When hundreds of managers were asked, “How do you select and prioritize the prospects in your pipeline?” the same answer, and important sales metric, arose time and time again.
That answer: Net Incremental Revenue (NIR).
What is Net Incremental Revenue?
It’s the extra revenue a company generates through a sales channel the average sales strategy wouldn’t – or couldn’t – reach. Some popular examples: social media, business networking, referrals or channel partnerships.
While it’s easy to define what NIR is, it’s more difficult to determine how valuable it can be to an organization.
For instance, a lot of companies agree social media is having a positive impact on their revenue stream, but it’s nearly impossible for them to determine just how significant an impact social media is having.
The biggest contributing factor to NIR is almost always attributed to specific channel partnerships: Strategic alliances with organizations that cater to the same type of prospect, despite the fact they aren’t competitors.
Example: Construction companies and hardware suppliers. One hand washes the other, allowing both to reach and close prospects they otherwise wouldn’t have access to.
The best way to develop a grassroots channel partner program:
- Brainstorm a list of organizations that cater to the same prospects you do
- Determine what the best way to start building a relationship with those companies is, and develop a step-by-step strategy for success, as well as metrics to gauge progress.
Source: “Channel Revenue Management: The Only Metric That Matters,” The Sales Benchmark Index.