Channel Management Metrics and Sales Analytics
Whether B2B or B2C, nowadays growth based organizations have multiple channels to access their customers. Large organizations across sectors such as Automotive, FMCG, Consumer Durables, BFSI, Retail, e-Commerce, Telecom, IT & Tech have both direct sales as well as channel partners. Many B2B sectors such Industry IT, capital goods, aviation, chemicals also have channel partners.
Managing the performance of the channel, channel partners performance and improving overall channel effectiveness is a significant success factor for both the principal and the partner. Towards this, the role of analytics, particularly Sales Analytics is vital in achieving business goals and in making consistent progress.
For managers who are responsible for Channel Management and partner performance, such as Territory Sales Managers, Area Managers, Regional Managers, National Sales Managers, Account Managers, Dealer Management, Sales Analyst, Sales Planners, Business Heads here are a set of important metrics that they can monitor regularly. Once enough data is available, extensive sales analytics can be performed by channel sales managers using simple tools such as Excel to come up with insights for revenue growth. As the dynamics of Channel Partner Management for B2B and B2C are very different, I have split this into two groups – B2C Channel Partners and B2B Channels Partners
The type of metrics include Business Performance Metrics, Product Performance, Network Performance, Partner Profitability, Partner Sales Operations, Partner Staff Effectiveness, etc.
Region/Territory Level (B2B and B2C):
Following are a set of metrics that can be tracked at the Area Office, Region Office or Head Office Level to evaluate the performance of various channel partners and draw comparison between various channels.
- Market Share – by Category, by Segment
- Conversion % – by Lead Source, by Segment, by Model
- YoY Revenue Growth
- Network Penetration against potential
- Product Mix against competition
- Gross Margin – by Product
- Partner Cannibalization
- Product Cannibalization
- Contribution – by Category, by Segment
- Cross-sell and Up-sell % – by Channel, By Segment
- Customer Acquisition Cost – By Channel
- Repeat Business Revenue to Total Revenue – By Channel
- Carry over stocks
- Unfilled Staff Positions
Partner Level Metrics for Product Based Businesses:
In sectors such as Automotive, FMCG, Consumer Durables, Retail, Telecom, Technology products, etc, the trade channel includes Distributors, Dealers & Retailers who are appointed by the principal. In addition to the above, companies may appoint Modern trade partners such as large format corporate, e-commerce and have company owned outlets. When it comes to managing partner performance, below metrics that cover areas such as Partner Profitability, Operations, Inventory Management,Staff development are relevant for any Area or Sales Manager.
- Days to Break Even
- Profit per employee
- Sales Productivity – by person, by Segment, by model
- Conversion % – by Lead Source, by Segment, by Model, by person
- BTL Activity Productivity – by activity type
- Sales Process Satisfaction
- Overdue Customer Delivery
- Enquiry to Sale Lead Time
- Avg # of follow ups before lead drop
- Order cancel rate
- Average Leads per salesperson
- Sell through rate
- # of Stock Outs – by Model-Color
- # days of inventory
- Carry over stocks
- Inventory Funding
- Interest Coverage Ratio
- Pending incentive disbursal
- Staff attrition %
- Unfilled staff positions
- Product training adherence %
- Win-Loss Pareto
- Customer Retention %
- Cross-sell and Up-sell %
- Repeat Business Revenue to Total Revenue
Partner Level Metrics for Services Based Businesses:
In sectors such as IT products and services, industry IT, capital goods, aviation, chemicals, etc appoint resellers, franchisee, business associates in addition to direct selling done by the brand. When it comes to managing partner performance, below metrics that cover areas such as Partner Profitability, Operations, Inventory Management, Staff development are relevant for any Channel Partner Managers.
- Days to Break Even
- Profit per employee
- Sales Productivity – by person, by Segment, by model
- Conversion % – by Lead Source, by Segment, by Model, by person
- Campaign Productivity – by activity type
- Sales Process Satisfaction
- Enquiry to Sale Lead Time
- Avg # of follow ups before lead drop
- Order cancel rate
- Average Leads per salesperson
- Sell through rate
- % of Leads accepted by principal
- Pending incentive disbursal
- Staff attrition %
- Win-Loss Pareto
- Avg Cost of Acquisition
- Customer Retention %
- Cross-sell and Up-sell %
- Repeat Business Revenue to Total Revenue
Once a management routine to measure and report these metrics have been established, performance improvement can be achieved through advanced sales analytics such as:
- Trend Analytics – impact of seasons, month, week, day of week, time of sale
- Market basket analysis for bundling products
Factors resulting in poor conversion - Factors influencing Profitability and Contribution
- Effect of Sales Campaigns and BTL (Below The Line) promotion activities
- Factors driving known best performers
- Best combination for upsell and cross-selling
- And many more….
5 Surprising benefits of Sales Analytics
Sales Analytics can help Sales Directors to deliver business performance such as revenue growth, market share, etc. Having precise fact or data based reasons can help them take the right decisions at the right time.
But in addition to the above primary benefit of sales analytics, here are 5 surprising benefits of adopting sales analytics for any organization:
Execution Culture
The famous saying ‘What gets measured, gets done’ drives home the point that insights derived from Sales Analytics can cut down on a lot of planning, (over)reaction, corrective action, product recalls, course corrections, reviews, wrong hires, etc., and gets the focus back to action. Sales Directors and Managers can deliver on their promises to the company’s board and senior management. Ultimately, in the long run, the culture of the company will shift towards one of execution and results, moving away from excuse, uncertainty, ambiguity and complexity.
Improved Team Trust, Bonding Resulting in Lower Employee Attrition
When decisions are made based on facts or data, there is transparency in the system whether it’s to do with promotions, incentives, reviews. Mis-communication, in-appropriate feedback, unnecessary discussions, finger pointing, etc come down drastically, implying that the team starts trusting their managers, peers and subordinates more. The positive of this would be seen in high collaboration, sharing of responsibilities, delegation of authorities, faster execution, lesser employee attrition.
Sales Managers Become Better Coaches
When there is data available on not just the performance numbers, but factors that lead to poor performance, managers will have better insights to coach their employees. Their coaching will be specific, timely & personalized. They will also have more time on-hand to guide, engage and improve the leadership skills of their team members.
Lower Sales Cost & Effort
With Sales Analytics, sales initiatives such as below the line (BTL) promotions, staff hiring, forecasting, inventory management, customer requirement gathering, etc., would be more precise resulting in fewer trial and error, which is typical of new initiatives in sales. This will lower the sales cost and effort for the organization.
Higher Channel Partner Loyalty
When the principal is firm on its actions and results are consistent with the plan, channel partners start trusting the brand and loyalty is automatically built. For example, when the principal puts a lot of weight beyond a new product, builds inventory and asks channel partners to commit more, but later the product fails to create the anticipated impact, channel partners loose hope. With Sales Analytics, channel managers can use insights from data to manage the engagement and performance of channel partners effectively. With time channel partner’s trust on the brand’s promise becomes solid frutifying into lifelong loyalty.
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