Incentive Solutions Releases New ROI Calculator: Projecting Business Growth for Your Channel Incentive Programs

by: Nichole Gunn September 15, 2020

Introducing Incentive Solutions’ new and improved ROI calculator!

Here at Incentive Solutions, our mission statement is simple: to inspire growth. One of the most essential parts of the growth process is to seek out learning opportunities and find ways to improve. We collected market research, consulted our clients, and the newly improved ROI calculator was born.

Both designed and re-designed by our in-house incentive technology developers, our ROI calculator provides a financial preview of the return on investment for a channel incentive program.  

Let’s take a look at how the calculator works.

Steps for Using the ROI Calculator

Calculate

1.Outline the goals for your channel incentive program. 

The first step when considering any type of investment is to determine your goals. What are your company’s greatest pain points and how does your incentive program solve them? What is the maximum amount of funds you can invest in your program and what type of return do you need in order to make it worth your company’s while?

Channel incentive programs are a versatile investment, generating sales and marketing revenue, inspiring loyalty amongst channel partners, and much more. Figuring out your program goals will help in determining your target audience.

2. Determine the sales metrics for your target audience.

Your target audience is defined as the customers, internal sales team, or channel partners who have the most influence over the sale of your product. Your channel incentive program will influence their sales behavior.

For the ROI calculator to accurately project your potential ROI, you will need to provide:

  • The target size of your incentive audience; and
  • Average Annual Sales per Audience Member

Depending on your company goals, it might be necessary to project this type of data. Luckily, we offer free consultations with our  ROI-certified experts, who are happy to help you calculate these numbers. We have incentive experience with hundreds of clients across a wide range of industries, and we can provide a realistic ballpark of these numbers.

Furthermore, if you need help simply identifying your target audience, or are interested in compiling more complete B2B marketing data, ask about Open Enrollment or Performance Tracking incentive software modules. 

3. Enter the percentage of your average gross margin.

If you cannot attain these numbers from accounting, your average gross margin percentage can be calculated by the following formula:

Revenue minus Cost, divided by Revenue, multiplied by 100.

4. Enter the ROI your marketing dollars are currently generating.

This is another number you will want to seek out internally, be it through accounting, or speaking with a Marketing Department head. This may also be a good time to mention your research, and the marketing benefits companies stand to gain from a channel incentive program. Marketing ROI can be hard to come by, and any bit helps!
 

5. Enter the percentage of sales revenue you plan to payout to your incentive program participants.

This number is most likely an estimate. Incentive programs can help contribute to their cost. This number refers to the number of dollars’ worth of points (or travel incentive costs) that you plan to assign to your participants per dollar sold.

This percentage will fluctuate depending on how broad your target audience is and how closely they work with your business. Incentive Solutions also has options to apply different percentages to different members of your organization or different areas of your distribution channel.

6. Generate the percentage of your target sales increase.

This percentage will also be an estimate or a goal. To gain a better understanding of the business growth your company can achieve through an incentive program, we encourage you to speak with a representative or explore our case studies.

7. And finally- calculate!

Based on the above data, the ROI Calculator will provide the following:

  • Gross margin
  • Revenue increase
  • Annual program cost
  • Total ROI dollars
  • Projected ROI!

ROI Calculator

Again, this is projected business growth. If you aren’t arriving with an ROI that exceeds your expectations, continue to play around with the numbers to understand exactly what metrics you need to hit in order to make an incentive program a worthwhile investment. 

The ROI calculator is just the beginning of what can be an amazing growth opportunity for your business. Our account managers are ready to share strategy and explore the potential growth for your business, enhancing customer loyalty, and improving your distribution channel sales.

Give us a call! We’re nice!

Discuss Your Potential Incentive Program ROI With a Representitive!

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About Nichole Gunn

Nichole Gunn is the VP of Marketing at Incentive Solutions, an Atlanta-based incentive company that delivers advanced, agile B2B customer loyalty and channel sales incentives programs.