Sales Training Article: How to Improve Partner Sales Forecasts

Sales Training Article: Channel Management - How to Improve Partner Sales Forecasts

Originally published by Carlos Vidal, Sales Benchmark Index (SBI)

Channel management executives are troubled by sales forecasts that routinely show a greater amount of variation from actual sales than their direct sales counterparts. In the summer, our analysis of 152 companies indicated that best in class companies had a 5% variation whereas the median was 25%. You might be wondering how many firms saw 25% more channel sales than forecast – two of them. The rest received forecasts for sales that never materialized.
 
The Challenge
As much as your CEO or CFO may want a tighter forecast, you are in an arms-length relationship and have less control over external partners. Put yourself in their shoes.
 
A typical partner:

• Represents hundreds of products that range from simple items to solutions that require complex sales expertise
• Has no fixed sales cycle length
• Serves many masters (Customers, internal executives, vendors)

The payoff just is not there for them to allow you to impose more control over their forecasting. They can’t forecast differently for every vendor they work with today.
 
The traditional approach to handling this dilemma with partners is to give the whole channel forecast a hair cut of about 10-15%. Some will come in over their original forecast and that will make up for many misses from the rest of the partners. This simply addresses a symptom rather than address root cause.
 
Root Cause
The core issue is that your sales processes are different and thus the forecasts will be as well. Your process is designed specifically for what you sell. Your partner’s process is likely less robust given the variety of things they sell...

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