Measuring a business that sells through dealers, distributors and referrers

A dashboard measures what it can see. In a business that sells through other people, what it can see is usually the smallest part.

Written by the Colleviate Strategy desk

This is our reasoning from audit work, not a study, and it cites no figures. We'd rather say so than dress it up.

The dashboard problem

A leadership team looks at what it can see. For most companies that's web traffic, ad spend and leads. Now take a business that sells through dealers, a mutual fund house that sells through advisers, an equipment maker with distributors, or a hospital that depends on referring doctors. In those businesses the sale is made by someone else, in a conversation the company never sees.

So the sharpest numbers describe the smallest channel, and the biggest channel runs on belief. The dashboard is accurate. The picture is wrong. Both are true at once, which is what makes it hard to argue with.

What goes unmanaged

When effort is made by a partner, the company can't observe how hard that partner tried. It sees the order, or the lack of one. It can't tell a partner who never mentions you from one who mentions you and loses. A distributor with ten brands on the shelf gives each of them whatever attention it earns, and nobody is writing that down.

Five measures for the part you can't see

1. Concentration. What share of sales comes from your top ten partners? If it's most of them, you have ten relationships, not a market.
2. Attrition. How many partners that sold in one year sold nothing the next? A quiet exodus doesn't show in a national total until it's late.
3. Leakage. Of the enquiries you receive directly, how many go to a partner, and how many end with a rival? Track the handoff, since that's where interest is lost.
4. Recommendation. Ask partners, in a short call, what they say about you and to whom. You will learn more from twelve of those than from a survey of end customers.
5. Visibility. What can a partner find, in five minutes, to help them sell you? Pricing, specifications, proof, a name to call. If it's thin, they sell something else.

Where it shows up

The pattern is strongest where trust is passed along a chain. Manufacturing and industrial marketing runs through distributors and specifiers. Automotive marketing runs through dealers. Clinics and diagnostics depend on referrers, as in marketing for clinics and diagnostics, and the same is true of healthcare marketing more widely. Financial products sold through advisers share it, as fintech marketing in India describes. How the person making the recommendation forms a shortlist is in how B2B buyers shortlist.

None of this makes website analytics useless. It makes them one voice in a larger conversation. For the demand side of the same problem, see B2B lead generation in India.