Friday, January 23, 2004

TACTIC: Measuring Channel Performance

Together with VenLogic, a Seattle company that helps start up companies prepare to raise venture capital, we are launching a Chanel Performance Maturity Index CPMI to objectively score channel providers (VARs, SIs and ISVs) abiltiy to deliver as channel partners. This index is an outgrouth of Channel Ventures Channel Performance Index (CPI) and PCAT (Provider Capability Assessment Tool) benchmarking studies and VenLogic's Venture Maturity Index (VMI) that rates start up business like the VC would before investing in a new venture. I am not sure whether the vendors or the providers will benefit more from the CMPI.

In our preliminary product development and testing of PCAT, we have found that channel providers also place a high value on comparative performance data. Last year we did in-depth analysis of provider business issues for 10 hardware centric providers for a major vendor looking to improve its relationship with strategic accounts. Participants said that the PCAT evaluation would form the basis of their strategic planning, changed how they reviewed and managed their businesses and was among the most valuable things their vendors ever did with them.

The impact on the channel sales force was just as big. With the PCAT data, executive sales training and executive discussion guides, channel account managers dramatically improved the relationships with key providers. Executives also valued the reports because it gave a concise business issue centric overview of the provider rather than the traditional last quarter/last year sales in data. Armed with business model benchmarks, executive were able to have more productive strategic review sessions.

A customer centric approach to channel management requires vendors and channel providers to openly discuss business issues. We have found that objective standardized data is the best way to get past the emotions and legacy issues that interfere with trust and openness.

Scott Karren, The Channel Pro


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