Market Core · Sales Channels · Module

Channel performance

What each route delivers against what it costs, including the cost of managing it and the margin it takes.

The idea

How it works

Channels are judged on revenue and should be judged on contribution. A route delivering volume at a margin share that leaves nothing is producing activity rather than profit.

Customer quality differs by route, and it is rarely measured. Customers acquired through one channel may retain far better than another, which changes the ranking entirely once lifetime value is used.

Working with it

In practice

  1. 01

    Measure contribution, not revenue

    After margin share, management cost and support load. The ranking usually changes.

  2. 02

    Compare customer quality by route

    Retention and expansion differ by channel, sometimes by more than the margin does.

  3. 03

    Include management cost

    Partner routes consume attention that appears on no invoice and is frequently the largest cost.

  4. 04

    Review before renewal

    A route assessed at the point of renewal is assessed too late to change anything.

One level in

The components of channel performance

A component is something that exists afterwards which did not exist before — a deliverable or a mechanism, not an intention.

  1. The contribution

    What each route delivers after margin share and cost to serve.

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  2. The customer quality

    How customers from this route retain and expand.

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  3. The management cost

    Time consumed managing the route, which appears on no invoice.

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Customers from different routes retain differently, sometimes by more than the margin differs. Measure both.