Why revenue against target explains so little
When a target is missed, there is almost always an explanation, and it is usually somebody else's fault. The customers delayed the decision. They chose another solution. The budget went to a different problem. Each of these can be true, and you cannot check any of them from the revenue line. The number looks the same whether the market is slow or your product has quietly slipped down the distributor's list.
Revenue is also a lagging indicator. A salesperson who stops raising your product in March may not show up in the figures until the pipeline runs dry in the autumn. The conversation then becomes about the result, and the reason is long gone.
What is often behind a missed target
When the market is not the explanation, it is usually one of a few things inside the distributor, and the distributor may not say so. The sales force may have been replaced, and the new people were never properly introduced to your product. Or the team is the same, but it sells what it knows best, because that is where it is comfortable. Your product may have been moved down the priority list without anyone being ready to announce it. Or there is no budget or plan for your product, and nobody knows how to explain that to you.
Sometimes the will is there. Management likes the solution and the salespeople would like to sell it, but changing behaviour is hard. The week fills up with the products they already know, one day follows the other, and nothing happens. Management thinks in years, while the sales force is measured on this quarter, so the two point in different directions.
Take a distributor that always blamed the customers for missing orders. They were slow to decide, the timing was wrong, the budget had moved. The principal accepted this for a long time. It changed only when the principal finally travelled with the distributor's sales manager and sat in the customer meetings. The sales manager was good at taking a customer through a presentation page by page. He was not good at a value-based dialogue about the customer's own problems, which is what decides whether a customer buys something new. The revenue line had said "customers are slow". The customer meeting said something else.
The principal's own part in it was three things. The distributor's real selling capability had never been checked before the start. The new salesperson was not trained, because nobody insisted. And the joint trip was demanded far too late. None of this appears in a revenue report, and all of it was within the principal's control.
Measure the signs that your product has a priority
The useful measures are the ones that show what the distributor's sales force is doing with your product before revenue moves.
Who is selling it. Look for names, not a company. Which salespeople actively work your product, have they been trained, and has anyone left? A change of people is the first thing to check.
A budget, and a sales and marketing plan behind it. A budget on its own is only a number. What makes it useful is a written sales and marketing plan that says what the money and the time will be spent on, and when. The plan is also where you can see whether the distributor is on track. With one, you can check in the first quarter whether the customer visits, campaigns and training that were agreed have actually happened. Without one, all you can do is compare revenue with a target. If there is no budget or no plan, that is the finding, and it is better to learn it in a review than in a missed quarter. This can be checked on day one, before there is any revenue to read, and it is the one thing a signed contract can hide.
The pipeline the distributor builds itself. Count the opportunities, quotes and customer visits that started with their own salespeople, not the inquiries you forwarded to them.
How they sell. Whether the salesperson starts from the customer's problem or from a presentation of the product. You only see this in the room, which is why a joint customer visit is a measurement and not a courtesy. Ask for the first one early.
Reporting. Whether reports arrive, on time, and with something in them. If they have stopped, see what a silent distributor actually means.
Measure your own side as well
A distributor's behaviour is partly a response to yours, so a scorecard that only looks at the distributor is half a scorecard. Four things are worth tracking on your side.
Training of the sales force, not only management. Was training done, how long was it, and did it reach the people who sell? Training that is missing or cut short leaves the salespeople selling what they already know.
Presence. When did you last visit, who did you meet, and have you sat in a customer meeting with their salespeople? It is easier to deprioritise a supplier nobody has met.
Sales material. If the distributor has had to adapt your material, or build its own from scratch, that shows effort on their side and a gap on yours. Note how many versions of your material exist in their hands.
Who you talk to. If communication goes to management, the people who actually sell never hear from you directly. Track your contact with salespeople separately from your contact with management.
What to ignore, or at least discount
Revenue against target is worth keeping, but not as the only measure. Read it next to the signals above.
An explanation without evidence is a hypothesis. "Customers are delaying" is a fair thing to hear once. Ask which customers, what they were quoted, and when you can speak to them.
Management's enthusiasm is not a measure of what the sales force does. A monthly meeting with management shows that the relationship is polite. It does not show that anyone is selling.
A signed agreement is not a plan. A contract shows that both sides agreed to cooperate, and it is easy to read that as a sign that things are going well. In one case a principal did exactly that, when in fact no budget and no KPIs had been agreed. The contract existed, and there was nothing behind it to measure.
Putting it together
One page per distributor is enough: revenue next to five or six of the signals above, from both sides. Read the direction, not the single figure. A distributor with flat revenue, a stable named sales team, a budget and plan in place and a pipeline of its own is in a different position from one with flat revenue whose sales force has changed twice. The first needs patience. The second needs a conversation this month.
It also helps if the distributor sees the same page. A scorecard only you can read looks like surveillance. One you both look at looks like a shared plan.