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Assessing Channel Partner Productivity
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Transcript of Assessing Channel Partner Productivity
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Assessing Channel Partner Productivity
Virtual CMO Marketing ServicesStrategy | Execution | Impact
Dave Zwicker, Virtual CMOJuly 17, 2013
2Copyright © 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 …
3Copyright © 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?
• It’s not the top performers & it’s 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
4Copyright © 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?
5Copyright © 2013 Virtual CMO
Existing vs. Ideal Productivity
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:
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Projecting the Revenue Impact
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
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Evaluating the Results
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!
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Accelerating Revenue Growth
Here is a graphical view of the existing and ideal revenue results
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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
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Thank You
Email: [email protected]: www.vcmo.net
Copyright © 2013 Virtual CMO
Read the blog post: http://virtual-cmo.net/?p=987 To request the model, just drop me an email …