Designing channel incentives to overcome reseller rejection

As more and more products are distributed through independent channel resellers, suppliers find it increasingly difficult to craft highly motivational incentive packages. Instead, many suppliers' product lines are neglected by resellers in deference to more compatible incentive offers. This paper studies the many aspects of incentive rejection and incentive compatibility and prescribes a four-step, theory-based process to help suppliers craft attractive incentive programs. The process involves identifying resellers' performance needs, recognizing how each need suggests a different basis for incentive rejection, and designing an incentive package such that the incentives support specific reseller needs. Also, unique channel conditions are considered.