2007
Autumn
Channel Management
Insights Partner Scorecards: Evaluating Channel Effectiveness PART 1 As we head into another new year, it seems one of the new “Buzzwords” being discussed among clients and the industry in general is “scorecards”. Interestingly, the use of the term as it relates to vendor and channel communities means different things depending on the industry. For most packaged goods (food and drug) and other consumer good manufacturers, the use of the term often refers to vendor scorecards. Specifically, how the retailer scores the vendor across a number of attributes, including; delivery and stocking policies, marketing programs, and other metrics related to category profitability. It is then up to each vendor to plan a solution that will improve their failing areas or they will risk being de-listed from the retailer’s merchandising assortment. Alternatively, for most business-tobusiness marketers, a partner scorecard refers to the vendor’s evaluation of an individual partner or reseller as a means to gauge profitability and growth potential. These Partner Scorecards are the primary subject of this article— and a focus at CCI. For the 23-years of CCI’s existence, vendors have been seeking a way to
measure the profitability and true potential of their channel partners. Our own anecdotal data, as well as more formal research conducted by other parties, indicates that the inability to secure meaningful, actionable insight about partner and program activity is the #1 issue among strategic sales and channel managers. Like the old adage: “I know that half of my advertising is going to waste, I just don’t know which half.” Channel managers continue to launch new channel programs to a more diverse channel organization with little insight as to what’s working
CCI provides software and services to help marketers manage, measure, and optimize sales channel performance.
• The inability to effectively measure sell-through volume, particularly in a multi-tiered, multi-distributor channel model. • The inability to correlate marketing program participation to incremental sales gains (and more importantly the direct and indirect cost of those marketing programs). • Disparate systems and processes that can’t really provide roll-up reporting across a number of dimensions—because they were really never designed to do so.
The technology and acumen are now available to vendors of all types to capture key insight about their channel partners, and individual channel programs. and why. This is particularly frustrating as product life cycles, customer needs, and channel business models are changing more rapidly than ever before. Essentially, this enhances the need for accurate, real-time insights. After all, doubling sales volume vs YAG is really no accomplishment if the cost to do so consumes all the contribution margin and ties up your resources. But how do you know??? In the past, factors that have limited the ability to develop valid metrics have included one or more of the following:
Well, we are at the dawn of a whole new era. The technology and acumen are now available to vendors of all types to capture key insight about their channel partners, and individual channel programs. Armed with this insight, vendors can achieve greater channel optimization through improved program efficiency, partner effectiveness, and faster speed to market (or at least improved reaction time). Through CCI and other companies, the technology exists to capture POS data, Continued on Page 4