Take the Guesswork Out of Channel Revenue Forecasting

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Do you find yourself guessing what the revenue contribution from your channel partners will be at the end of the month or quarter?

Do you look at historical performance and “hope” it continues or even increases over time?

For companies that sell through channel partners, separation between financial forecasting and a channel partners’ actual performance has long been difficult to align.

Why does accurate forecasting and deal tracking matter?

Traditionally in the indirect sales model, the time lapse between what you hope will happen and what actually happens can have significant costs associated with it. You might be saddled with too much inventory and forced to incur the associated carrying costs for an anticipated demand that doesn’t materialize . Or, you might experience lost sales because low inventory prevents you from fulfilling an unexpected sale.

When visibility is limited across your channel partner network, the result is an information gap that strains  financial reporting and forecasting, not to mention the operational impact of running an efficient channel-revenue business.

Stop flying blind

Closing this information gap is a critical step to better understanding and managing the channel sales process.

To take the guesswork out of channel revenue requires clear and timely pipeline visibility. When leads are shares with distributors, do you they fall into a black hole? Or, are they easily tracked during every step of the buyer’s journey?

Enabling revenue-related information to flow back and forth seamlessly between a company and its channel partners requires an integrated approach.  In the past, integration has been complicated  by the fact that distributors and channel partners are working from different systems, making it impossible to actively share and update the status of a deal in both directions (from manufacturer to channel partner and from channel partner back to manufacturer).

But the ability to do this is absolutely key to accurate and timely forecasting and opportunity tracking mentioned above.

How to anticipate your needs

Channel revenue visibility allows you to anticipate your needs — whether that be inventory, revenue planning or revenue estimates for shareholders. To do this requires a shared platform that provides a unified view of distributor performance as it happens. Rather than hope or guess at what is taking place among your partners, a connected network of channel partners communicating easily via the same platform around deal status, action items, and opportunity tracking allows you to accurately track, manage and plan.

Armed with deal tracking data in real-time, you’ll know instantly:

  1. whether you need to ramp up inventory or pull back,
  2. if you are on course to meet quarterly revenue targets, and
  3. whether your future revenue estimates are accurate

The bottom line is that you can’t improve what you can’t see. And the ability to quickly respond to needs, demands or changes generates revenue and saves time.

See how the LeadMethod platform creates connections that increase revenue visibility across the partner network.

How to Create a High Performing Channel Sales Engine

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This is the second in a two-part blog series that explores the differences between passive and active channel engagement, and provide tips on how to create a high-functioning, outcome-driven channel sales engine. If you missed our first blog that explains the characteristics of a passive approach, check it out here.

6 Steps to Active Channel Engagement

Is all engagement created equal?

When it comes to channel enablement — pushing for high performance and better revenue outcomes — the answer is no.

In one corner is the passive approach. Notoriously inefficient in the channel sales environment, passive engagement is often marked by miscommunication, incomplete or old data, and technology that isn’t built for the unique requirements of channel sellers.

You can read if you fall into the passive camp here.  

By contrast, active channel engagement is distinguished by efficient, two-way flow of real-time information utilizing technology purpose-built for companies that sell through distributors or partners. Brands that adopt active engagement strategies are better able to adjust to market dynamics and customer needs, and experience immediate revenue gains from existing leads and opportunities.

Redefining Channel Sales

Active channel engagement is an approach that leverages pro-active and contextual engagement to truly enable the channel and maximize revenue potential. It’s the link that provides critical information flows between the manufacturer and channel partner based on the same view of the data.

Here are six critical elements that define an active channel engagement approach:

  • Unified view
    A unified view of all lead and opportunity details so that both manufacturer and distributor see the same updates and points of need.
  • Alignment
    Push-based notifications that align with current workflow providing information to the right person at the right time consistent with a “next best action” approach to sales enablement.
  • Continuous feedback
    Closed-loop feedback and status reporting that builds an information bridge between a manufacturer and all their distributors so that details on lead quality, deal status, training and education needs are clearly actionable.
  • Contextual
    In-context sales content and materials provided at the system level and positioned at the right deal stage and right product offering allowing for continuous training and knowledge transfer while providing a single publish and distribute interface for the manufacturer.
  • Visibility
    Visibility to leading indicators of channel performance like lead scores, follow up times, and deal stage conversion rates as a single view that both manufacturer and distributor can use to manage the channel.
  • Create a high-performance sales engine
    When active channel engagement strategies are implemented, the result is immediate revenue gains — generated from existing lead and opportunities as well as from cost reductions. Longer-term, the channel is able to reach its revenue potential, and better adjust to changes in market dynamics or customer needs.

Adopting an active channel engagement approach is essential to maximizing revenue and return on investment from channel activities. By establishing and integrating engagement, feedback, sales enablement, and nurture processes, manufacturers become better aligned with distributors and create a high performance channel sales engine.

Want more expert Channel Engagement advice? Drop us a line.

Is your Channel Engagement Approach Functional, or High Functioning?

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This is the first blog in a two-part series that explores the differences between passive and active channel engagement, and provides actionable steps to help manufacturers create a high-functioning, outcome-driven channel sales engine.

5 Characteristics of Passive Channel Engagement

Selling through channel partners and distributors is an established, proven, and scalable go-to-market approach for manufacturers of all types. Channel partners that specialize by industry, region, or account are an important piece of the sales puzzle and provide access to large market opportunities without little to no internal investment.

The channel sales model, however, is not without its challenges — mostly notably disparate systems and processes fraught with inefficiencies, miscommunications and missed opportunities. This leaky system tends to inhibit revenue optimization. Sure, you’ve got a car that runs. But it’s not firing on all cylinders, and it’s bleeding precious fuel.

Activities versus outcomes

To date, “enabling” the channel has been more focused on activities rather than outcomes. Sign up channel partners, make sure they have access to the information they need, send them sales leads, support them when they request it, and reap the benefits of their efforts.

This passive approach is functional, but not high-functioning. It does not give channel partners any reason or motivation to engage. And most importantly the passive approach doesn’t promote ‘sales enablement’ in order to help channel partners sell.

Companies that continue to use passive channel engagement practices are losing money. We characterize passive channel engagement as the use of the following:

  • Web-based portals
    Providing a web-based partner portal or secure site that asks channel partners to log in and learn software. These tools offer suffer from low usage and low relevance.
  • Internally oriented CRM
    Trying to manage external selling relationships with an internally oriented CRM system that does not accommodate for the disparate parties involved and their often conflicting processes and systems.
  • Incomplete
    Absence of valuable feedback and input via a continuous and collaborative approach to information sharing.
  • Inconsistent communication
    Ad hoc communication around the quality of sales leads, status on open opportunities and needs related to training and education.
  • Old data
    Relying upon emails and spreadsheets to collect, aggregate, and report on channel sales performance creating a lagging view of revenue generation and goal tracking.

In our next blog in the active versus passive channel engagement series, we’ll explore how to create a higher-performing sales engine and share 6 tips for developing an active approach to channel engagement.

3 Critical Questions CFOs Should Ask About Channel Sales

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The role of today’s CFO is evolving. Once upon a time, CFOs and budget managers were tasked with preserving the assets of an organization by minimizing risk, getting the books right, and running a tight financial ship efficiently and effectively.

In today’s fast-changing digital workplace, CFO’s increasingly play a more diverse role as strategic decision maker, responsible for leveraging data to shape overall business strategy and direction, often under increased pressure to cut costs and grow revenue.

What does this mean for CFOs who helm finance departments in the channel sales environment?

Critical channel sales questions

Today’s modern CFO has the opportunity to be more streamlined, collaborative, and most importantly, accurate. To do that, there are three key questions a CFO needs answer about channel selling activity:

  1.     What is the forecasted revenue contribution from channel sales this month/quarter?
  2.     Are my marketing expenditures generating a return?
  3.     How do we increase revenue from existing partners?

But the channel sales space presents hurdles — communication and visibility, chief among them —  that make providing answers to these questions inherently difficult.

In traditional manufacturer/channel partner relationships, forecasting, for example, is nearly  impossible to predict with significant accuracy and timeliness. And what good is forecasting data if it’s unreliable or revealed too late to be relevant?

Outside the four walls

Obtaining  up-to-date and accurate information about quarterly sales performance, opportunities for cost savings, or where to make additional investments is problematic because so much sales activity take place outside the four walls of the company.

Once a sales lead leaves the building and is handed over to a channel partner, it becomes  difficult to track as it moves through the funnel. This “dark hole” severely limits the ability to forecast or track deals. And without a unified view of performance, including conversion metrics, across your distributor network your ability to respond to changes, make investments, or chart a new course — in essence operate with any agility — suffers.

A unified channel revenue view

The key to better visibility — whether you’re looking for ways to streamline costs, determine ROI on your marketing spend per lead, or want the ability to budget more accurately — is  a single, unified platform. This unified view is the most comprehensive way to understand, manage, and improve the channel sales process, and also offer business-critical insights important to successful CFOs, such as:

  • Real-time revenue visibility and pipeline reporting
  • The ability to track performance metrics on marketing programs relative to lead conversion rates
  • Channel Partner performance over time

The ability to understand, manage, and improve the channel sales process are essential to optimizing the entire operation and seeing improved results.

To learn more about LeadMethod’s performance tracking and forecasting capabilities, schedule a live demo.