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Measuring Channel Success: Reach, Frequency, Yield

Mindshare for today’s channel comes at a premium. If you are a Channel Manager looking to grow your business it seems easiest to go after your best partners and ask for more business.  Many times, your partners will sell into their existing accounts and become deeply involved in deployments, leaving little capacity to sell more.  Focusing on the broader issue of creating channel capacity by increasing number of Channel Partners, shortening sales cycles and generating more revenue per transaction will increase Channel Partner revenue and ultimately your ability, as a Channel Manager, to achieve your goals.

 

Here is a framework for thinking about how to grow the Channel Partner revenue for your business.

How Much Reach Does Your Channel Have?

For this discussion, reach is the number of partners you have in your channel. How many partners do you really need?  For example, if you had a group of 10,000 Channel Partners that placed one order per year, and could count on them year after year for at least one order of $1,000 or more, you would generate $10 million dollars annually.  In this scenario your reach is 10,000 Channel Partners with a Yield of $1000 per order and frequency of one order per year.  Using this framework to grow channel revenue, consider a range of options including recruiting more partners, attaching more service to each order, and/or increasing frequency through a variety of incentives. Having a broad reach with predictable frequency and yield produced a high-margin outcome for the company.

How to Get More Frequency from Your Channel Partner

Sometimes Channel Partners will get stuck on their first few opportunities. This could be during the sales cycle or perhaps during implementation of their first few opportunities.  Maybe the Channel Partner doesn’t have all the answers to Frequently Asked Questions (FAQs), or maybe the product line is evolving and they don’t have a clear understanding of your product roadmap.  This could slow the sales cycle. Shadowing your partners for their first few deals and making sure they have a complete understanding of your market support material and collateral could go a long way to shorten the sales cycle.

 

If your partners quickly sell into their best but don’t come back for more low frequency could impede your ability to achieve plan. Possibly your product or service is difficult to implement. Lack of training tools, seed data, best practice templates, or product instability may slow the implementation cycle. Ensuring your partners have the support they need to be successful will quickly get them through their implementation and get them coming back for more.  

 

In some complex(e.g. multinational) implementations,  your partner may not have a deep- enough bench of service professionals to get through a systems deployment and come back for more. You may consider aligning your partners with additional implementation services. These services could come from internal resources from your company, or other systems consultants who specialize in implementation only.  These techniques will expedite implementation cycles and improve your frequency.

Are you Getting the Yield you Need from Your Channel Partners?

Think of yield as the average amount of each order placed.  You may have plenty of productive partners who order with predictable frequency.  We are all under pressure to continually grow revenue.  Where possible, increasing the average order size (yield) is a great way to grow your base.  Rather than flooding your market with new partners or perpetually asking for orders, getting bigger deals from your existing base will grow revenue over time.

 

If you have multiple products or services to sell you can train and encourage your Channel Partners to increase deal size by cross-selling and upselling techniques. Starting with “low-hanging fruit” or services that are easy to sell can get your foot in the door in accounts.  Once trust has been established you can “Land and Expand” within the count to sell more complex solutions and increase deal size/yield.

 

Another technique is to increase yield on your efforts is to target larger organizations for your solution. If your pricing model is based on end points, data size and other volume, training your partners to sell to larger organizations can help you grow your business.  In some cases, it may make sense to start with a pilot within a larger organization and patiently grow into a large opportunity.

 

Recruiting more partners or asking for more orders isn’t always the fastest way to grow your business. Consider reach, frequency and yield to grow your Channel Partner business over time and create a quality channel with predictable revenue streams.

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