the registrations, so incentivize based on that. Or your objective would be to increase your registrations, so incentivize based on that. Or your objective could be boosting renewals or breaking into new markets. So the first principle is aligning with business goals. What are you really trying to achieve. The second is what I just touched on, which is engagement beyond. Sales Incentives shouldn't really only focus on closing deals, rewarding partners on pre-sales activities like trainings or certifications, or even marketing related activities like lead generation. These sorts of incentives, they create a stronger foundation for the policy.
Samer Mihyar:As you know, in B2B marketing particularly, you know channel oriented companies, they thrive on trust and relationships with their partners. Right, and creating a strong foundation is absolutely necessary. You just think about it logically. You go to a partner and say, hey, you know what? Here's my product, sell it, I'll give you X. Right, that's not going to do the job. You know, these are intelligent business people that you know. They know how the sales cycle works and you need to be part of that sales cycle.
Samer Mihyar:The third principle, if you like, is simplicity and transparency. I've seen so many programs that just go simply because they're quite complex A lot of manual work. You know partners don't know where they are. So you know, if a partner can't easily understand how they earn rewards, trust me they're not going to engage. Clear program structures and easy tracking tools make a massive, massive difference.
Samer Mihyar:And look, you know, if you look at those three principles, I've seen them. I've seen results coming from all partners. If I look at some of the partners that you know I'd consider as focus partners I worked on programs, you know just to reward partners I worked on programs, you know just to reward on the sales side. Right, sometimes they work, other times they don't. But then when I look deeper into some some of the business that those partners do and we had intelligent business conversations, you know I I did things differently. I started incentivizing on, as I mentioned, pre-sales trainings, post-sales renewals, marketing, and I managed to see 20% to 30% growth year on year with those partners, something that previously they weren't able to do. That and that's simply because they see that the brand or the vendor they're investing with them.
Maciej:Yeah, especially with that simplicity right, if it takes a partner to have a mathematics degree to understand the calculation behind how they're being compensated, you, you've absolutely lost them. Totally agree, it needs to be very easy to understand and especially for them to realize what is it that they need to be doing to achieve, to achieve those right? Absolutely, and it's you know anything with compensation, if you, be it direct or indirect. If it's complicated for a person to understand this, you've lost them.
Samer Mihyar:Absolutely, absolutely. I gotta tell you, tracking is is really important. The reason I say that? Because, just think of it yourself You're participating in a competition, or maybe you're getting points on your credit card that you're looking to redeem towards a vacation with your family or whatever. If you're spending or you know, you're putting effort and you're not able to see your achievement live, that's, that's a big demotivator, right? Yeah, so simplicity and tracking are two very, very, you know, important aspects to to those fundamentals if you like, agreed.
Maciej:You know the article you wrote. It had the word psychology in it, right, what are some of the you know, from your point of view, the psychological theories, maybe that underpin, you know, that effective incentive strategy for, for the partner ecosystem.
Samer Mihyar:Yeah, yeah, you know, I hesitated, you know, and I saw it twice before I put that title. Obviously, you know I'm not an expert, right, but you know, out of interest, you do a bit of reading, right?
Samer Mihyar:And you get to learn a thing or two from here or there. So you know. Just a disclaimer here. I'm not the expert in psychological theories, but from what I read here's what I understand there's something, one theory, called self-determination theory, and that's when your partners, they're motivated by autonomy, competence and related relatedness, which means they're not just interested about money, they want to feel in control, they want to develop expertise, they want to feel valued, right, this is, this is sort of you know your psychological or your, your subconscious, telling you why I exist, or you know how, why is this important? Why am I important? Right, and then you've got behavioral economics, which you know, by the way. You know partners react differently to based on how you, your incentives are structured. Or you know how, how they feel at the point of the announcement, right.
Samer Mihyar:So something like loss aversion. That's when people loo, fear lose, losing something more than they enjoy gaining it. And you know, I I was watching a documentary the other day about, you know, penalties, right, penalties in football. Penalties, right, penalties in football. And numerous studies have been done on the probability of winning. And apparently what the study shows is that prior to starting the penalties, the possibilities are 50-50,. Right, but if you go first. If you shoot first, your probability of winning increases to 60%. Right, and simply because you know you scoring that first shot right as a team puts that.
Samer Mihyar:You know loss aversion in the, in the competitive, competitive system and you take it into. You know your daily, your daily life right. You know when, as a vendor, when you put an incentive and you know you put something really exciting, something that you know say, you know everyone goes on a summer holiday and this is your reward to achieve something. But hey, you know you've got to achieve those sales or those numbers, or do your tasks. You know within the first three months of the year. Right, you do your tasks within the first three months of the year and that limited time incentive can actually push people to act quicker, act faster in fear of losing that opportunity. Another thing that also related to behavioral economics is gamification. It's that inner self that tells you I'm the best.
Maciej:I'm the best, you know I can do better.
Samer Mihyar:The competitiveness yes, the competitiveness, yeah, and people like to engage with those sorts of things where they get more points or they get a status if they achieve a certain target. So, again, just think you know I'm an expert in in psychological theories, but I feel these are quite, these are quite relevant points um that you can consider when you design your next incentive program that's great.
Maciej:And speaking of designing um incentive programs, what would you consider the key components to consider when you're thinking about setting it up?
Samer Mihyar:So when we look at the channel business and look at partners, the very first thing to do is partner segmentation. So not all partners are the same, we got to live with that. So not all partners are the same, we got to live with that. And what motivates an enterprise might not work for an S&P bar, right? I first learned this, I think, in my second job within the telecom, where we had a massive network of resellers and I did a cash-based incentive for those resellers. And I did a cash based incentive for those resellers. You know what I came to find is, you know it worked a lot with smaller resellers. You know those who that can provide this with their run rate business. But then with bigger companies, that simply didn't work. Um, they were more interested in things along the lines of, you know, co-marketing funds or lead sharing right, simply because you know those cash incentives on the individual level, they don't make any difference because salespeople within the enterprise, they're paid well, they're paid much higher than you know with smaller business. So understanding that well, segmenting your partner base, understanding the differences, is the first thing to do when you design an incentive program. The second thing is based on what we discussed earlier the psychology of your partners. Mix it up. Don't keep it purely financial. Don't keep it purely financial, don't keep it purely for sales. Make sure that you involve everyone within the sales cycle pre-sales marketing, post-sales sales. As I said, cash can be great, right, but things like training, marketing, support, recognition, right, public recognition, the awards, you know that mention on your website or in your social page. I can go a long way. So consider both financial and non-financial rewards in a program.
Samer Mihyar:The third I would say you know, just keep it simple. If it's too complicated, you know partners want to engage, right, um, and that we can easily fall into that trap. You know, sell X from product A and X from product B and Y from product Z, right. If you achieve all of them together, then you get this. If you achieve those two, then you get that right. It's just too much. Just keep it simple and easy to understand. And finally, just make sure that you know and again we talked about that, we that it's easy to track for both parties, really, for you as a vendor and for partners. You know, for partners, you know, that data driven information you know. For partners, you know that data driven information, you know, can help them understand where they are and what they've achieved and what they got, and from a vendor you know. That helps you understand if it's working or not. Who is it working with, who's not responding or engaging right, and that gives you great insights into you know what you can do in the future.
Maciej:To flip it the other way. So what would be some of the common mistakes that you see companies make when designing partner incentives? You mentioned already that individual incentivization within that enterprise type partner right that doesn't work. What are the other things that you've seen that don't work and maybe how can companies avoid those?
Samer Mihyar:I might sound repetitive with some points, but hear me out and I'll try to structure them differently or maybe add layers to them right? One of the mistakes that I've done in the past is over-reliance on rebates. Rebates alone, they don't build loyalty. One of the mistakes that I've done in the past is over reliance on rebates. Rebates alone, they don't build loyalty. I mean, I was able to attract partners from competition simply by doubling rebates, but as they switched for me, they're going to switch if someone else would offer more. So it's not only about money. Rebates alone, they're not going to work.
Samer Mihyar:Another thing is ignoring the sales journey. Again, we touched on this. But programs that only reward closed deals miss opportunities to incentivize. You know other people within within the organization, partner organization and you want as many advocates as you can have, right? So if you get the pre-sales team, the post-sales team, the marketing team on your side, hey, you know, this vendor is the best to work with we. We don't need to think about moving away from them. Again, it's that mind share. So incentivize across the sales journey. Keeping it just on sales this is short term. It might fix. It's like putting a patch on a hole. You actually need to fix it. That patch is going to wear off at some point. One-size-fits-all programs again. It goes back to the segmentation. Different partners have different needs. A rigid program will alienate certain groups, that's guaranteed.
Samer Mihyar:And then you've got the complex and confusing structures. We tend to destroy programs teeth right. And then you've got, you know, the complex and confusing structures you know we we tend to, you know, destroy programs before we launch them. You know, simply because we're trying to achieve so many things at the same time right, trying to make it complex. But, yeah, the easier to understand, the better results you'll have, because you know partners will be, will be definitely engaging more thank you.
Maciej:And even though you know partners will be definitely engaging more, thank you. And even though you know it was a repetition of some of the points, putting up those extra layers in there definitely helps. When we talk about incentives and we mentioned that earlier already you know you need to be able to measure it, you need to be able to display it live to the partner so they know exactly where they stand, how they can achieve those. But on the internal side, for the vendor, what are some of the KPIs that you would really depend on to measure the success of an incentive program?
Samer Mihyar:I think you've got the revenue covered. But beyond revenue and again you know, I think you'll have some micro KPIs, depending on the objectives that you're trying to achieve right. So you know something if you want to achieve more deregistration or more engagement on your you know this element of your portal then you know obviously you need to specify KPIs to that. But from a big picture, if you approach incentives in general, then I think you know you've got a few KPIs that you can look at. You know, first is partner engagement levels. Are partners actively participating? And the purpose here is to measure the effort that partners are putting. Are partners really trying their best? It doesn't matter if you're in sales much and you put a lot of effort and not all deals close, right, you've got a conversion rate and the same thing with marketing, right, and this is something that you gotta live with, this truth. But what's important is to see that partners are actually putting the effort and that we can measure through engagement. Are they reading your emails? Are they attending your trainings? Are they engaging in the planning sessions? Are they actively visiting the joint target list that we put together? And if they are, then at some point the results will come. So engagement is really really important.
Samer Mihyar:Another thing to keep track of is the sales funnel impact. So that's the question Are incentives driving early stage registrations or just last minute pushes? Are we able to grow our business with the partner? Are they acquiring new accounts, selling new products? And these are important questions to answer. Again, if you've got the effort, then you should see something on the sales funnel, whether that's right at the top, how it's moving from company to company and product to product. The cycle will shrink or extend.
Samer Mihyar:As you know, with solutions or software can be slightly longer than hardware and peripherals, but that's something to keep an eye on. In the software world. I would say retention rates right, that that's an important kpi, isn't you? You've done the sale right, but what's gonna happen next? Right? You don't want just to keep focusing on bringing new accounts. You know. So you know, are your incentive helping? You know improving renewals and maybe upsells. So and and finally, you know your ROI. So you know you've got the effort covered. Then you've got you're seeing how it's going through the funnel. Then you know that's your revenue track, that financial impact, to be able to say, hey, we spent 50K on that incentive but in return. This is what we have in the pipeline and that's what we got in in closed deals in terms of the.
Maciej:You know we talked a little bit about. You know partner segmentation, but there's new partner types coming up all the time and partners do evolve as an answer to the market needs, right? Do you see any trends in partner incentivization over the next I don't know year or two?
Samer Mihyar:Yeah, I think so. I think so. As a marketer, I've been playing around with AI tools a lot and you know it's quite powerful stuff that you see out there and it will only get better. And I think there are so many applications on the marketing side for AI. But I think AI can play a role in incentives. Imagine programs that can get more tailored by understanding that. But I'm talking on the individual level, let alone the partner level. So using AI to predict what type of incentive would motivate individuals.
Samer Mihyar:Gamification I think that's an underutilized area. So I would expect more uses of leaderboards, tiered rewards, engagement-driven incentives, and then you get non-traditional rewards. I was talking to a few partners a few weeks ago and one of them expressed how thrilled he is that we are paying for his holiday. How thrilled he is that we are paying for his holiday, and it's great to see that. You're a salesperson and you do a lot of hard work dealing with cold calls, emails, continuous follow-ups, a lot of no's and maybe's and achieving targets. So there's a lot of stress and I feel the sales community deserve a certain lifestyle and to feel that we're able to contribute to that lifestyle is just great. From a vendor perspective, obviously that brings in a lot of loyalty. So those types of rewards non-traditional rewards, I would call. You know the experiences.
Samer Mihyar:I think sustainability and sustainability focused incentives will have a role in the near future. You know vendors are continuously pressured to be you know, you know more green, improving their supply chains. You know carbon footprint and I hear you know that that's going to extend to the partner level, as customers are really requesting that. You will see vendors incentivizing partners to be more eco-friendly, and professional development perks. Those will play a big role, I'm sure. If you tell someone hey, how about you improve your skill set with AI tools? It doesn't have to be related to your product or as a vendor in terms of training and certification. No, let me help you utilize AI tools to make your job as a salesperson easier. Things along those lines. I feel they would add a lot of value.
Maciej:And, samer, you know this podcast quite well. You know that this question is coming. What's the one thing you wish you knew before you started your career in channel? And it doesn't have to be related to incentives.
Samer Mihyar:I wish I knew that channel success wasn't just about sales. I think I undermined the role of marketing within the channel business and I thought it's, you know, that number that we get out of partners. But really, you know, it's about relationships. And the moment I understood that you know thing, things have changed. Early on, you know, I found the best way to drive results was, you know, let's just throw money at the problem. But over time I realized that, you know, strong partnerships come from trust, alignment, mutual growth and not just money.
Samer Mihyar:If we talk about incentives and how we tailor them, how we think about them, we can lock ourselves as channel professionals in a room and argue and discuss this for hours, but then we can simply solve it by picking up the phone, talking to the partner and asking that question what really motivates you? What can we do to make sure that your people and your team are continuously motivated? And there you have your answer and based on that, you're building alignment, you're getting closer to the partner, you're understanding them. It's your duty to convey your objectives, what you're trying to achieve and see where it can work. So it's not really about selling, it's everything else. Before that happens, and the moment I understood that. You know. Things became much easier much easier.
Samer Mihyar:You know, I think B2B and channel marketing is still and will remain a human business. We need to double down on that.
Maciej:That's great, Samer. Thank you so much for coming on the show and sharing your expertise with us when it comes to partner incentivization. I really appreciate you coming on. Thank you so much.
Samer Mihyar:Thank you very much for having me, Macho. All the best.
Maciej:Thank you for tuning into this episode of Channel Voices. I hope you enjoyed today's conversation and gained valuable insights. Don't forget to subscribe, rate and leave a review on your favorite podcast platform. Every bit helps us grow and reach more future channel leaders like you. Thanks again and we'll catch you in the next episode. Thank you.
