Want to improve your distribution channels? Start by benchmarking their performance. Here's how you can do it:

• What is benchmarking? Comparing your distribution performance to industry standards to find strengths, weaknesses, and areas to improve.

• Key benefits: Boost efficiency, cut costs, and improve customer satisfaction.

• Metrics to track:

  • Sales: Revenue, market share, sales growth, and average order value (AOV).

  • Efficiency: Inventory turnover, order fulfillment time, and cost per order.

  • Customer success: Net Promoter Score (NPS), retention rate, and delivery accuracy.

• Data sources: Use ERP systems, warehouse data, market research, and customer feedback to collect actionable insights.

• Steps to improve:

  1. Analyze performance using key metrics.

  2. Compare results to industry benchmarks.

  3. Create a plan with clear goals, resources, and timelines.

  4. Track progress regularly and adjust benchmarks as needed.

Quick Tip: Start with small, easy improvements and scale up as you refine your strategy. Regular reviews and updates will keep your channels competitive and efficient.

Supply Chain Benchmarking - The What, Why and How

Key Performance Indicators for Distribution

Key distribution KPIs are grouped into three main categories:

Sales Metrics

These metrics focus on revenue and market share:

• Revenue and Market Share by Channel: Evaluate performance across different sales channels.

• Sales Growth Rate: Track year-over-year growth in sales.

• Average Order Value (AOV): Calculate the revenue generated per transaction.

• Product Mix Performance: Identify which products perform best in specific channels.

Efficiency Metrics

Operational efficiency plays a crucial role in profitability. Key metrics to monitor include:

Customer Success Metrics

Customer satisfaction is essential for long-term success. Keep an eye on these indicators:

• Net Promoter Score (NPS): Gauge customer loyalty and satisfaction.

• Customer Retention Rate: Measure the percentage of returning customers.

• Order Accuracy: Assess how often orders are fulfilled without mistakes.

• Delivery Time Performance: Compare actual delivery times to promised ones.

• Return Rate: Monitor the percentage of products returned, broken down by channel.

These KPIs provide a clear framework for analyzing performance and identifying areas for improvement. They help ensure your distribution strategy is data-driven and aligned with your goals.

Data Collection Methods

Collecting data from various sources is crucial for analyzing and improving distribution channel performance.

Company Data Sources

Tap into these internal systems for detailed metrics:

Enterprise Resource Planning (ERP) Systems

• Sales transactions

• Inventory movements

• Distribution costs

• Order processing times

Warehouse Management Systems (WMS)

• Pick and pack efficiency

• Storage utilization

• Labor productivity

• Shipping accuracy

Combining ERP and WMS data provides a solid foundation for internal benchmarking.

Market Research Data

External market data helps you compare your performance with industry standards and uncover areas for improvement. Here are some key sources:

Customer Feedback

Customer feedback highlights issues in your distribution process and provides actionable insights:

• Post-delivery surveys

  • Delivery confirmations

  • Customer service interactions

• Quality assurance calls

  • Social media comments

  • Mobile app reviews

• Distribution center audits

• Channel partner evaluations

Automating feedback collection at key points in the distribution process allows you to track both quantitative data (e.g., delivery times, order accuracy) and qualitative insights (e.g., customer satisfaction).

Update dashboards and analyze data monthly to spot trends early and refine your strategies accordingly.

Performance Analysis

Performance analysis turns collected data into actionable strategies that help improve operations.

Industry Standards Comparison

Compare your performance with industry benchmarks in areas like order fulfillment, delivery times, cost efficiency, and inventory management. Tailor your goals based on your market conditions and business size.

Identifying Weaknesses

Find underperforming areas by analyzing data trends and comparing performance across different channels:

• Data Analysis
  

  Look at 6–12 months of performance trends to pinpoint weak areas. Pay attention to seasonal patterns that might affect results.

• Channel Comparison
  

  Evaluate how different channels perform. This includes assessing cost-effectiveness and customer satisfaction for each channel.

"Clear benchmarks across 7 essential growth drivers, Defined, measurable outcomes, Actionable strategic roadmap based on prioritized findings" – Uncommon Insights

Turning Weaknesses Into Actions

1. Focus on Quick Wins
   

   Start with changes that require minimal effort but deliver strong results.

2. Set Clear Goals
   

   Define measurable, time-bound objectives for each improvement area.

3. Build a Plan
   

   Your plan should include:

   • Assigned responsibilities and allocated resources

   • Milestones with timelines

   • Metrics to track success

Once weak points are addressed, regular monitoring and adjustments based on data will keep your strategy on track. Clear action steps set the foundation for ongoing progress.

Improvement Plan Creation

Use your performance analysis to create a focused plan that tackles the gaps you've identified. This plan should include setting clear goals, allocating resources, and defining timelines to improve distribution outcomes. The goal is to turn data insights into practical steps that boost channel performance.

Performance Goals

Set specific, data-driven targets that align with your distribution benchmarks. Focus on metrics that directly influence performance.

For instance, Your Tea achieved a 28% revenue increase and a 14.5% improvement in conversion rates by conducting in-depth customer research and simplifying their product discovery process.

Once your goals are set, ensure you allocate the right resources to meet them.

Resource Planning

Support your performance goals by addressing both immediate and long-term needs:

• Team and Budget: Assign specific roles and allocate financial resources for each initiative.

• Technology: Identify the tools and systems required to support your efforts.

• Training: Plan for skill-building and knowledge-sharing sessions to equip your team.

"Joel and his team rolled up their sleeves and helped us implement real solutions. Our team feels more motivated and confident." - Craig, Head of Operations, Peek Pictures

Implementation Schedule

Create a roadmap spanning 6–18 months to ensure steady and measurable progress:

1. Initial Phase (Months 1–3): Start with quick wins by auditing current performance and establishing baseline metrics.

2. Development Phase (Months 4–9): Roll out core improvements and track results. For example, Liquor Loot used this phase to develop high-margin seasonal products and implement pre-sale strategies.

3. Optimization Phase (Months 10–18): Refine your strategies based on the performance data and market feedback.

Regular monitoring ensures your efforts stay aligned with efficiency and customer satisfaction goals, ultimately driving better channel performance.

Progress Tracking

Progress tracking turns benchmarking data into actionable steps for continuous improvement. By identifying patterns and making data-based adjustments, you can stay on course toward your goals.

Regular Reviews

Set up a structured system for performance reviews to keep your team focused and accountable. These reviews should tie daily activities to your broader objectives.

Regularly scheduled reviews provide a clear path for refining benchmarks and driving consistent progress.

Benchmark Updates

As markets shift and customer preferences change, it’s essential to revisit and update your benchmarks. Your targets should align with the current environment while remaining ambitious yet realistic.

Key factors to consider when updating benchmarks:

• Market Growth Rate: Adjust targets based on industry expansion or contraction.

• Competitive Landscape: Reassess standards as new competitors emerge or existing ones evolve.

• Technology Changes: Update efficiency goals when implementing new tools or systems.

• Customer Expectations: Adapt service benchmarks to match shifting customer needs.

Incorporate these updates into a cohesive strategy to stay aligned with market demands and maintain progress.

Long-term Improvement

Building on regular reviews and updated benchmarks, focus on systems that support ongoing growth rather than one-time wins. Sustainable improvement is key.

Strategies to consider:

• Conduct periodic business health checks to compare financial performance against benchmarks.

• Use cohort-level tracking to analyze how customer value develops over time.

• Audit marketing campaigns to ensure channel spending delivers optimal results.

• Create detailed, data-driven roadmaps to prioritize growth initiatives.

These steps ensure your efforts lead to steady, measurable progress over time.

Conclusion

Main Steps Review

Benchmarking involves a clear sequence: selecting KPIs, gathering data, analyzing performance, and planning actionable improvements. This approach helps evaluate sales, operational efficiency, and customer success metrics against industry benchmarks, pinpointing areas for improvement and crafting specific strategies to close any gaps.

Incorporating benchmarking into your strategy can make a noticeable difference. By consistently monitoring and adjusting benchmarks, you can keep your distribution channels competitive and efficient.

Next Steps

To put channel benchmarking into action, follow these steps:

• Conduct a Growth Audit
  

  Review the unit economics, product lifetime value (LTV), and contribution margins of your distribution channels across various customer segments.

• Create an Implementation Timeline
  

  Develop a roadmap spanning 6–18 months, focusing on opportunities with the greatest potential impact.

  "The guidance we got was practical and straightforward. We've expanded faster than we imagined, thanks to their no-nonsense approach."

  • Alison, Managing Director, Atlas Growers

• Establish a Measurement Framework
  

  Use structured metrics to track progress effectively:

  Timeframe	Focus Areas	Key Metrics
  Short-term	Channel efficiency	Conversion rates, fulfillment speed
  Mid-term	Customer value	Product LTV, cohort performance
  Long-term	Market position	Revenue growth, market share

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