This is part 4 of our 8-part blog series, 8 Steps to Help Channel Partners Build and Execute a Profitable Cloud Business.
$1,000,000 – or any number that aligns with your cloud sales strategy – sounds like a great revenue goal, but how will you get there? It’s not a good strategy to pull a number out of thin air without an actionable plan. Here are several best practices for partners that focus on establishing key performance indicators (KPIs) for achieving – and even exceeding – your cloud sales goals:
Develop a financial plan based on KPIs
A financial plan driven by KPIs can give you the best understanding on how to reach your cloud revenue goal. For example, consider how many deals, the size of the average deal, and the average number of deals closed per month to reach that goal. Overall, taking a KPI-based approach makes it easier to manage revenue targets because the KPIs are the only variables that you can change, while your dollar figure remains the same.
Focus on measurable and actionable KPIs
Actions speak louder than words – or numbers in the case of building your cloud revenue goals upon KPIs. The following KPIs are great examples of measurable and actionable indicators that you can mix and match according to your cloud sales strategy. In any combination, actionable KPIs will lead you in the right direction to optimal profitability:
- Number of leads per month
- Lead conversion rate
- Win rate
- Number of wins
- Average deal size
- Number of calls per lead
- Number of calls per opportunity
- Cost per lead
- Cost per associate
- Attrition rate
Roll out a tracking system and scorecard for the KPIs
Tracking is as easy as picking a couple of KPIs and doing the math. Let’s say you get a couple hundred leads per month and you convert 10% of those. One hundred leads provides up to 10 sales opportunities. If you win 33% of those opportunities, you win three deals, and if the average deal size is $1,000, you sold $3,000 that month. Even in this simplistic example, you can see how tracking KPIs is an effective and real-world method for planning cloud sales revenue numbers.
A KPI scorecard goes hand-in-hand with tracking KPIs in helping you see how your sales performance is affecting your cloud revenue goal month-to-month. For example, compare your actual results against your set KPIs. Did you reach your goal of 100 leads per month, or was it fewer, or more? The advantage of using KPIs as lead indicators is that you can easily adjust the actions they represent from month-to-month – even mid-month – if you see you’re not on track. Let’s say you exceeded your goal and gained 140 leads in a month and you want to challenge yourself to get 140 next month, too. Just look at your KPI scorecard and make adjustments that are actionable.
Without establishing KPIs as lead indicators, you’re only guessing and wondering why if you are not meeting your cloud revenue goal. When you track and score KPIs you can get down to the real numbers – and then make real changes to make that $1,000,000 goal a reality.
Here are additional best practices that you can incorporate into KPI tracking and scoring:
- KPIs become the lead indicators used to execute the plan
- Build a model using KPIs as variables
- Make sure your KPIs are reasonable and achievable yet challenging!
- Use industry averages if you do not have historical reporting specific to your business
In our next blog post, we’ll look at how your KPI-based financial plan will help you get your executive leadership team on board to approve and support your cloud sales model.
For more information about Ingram Micro Cloud’s channel partner program, visit www.ingrammicrocloud.com/become-a-partner/.