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Using Key Performance Indicators To Grow Channel Business

Speaking and mingling at the Channel Visionaries event recently in Newport Beach, California, we were struck by a prevalent theme: the channel is quickly evolving, and we need to anticipate and prepare for that change.

Due to the growth of cloud services, the channel partner of the future will have a business model that differs significantly from the traditional hardware reseller. One aspect of this new model is a greater dependence on recurring revenue.KPIs for the Channel Business

As channel partners evolve their business models, vendors must rethink their channel programs to keep stride. Channel partner performance will be measured according to new criteria.

But one thing will not change: reliance on measurement to track performance. And that’s where Key Performance Indicators (KPIs) come into play. Along with scorecards and dashboards.

What makes a good KPI? It’s SMART:

  • S = Specific
  • M = Measureable
  • A = Actionable
  • R = Realistic
  • T = Time sensitive

But KPIs are only helpful when aggregated and related to an attainable goal.

KPIs: The Building Blocks For Scorecards

Enter scorecards. KPIs are the building blocks of channel partner scorecards, which consolidate KPIs by business function. For example, if you want to measure your channel partners’ sales performance, you can set up KPIs to track sales growth, sales per partner, average sales order price, lead to shipped orders, or any number of other indicators.

How about those channel marketing programs you’re running—MDFs, co-op funds, rebates, discounts, commissions? A KPI that tracks and measures ROI can help you assess their value so you can improve or eliminate them.

KPIs that track channel inventory could include order tracking, inventory turnover, back order rate, and a host of other measurements. By grouping KPIs on a scorecard, you can compare an accurate view of present channel performance against established goals.

Dashboards: The Scorecard On Display

Just like the dashboard in your car, it’s helpful to see at a glance what’s going on under the hood of the channel.

A dashboard is a graphical display of the most important KPIs from your scorecard. They let you see immediately how channel partners are performing in near real time. And, like dashboard systems on today’s new breed of autos, they can sound alerts when a KPI gets out of whack, directing your attention to a problem.

Channel KPIs Considerations

Poor quality data can invalidate even the most carefully crafted KPI. Before you make your list of channel KPIs, consider data integrity. Also consider whether the data is obtainable, and link each KPI to a tactical or strategic objective. Also, weigh the cost of acquiring KPI data against the insight you are likely to gain.

Data Integration Is The Biggest Challenge

Don’t generate so many KPIs that you can’t make sense of them all. Start small, with just a handful of KPIs that offer the greatest insight into your channel operations. You can add KPIs as you need them. Also, make sure your KPIs are easily visible within the context of your daily workflow.

Get The White Paper

Do you want to learn more about channel KPIs? Download our white paper:
Using Channel Key Performance Indicators to Grow Channel Sales.

Combining carefully chosen KPIs, scorecards, and dashboards with an automated process that collects, cleans, standardizes and enhances point of sale (POS), inventory and sales-in, sales-out (SISO) data from all levels of the channel is the heart of an effective Channel Data Management system.

Which KPIs have you found most effective in measuring channel performance?

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