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In 2019, 95% of Microsoft's revenue flowed through its channel partners. This figure, while impressive for a company of Microsoft's size, raises a curious question: why, in a 2022 survey, did less than 20% of B2B executives report their channel partner programs as "very effective"?

Channel incentive programs have become integral for organizations aiming to boost sales, drive loyalty, and foster strong relationships with their channel partners. When it comes to executing a successful incentive program, leveraging the right platform is paramount. 

Xoxoday, a leading provider in the incentive and rewards space, offers a robust solution to streamline and elevate your channel incentive initiatives. In this comprehensive guide, we will explore the essential elements and strategies for running a thriving channel incentive program with Xoxoday.

Why do companies need a channel partner incentive program? 

In the ever-evolving world of business, reaching customers isn't always a solo endeavor. Enter channel partners: distributors, resellers, retailers, and other allies who extend your reach and expertise. 

But how do you ensure these partners are firing on all cylinders, actively promoting your products? The answer lies in a well-crafted channel incentive program.

Here's why you need one:

1. Ignite sales

The most obvious benefit is increased sales. By offering rewards for achieving specific goals, you incentivize partners to prioritize your products over competitors. This translates to more sales, higher revenue, and a happier bottom line for you.

2. Increases engagement

Imagine a partner simply stocking your product on a shelf. Not exactly inspiring, right? Channel incentive programs go beyond just sales. You can reward partners for activities like attending training, participating in marketing campaigns, or providing superior customer service. This fosters a deeper engagement, turning partners into true brand advocates.

3. Reach new audiences

Partners often have unique networks and expertise you may not. A well-designed program can incentivize them to tap into these networks, expanding your reach to new customer segments and markets you wouldn't have accessed on your own.

4. Build Loyalty for the long haul

Rewarding partners consistently creates a sense of value and appreciation. They feel invested in your success, leading to stronger, long-term relationships. This translates to consistent sales, reduced churn, and a reliable partner network.

5. Drive specific behaviors

Need to push a new product line or clear out old inventory? Tailor your program to incentivize specific actions. This flexibility allows you to achieve targeted business goals while keeping partners engaged.

One size does not fit all! Partner ecosystem today are a mix of:

1. Traditional collaborators







2. New generation partners




Today's partner ecosystems are no longer a one-size-fits-all approach. They encompass a diverse mix of collaborators, including traditional players like agents, retailers, resellers, stockists, wholesalers, and distributors, who bring established channels and industry expertise.

Alongside them, a new generation of partners is emerging, including social media influencers, brand advocates, and strategic alliances. This blend of established and innovative partnerships allows companies to cater to a wider audience, leverage diverse strengths, and navigate the evolving business landscape.

A robust channel incentives program can pique your partners’ interest 

Brands that have implemented channel partner incentive programs have seen a 35%+ revenue increase. 

A well-designed channel partner incentives program can significantly boost your partners' interest and engagement. By offering rewards and recognition for achieving specific sales goals or exceeding performance benchmarks, you incentivize partners to prioritize promoting your products and services.

This, in turn, leads to increased sales, market share growth, and stronger partner relationships. However, it's crucial to remember that an effective program should be tailored to your specific partner ecosystem and consider factors like their needs, motivations, and preferred reward structures.

Managing channel partner incentive programs is anything but easy

While channel incentives offer a powerful tool to motivate and engage partners, managing these programs comes with a spectrum of challenges that can easily turn a well-intended initiative into a headache.

1. Administrative burdens

  • Time-consuming approvals and payment tracking: The process of approving partner rewards and ensuring accurate, timely payments can be tedious and resource-intensive, especially with complex structures and a large number of partners.
  • Impact of delays: Delays in receiving payments or rewards can quickly demotivate partners, leading to a decline in enthusiasm and potentially a drop in performance.
  • Costly operations for small transactions: Processing numerous small-value transactions associated with traditional incentive programs can significantly increase operational costs, reducing the program's overall cost-effectiveness.

2. Engagement and effectiveness hurdles

  • One-size-fits-all approach falls flat: Applying a uniform incentive structure across diverse partner profiles might not resonate with everyone. Tailoring programs to individual needs and preferences is essential to motivate and excite a broader range of partners.
  • Uncontrolled spending and wasted resources: If not carefully managed, incentive programs can lead to excessive spending without a clear return on investment. Aligning program goals with company objectives and setting clear performance metrics are crucial for ensuring efficient resource allocation.
  • Inability to adapt to the digital landscape: Traditional incentive programs, often reliant on manual processes and paper-based systems, struggle to keep pace with the dynamic digital landscape. Implementing modern technologies is essential to offer partners a seamless and engaging experience.

In essence, managing channel partner incentives programs requires a strategic and multi-faceted approach that addresses not just the rewards themselves, but also the administrative burden, partner engagement, and effective resource allocation.

Plain vanilla approach does not cut it

Delayed cash payments 

  • Spillage issues.  
  • Lack of efficiency in cash distribution leading to low morale. 
  • No control on usage. 
  • No option of branding/ personalization. 
  • Immediate financial impact


  • Difficult to finalize a range to satisfy all. 
  • Cumbersome to manage logistics. 
  • Products are prone to damages. 
  • Branding is time consuming and costly. 
  • Grievance handling


  • Large planning efforts. 
  • Difficult to come up with options that appeal to everyone. 
  • Low flexibility. 
  • Availability of all on planned dates.

Re-engineer your channel incentive structure and reward framework in new ways

The landscape of employee incentives has undergone a significant shift in recent years. Companies are increasingly moving away from the traditional method of offering delayed cash bonuses (like stock options or performance-based payouts) and are instead opting for more lucrative and creative gift options.

This transition stems from a growing recognition of the limitations associated with delayed cash and the desire to create a more engaging and memorable experience for partners.

Research from the Incentive Research Foundation found that more than 43% of companies use some form of non-cash compensation, with 81% of the best-performing companies using non-cash rewards.

The rise of creative gift options

Companies are embracing more innovative and personalized approaches to employee rewards.

This includes:

  • Experiences: Instead of material possessions, companies are offering unique experiences like weekend getaways, adventure trips, or cultural events. These experiences create lasting memories and foster a sense of connection among employees.
  • Wellness-focused rewards: Acknowledging the growing importance of well-being, companies are offering gifts that promote health and relaxation, such as gym memberships, spa days, or meditation app subscriptions.
  • Personalized gifts: Companies are employing surveys or data analytics to understand individual preferences and offer tailored gifts like electronics, gift cards to preferred retailers, or home improvement tools.
  • Learning and development opportunities: Investing in employee growth by providing access to conferences, online courses, or mentorship programs can be a valuable and highly appreciated reward.

Benefits of creative gift options

  • Increased engagement: Unique and personalized rewards can generate greater excitement and appreciation among employees, leading to increased motivation and engagement.
  • Improved employee satisfaction: Fulfilling individual preferences demonstrates that the company values its employees' well-being and contributes to a more positive work environment.
  • Enhanced employer branding: By offering creative rewards, companies can differentiate themselves as attractive employers and attract top talent.

Personalized digital & experiential rewards have a lot more to offer!

Few are listed here,

1. Makes it easy to track delivery and redemption

Unlike physical rewards, digital and experiential rewards allow for real-time tracking of delivery and redemption. This transparency simplifies program administration, reduces manual workload, and ensures everyone is on the same page.

2. Makes it easy to handle taxation

Managing taxes associated with rewards can be a cumbersome task. Digital and experiential rewards often have clearer tax implications compared to traditional cash alternatives, streamlining compliance and saving you valuable time and resources.

3. Helps partners build an emotional connect

Imagine the excitement of a cricket fan receiving a trip to Lord's or a ski enthusiast getting a dream vacation to Vail. Personalized experiential rewards go beyond mere transactions, fostering emotional connections and creating lasting memories that solidify brand loyalty.

4. Saves you big money with bulk discounts

By leveraging the power of bulk purchasing, personalized digital and experiential rewards can offer significant cost savings. This allows you to stretch your reward budget further, reaching a wider audience without compromising the quality of the experience.

5. Cash can become an entitlement, whereas rewards feel earned, bringing in a higher level of satisfaction

While cash might feel like an entitlement, personalized rewards foster a sense of accomplishment and appreciation. Recipients feel they've earned the reward, leading to a heightened sense of satisfaction and value.

6. Beyond bills

Unlike cash, which often gets spent on routine expenses and quickly forgotten, personalized rewards create lasting memories. They stand out from the daily grind, associating positive emotions with your company and fostering a stronger brand connection.

7. It gives your company a “positive PR”

Many personalized rewards, like exclusive experiences or travel opportunities, can be shared with friends and family. This not only enhances the individual's experience but also creates positive word-of-mouth marketing, boosting your company's image and reputation.

8. Highly coveted rewards

Luxurious, non-cash rewards offer a unique escape and indulge recipients in something they may not normally experience. This exclusivity makes these rewards highly coveted and leaves a lasting impact, solidifying positive associations with your brand.

Case studies

Here are few case studies:

1. Moto HelloRewards Program

Company: Motorola Solutions

Industry: Mobile Technology

Challenge: Motorola faced the dual challenge of motivating their salesforce across various mobile carriers to complete training modules on their new product line and boosting overall sales performance. Their traditional sales incentives weren't yielding the desired results.

Solution: Motorola launched the "HelloRewards" program. This innovative program aimed to address the challenges by leveraging personalized digital rewards and fostering a sense of achievement among the salesforce.


  • Increase sales rep engagement and carrier participation by more than 60%, indicating a heightened commitment to product knowledge among the salesforce.
  • The program also saw a significant rise in overall sales performance, demonstrating the effectiveness of the incentive program in driving desired outcomes.
  • The instant gratification offered by virtual gift cards, coupled with the gamified elements, contributed to improved morale and motivation within the sales team.

2. Lenovo heroes shanghai project

Company: Lenovo

Industry: Computer Technology

Challenge: Lenovo sought to cultivate a culture of high performance and teamwork within their sales channel network. They aimed to motivate top-performing partners and strengthen relationships within the channel ecosystem.

Solution: Lenovo implemented the "Heroes Shanghai" project, an exclusive incentive program designed to recognize and reward top-performing partners.

Program Details

  1. Reward: Top-performing partners, based on exceeding pre-defined sales targets, were awarded a memorable trip.
  2. Selection process: Partners were selected based on a combination of sales performance and teamwork. This encouraged collaboration and knowledge sharing within the channel network.


The program successfully generated an increase in sales for Lenovo, exceeding their initial expectations. This growth can be attributed to the program's ability to motivate partners and improve overall channel performance.

  • Enhanced partner relationships: By providing a platform for interaction and knowledge sharing, the program fostered stronger relationships between Lenovo and their partners. This collaborative environment contributed to a more unified and effective channel network.
  • Increased motivation and engagement: The recognition and rewards offered through the program significantly improved partner morale and engagement, leading to a more enthusiastic and dedicated sales force within the channel.

Designing successful channel partner incentive programs needs to be backed up with robust technology - Xoxoday makes it easy!

Crafting successful channel partner incentive programs isn't just about offering enticing rewards. A strong foundation of robust technology is crucial for their smooth operation and effectiveness.

This technology streamlines program design, simplifies management, and ensures transparency throughout the process. Xoxoday exemplifies this concept by providing a comprehensive platform that empowers businesses to effortlessly manage their channel incentives.

The technology streamlines everything from program design and enrollment to reward distribution and performance tracking, allowing businesses to focus on fostering strong channel relationships and driving desired outcomes.

Get your channel incentives technologies right!

With Xoxoday’s technology you get:

1. One-click payments

Handle geographical payouts in varied formats like bank transfers, gift cards, credit notes and self transfer files.

2. Multi-type channel incentives 

Effectively manage points earned, MDF programs, SPIFFs, Rebate and CO-OP funds through a single environment.

3. 100% Rewards delivery automation

Tie every sales milestone to digital rewards with custom triggers and workflows. Automate channel incentives across a broad set of partners.

4. Error free incentive distribution 

Keep the incentive distribution error free and make instant payouts across geographies, without having to worry about tax implications and compliance.

5. Automate rewards in any application 

Easily integrate with your current DMS/CRM/ERP systems like SAP, Oracle NetSuite, Sage Intacct, Odoo, Microsoft Dynamics 365 etc and redeem from the widest global catalog instantly.

Easy reward disbursement modes

Here are easy reward disbursement modes:

1. Xoxo Points

Point-based rewarding where you can create unique points that are linked directly to the recipient’s email id or phone number and keep accumulating automatically every time a reward point is distributed. 

How it works 

  • Send Xoxo Points via Email and SMS 
  •  Recipient chooses from over 1 mn+ gift options 
  •  Recipient redeems the points and gets the gift voucher instantly

2. Xoxo codes

Alphanumeric reward codes available in standard denominations that can be used as an alternative to currencies. Xoxo codes are not linked with any email id or mobile number and hence are easily transferable. 

How It works 

  • Create multiple dedicated campaigns for various occasions 
  • Send codes via Email and SMS, in bulk or individually 
  • Recipient combines the codes or redeems them individually (fully or partially) until the balance is exhausted
Xoxoday was also featured in the Forrester’s Channel Software Tech Stack Report 2021 as one of the top-growing platforms in the "Channel Incentives Management" segment.

A channel incentive program isn't just about throwing money around. It's about strategic investment. Design your program with clear goals, relevant rewards, and transparent communication. Track results, measure impact, and adapt your approach as needed. By fueling your partner network with the right incentives, you'll create a powerful sales engine that drives sustainable growth and success.

Ready to ignite your channel? Start building your incentive program with Xoxoday. Schedule a free demo today!

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