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Channel Matters Blog > January 2014 > Setting Channel KPIs

Setting Channel KPIs

by Geoff Wright
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Key Performance Indicators (KPIs) are those wonderful little metrics that every sales manager uses to make sure his or her team is headed in the right direction. They’re as essential as the points on a compass to ensuring the team is moving toward its objective.



For the sales leader managing channel account managers (CAMs) for the first time, knowing which KPIs to focus on can be a challenge. When I talk with sales leaders, they often tell me they’re comfortable setting KPIs for direct sales, but channel sales is new to them. They want to know which KPIs will help them keep their CAMs focused on the goal.
 
Each organization is unique, and there is no one right set of KPIs. Knowing which KPIs will help you reach your goals requires a little honest self-assessment of the maturity and health of your channel as well as having already set a clear and effective channel strategy.  
 
Assessing channel maturity
As in all goal setting, defining an appropriate set of KPIs for your CAMs requires an understanding of what success looks like.  Revenue targets are the goals most sales leaders immediately think of, and since most of us are in the business to make money, they are probably inescapable. But revenue targets have an inherent weakness. Our success at reaching them is only indicative of our past performance. They tell us little to nothing about how we’ll do in the future.
 
Channel KPIs should include metrics that put your CAMs on the right path to reach future revenue goals as well. Setting these KPIs appropriately requires a thorough understanding of the maturity of your channel today.
 
In several recent posts, we talked about the concepts of Market Mapping, Channel Segmentation and the Gap Analysis. These three exercises are fundamental to setting the appropriate targets for your organization, and they play a vital role in setting KPIs for your CAMs.
 
Channel lifecycle KPIs
Everything has a lifecycle: opportunities, products, markets and even channel partners. For channel partners, this lifecycle can be broken down into five phases including identification, recruitment, enablement, management and transition. Any one of these phases could have several KPIs, but the priority placed on any particular phase will be heavily influenced by the discoveries you make during your Market Mapping and Gap Analysis.
 
Identification – Are partners needed in a particular geography? Or, for a particular product line? Or, with a particular expertise? A KPI in this category might be to identify target partners for each gap in the coverage model.
 
Recruitment – KPIs in this category would be focused on filling the identified gaps in market coverage not only for what is needed now, but with an eye toward the future.   Recruiting and enabling a partner takes months so we need to be thinking about the shape and size of the channel we need well before we need it.  Of course it is vital that we only recruitment partners that will ultimately be successful as anything else is a waste of time and resources.  KPIs for recruitment need to be focused on quality not quantity.
 
Enablement – Channel enablement starts with the partner having a business plan in place and includes everything from the administrative tasks of setting the partner up in the system to ensuring their self-sufficiency in selling and delivering your products and services. KPIs in this category might include getting a certain number of partners past identified milestones on your enablement checklist. Or, it could include an across-the-channel goal such as a certain number of sales representatives from the partner channel achieving a product certification.  
 
Management – In addition to their sales role, CAMs are business managers. KPIs in this category could include completion of annual partner business plans or an analysis of partner potential and overall territory plan.
 
Transitions – As business models change, so do the organization’s channel needs. Transition goals could include executing the process of transitioning partners from a value to a volume model or transitioning unproductive (and often counterproductive) partners out of the partner channel.
 
As you can see, knowing which KPIs to set in each of these areas requires a thorough understanding of where you are now. If you haven’t already, go back and review the concepts of Market Mapping, Channel Segmentation and Gap Analysis. You can find more information on them in the Channel Enablers Resource Center, and they are concepts that we cover in detail in our Channel Success Essentials Workshop.
 
A few final tips
While this isn’t a post on KPI setting in general, I’d be remiss if I didn’t urge restraint. If you’re starting from scratch with your channel, it can be tempting to load your CAMs down with KPIs. Make sure the KPIs you target are weighted toward your channel maturity. If you’re just starting out, most of your KPIs will be in the identification, recruitment, and maybe the enablement phase. A more mature channel will have KPIs weighted toward the latter half of the channel lifecycle: enablement, management and transition.
 
As always, complexity is the enemy in setting goals. To ensure your CAMs stay focused, keep the KPIs simple, understandable and limited in number. And remember, compensation is the key driver of any sales team.  To be effective KPIs need to be linked to compensation.
 
If you’d like to discuss how Channel Enablers can help you set KPIs to reach your channel goals in 2014, reach out to me at Geoff.wright@channelenablers.com
 
 
 
Last modified on 3/20/2014 6:11:32 PM
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