article |
October 27, 2011
Channel Management: How to Improve Partner Sales Forecasts
By:
In the summer, our analysis of 152 companies indicated that best in class companies had a 5% variation whereas the median was 25%. You might be wondering how many firms saw 25% more channel sales than forecast – two of them. The rest received forecasts for sales that never materialized.
The Challenge
As much as your CEO or CFO may want a tighter forecast, you are in an arms-length relationship and have less control over external partners. Put yourself in their shoes.
A typical partner:
The payoff just is not there for them to allow you to impose more control over their forecasting. They can’t forecast differently for every vendor they work with today.
The traditional approach to handling this dilemma with partners is to give the whole channel forecast a hair cut of about 10-15%. Some will come in over their original forecast and that will make up for many misses from the rest of the partners. This simply addresses a symptom rather than address root cause.
Root Cause
The core issue is that your sales processes are different and thus the forecasts will be as well. Your process is designed specifically for what you sell. Your partner’s process is likely less robust given the variety of things they sell. The diagram below illustrates how they can differ.
If your partner is giving you a weighted forecast across all stage of their sales process, it may vary substantially to how you would forecast the same business.
The Cure
Let’s focus on the things we can control. Take the following steps to improve your overall channel forecast accuracy:
This may seem like more work but once you have it in place, it is much better in the long run. Several of our clients have moved to this methodology and have eliminated 100’s of hours from the monthly forecasting exercise.
Key Takeaways:
To learn more about effective sales process, view our recorded webinar on “The Truth About Sales Methodologies“. What have you changed recently from a channel management perspective to improve partner forecast accuracy?
As the calendar has turned to 2021, top-tier NFL teams are preparing for deep runs in the playoffs. ...
Imagine the following: As you scroll through social media, you come across an ad. Not just any ad th...
In a world of uncertainty, market leaders are sure which customer touchpoints require prioritization...
With the global shift to working from home, UC&C companies have witnessed a record amount of dem...
For market-leading software companies, the changing economic conditions have had a positive effect o...
On today’s special edition of the Revenue Growth Help Desk, we celebrate Women’s History...
You survived the rollercoaster of 2020. Now, you have 2021 ahead. It’s a new year, a fresh sta...
It may be easy to assume that tech-enabled services became an overnight success in the wake of the w...
SBI TV episodes bring you Sales and Marketing insights from B2B industry thought leaders and growth experts, on topics like product, pricing, customer experience and success, and go to market. Catch up on new and previous episodes here.