Assessing Channel Partner Productivity

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How can you manage a consistently productive indirect sales channel? By establishing a baseline for existing partner productivity and taking proactive steps to consistently improve the factors that drive higher levels of performance. Have you established a baseline for channel partner productivity? View the presentation to learn more ...

Transcript of Assessing Channel Partner Productivity

  • 1. Assessing Channel Partner Productivity Virtual CMO Marketing Services Strategy | Execution | Impact 1 Dave Zwicker, Virtual CMO July 17, 2013

2. Copyright 2013 Virtual CMO Channel Partner Productivity Market dynamics are affecting channel partner productivity Many partners are managing a business transformation: From one-time revenue (e.g., VAR) to recurring revenue (e.g., MSP or CSP) From premise-based technology to cloud-based technology Many vendors are changing their business and technology focus: Less hardware, more software, everything going to the cloud Vendors typically need more partners with the right profile: Company size, market focus, staffing, skills and vendor commitment An appropriate business model (VAR, MSP, CSP, IT Consulting or hybrid) And Partners always struggle with sales and marketing 2 3. Copyright 2013 Virtual CMO The Key Questions to Ask What is the average partner productivity? How much revenue generated per month, quarter, year? What is the average rate of customer acquisition? Its not the top performers & its not the non-performers Average performers determine the productivity baseline How can average partner productivity be improved? By assessing five key channel productivity factors Small improvements in each area will combine to drive major growth in total channel revenue 3 4. Copyright 2013 Virtual CMO Five Productivity Factors Average Contract Value Often a function of revenue per user And the average number of users per customer Customer Acquisition Rate The number of new deals a partner closes each month A function of the size of the pipeline and the efficiency the partners sales function One-Time Revenue vs. Monthly Recurring Revenue OTR has greater short-term value but requires higher deal volume for consistency MRR has a lower short-term value but predictable, long-term value to the business The Total Number of Productive Partners How can more productive partners be developed and/or recruited? How can partner productivity be increased from average to ideal? The Revenue Sharing Strategy How can partners be incented to sell more? Do all partners earn their share of the revenue? 4 5. Copyright 2013 Virtual CMO Existing vs. Ideal Productivity 5 Increase the average customer size by 5 users Increase OTR and MRR by $10/user This adds $500 to the average deal value Grow the number of productive partners from 75 to 150 Increase the customer acquisition rate from 1 deal/month to 1.5 deals/month No change in the revenue sharing percentage No change in the mix of OTR to MRR Sample Inputs: 6. Copyright 2013 Virtual CMO Projecting the Revenue Impact 6 These models show the 3-year vendor and partner revenue streams based on existing & ideal productivity assumptions They provide a detailed view of the improvements resulting from each of the five productivity factors 7. Copyright 2013 Virtual CMO Evaluating the Results 7 Here is a quarterly revenue summary based on existing partner productivity data Here is a quarterly revenue summary based on ideal partner productivity targets The improvements modeled on slide #5 will drive a 350% increase in channel revenue! 8. Copyright 2013 Virtual CMO Accelerating Revenue Growth 8 Here is a graphical view of the existing and ideal revenue results 9. Copyright 2013 Virtual CMO A Partner Productivity Plan 1. Establish a partner productivity baseline Gather historical performance data Conduct partner interviews and analyze findings 2. Set achievable productivity improvement targets Identify areas of productivity improvement from partner assessment Gauge the revenue impact from the five productivity factors 3. Determine the required programs and actions Design partner-focused lead generation programs Launch a targeted partner recruitment program Create upsell/cross-sell/pricing/bundling programs Develop partner resources and training programs 9 10. Thank You Email: dave@vcmo.net Website: www.vcmo.net Copyright 2013 Virtual CMO 10 Read the blog post: http://virtual-cmo.net/?p=987 To request the model, just drop me an email