Using Gap Analysis to Optimize Channel Performance

Managing a channel whose sales people you don’t control while making aggressive revenue targets may seem like an oxymoron. But lets take a look at Gap Analysis, one of a set of important tactics at the channel manager’s disposal.

"Channel Management"
Can be Very Challenging

The first step is to develop a partner rating system based on the key expectations you have for you and your partners’ success. Examples include future revenue (based on historical revenue performance), ability to sell higher margin products, support resources partners have committed to the sale of your products, commitment of partner executives, license sales by product, service sales, etc. Each parameter should be assigned a maximum point score based on its importance to you.

Then, using the rating system, Channel Managers should rate their partners. The outcomes include a detailed assessment of each partner’s performance against the parameters in the rating system, and, importantly, the potential revenue gap the Channel Manager will see given the current revenue anticipated from your partners.

With the intent of eliminating the gap, Channel Managers should next determine where individual partners have performance weaknesses, and the financial impact if the partner were able to rectify that weakness. This becomes the foundation for a Value Proposition the Channel Manager should lead the partner to pursue. For example, one of our clients sells a suite of software products. This analysis revealed that most partners were good at selling their database product (the easy, low-hanging fruit) but lacked the commitment to sell the high-margin middleware product.

Based on those potential performance improvements, the channel manager should conduct the gap analysis again to see how much of the initial gap can be eliminated.

If a gap remains, the Channel Manager now knows that additional partners are needed to eliminate it.

Stay "tuned" for additional channel management tactics!