13 Strategic Partnership KPIs You Need in 2023
No partner program is perfect from the get-go. You need to systematically track performance to improve its effectiveness. It’s not possible to just launch a program with a hands-off approach— success doesn’t happen on its own. Whether you are scaling up an existing program or, tracking and measuring the right partnership KPIs, or Key Performance Indicators, will help you build and grow an effective, profitable partner program.
Why measure? You might ask. For starters, it will help you steer your resources to the most profitable sales channels. It also allows you to identify areas that need improvement, which helps you plan your activities and finances accordingly. What’s more, it is the only way to align your strategic partnerships and internal teams for optimal performance and results.
The Challenge of Generating Partner Program KPIs You Need
Regrettably, a significant number of businesses remain oblivious to the critical strategic KPIs that should be at the forefront of their tracking efforts. Whether due to a lack of awareness or the absence of appropriate automated tools, many companies find themselves struggling with this fundamental aspect of strategic partnership management. What's even more concerning is the existence of organizations that limit their assessment to merely scrutinizing revenue figures, neglecting a cut down of other indispensable metrics that paint a more comprehensive picture. This narrow perspective can cast a shadow over the overall health and quality of their partnerships, potentially leading to misguided strategies and missed opportunities.
In truth, the path to successful partnerships is illuminated by data-driven insights. Without a robust system for monitoring partnership metrics, you risk squandering valuable time and resources on ventures that may not yield optimal results. To steer your partnership program towards greater efficiency and effectiveness, it's essential to recognize and harness the power of these strategic partnership KPIs.
As we delve into 2023, we present the top 13 strategic KPI examples that you need to diligently track and measure in order to reach a more fruitful and rewarding partner program landscape.
Partner Program KPI #1: Number of Partners
This one is a no-brainer. The number of partners – existing and new – is the first and most obvious sign that your program is growing. It also helps establish your program in the business landscape, especially during the initial stages.
Moreover, it testifies to the effectiveness of your recruiting strategies and indicates whether the program has the right ingredients that appeal to and attract partners. The number of new partners joining the program is also proof that your promotional efforts are reaching the prospects and addressing their priorities. It might say a thing or two about how attractive your initial offering is.
According to the State of the Partner Ecosystem report, partner numbers are a highly relevant KPI for SMEs in the early stages of growth and channel maturity. If you belong to this category, there are many ways you can increase the number of partners–identifying your ideal partner persona, offering attractive deals, and developing a scalable partner ecosystem.
Partner Program KPI #2: Partner Types
Another major partner program KPI you should track and measure is the type of partners. You must categorize and track partnerships based on the status, nature of association, and location, for each reveals pivotal insights about your program.
- Partner Status: Make sure to keep track of partners by their current status. For instance, how many active partners do you have? How many are being recruited and onboarded? What’s the number of new prospects you have identified? These numbers will tell how successful your recruitment and activation strategies are.
- Nature of Association: Similarly, you must categorize partners based on the nature of association – Value-Added Resellers (VARs), co-sellers, technology partners, referrals, service partners, independent software vendors, and the like. It will help you assess where in your strategy each partner type fits so that you can focus on those who drive the most value.
- Partners by Location: Tracking partners by location is also essential while measuring the effectiveness of the program. It enables you to evaluate your global footprint and helps assess how effective your partner strategy for each region is.
Partner Program KPI #3: Onboarding Completion Rates
From a vendor or partner perspective, there are several factors that go into onboarding a new partner or line. The best onboarding programs include a promise to review at 30, 60, and 90 days, as well as a timeline for each major milestone against which progress can be objectively reviewed. In addition, your program needs to measure whether or not your partners are completing onboarding.
If a disproportionate number of your partners aren't completing onboarding, there could be a problem with your onboarding strategy. Instead of bombarding your affiliates with unnecessary facts during the onboarding process, you should entice them with messages that maintain excitement. You should also tailor onboarding to the target audience and partner type.
Partner Program KPI #4: Total Revenue Generated by Partners
Revenue, perhaps, is one of the most fundamental channel partner performance metrics to track in any partner program. After all, increasing revenue has been one of your key objectives, right? Measuring it, however, is more challenging than you think–you must take into account two types of revenues:
- Partner-sourced Revenue is the direct revenue generated by a deal sourced by a partner. That is, the partner brings in a new lead (ecosystem-qualified lead) into your sales pipeline–there would be no deal if not for the partner.
- Partner-influenced Revenue refers to the indirect revenue partners generated by helping you make or close a deal. In other words, they initiate or accelerate it, but your sales team closes the deal.
Measuring these types of revenue metrics is easier said than done, though. Often, there are challenges related to deal ownership and attribution. Two or more partners may register the same deal on the same day, or there could be channel conflicts between partners and your sales team about who gets the credit for a closed deal.
You must pay extra care while tracking revenue since it is one of the top indicators of successful partnership programs. Here is where PRM tools and software such ascome to your aid. Such tools help you register deals and track revenue with the highest levels of accuracy.
Partner Program KPI #5: Total Commission Given to Partners
Partner commission is a KPI that helps evaluate whether the program is profitable to both parties involved. Sometimes commissions can make up quite a significant chunk of expenses. However, it tends to be more cost-effective than many sales or marketing efforts because it generates real, qualified leads. Partners also bring in customers that tend to stay longer because they have another personal connection to your company.
The total commission distributed to partners gives you a better understanding of partner profitability–that is, whether the margins are good enough to keep them active and interested in the program. The better the commission, the happier the partners and the lower the attrition rates will be.
Partner Program KPI #6: ROI of Partner Program
This is another no-brainer, but surprisingly many companies don’t know the ROI of their program mostly due to their difficulty to track leads and commission. The Return on Investment compares the financial returns of the program against the costs of running it. While calculating the total cost, one must factor in commission, marketing fees, advertising campaigns, and other related expenses.
ROI helps companies determine the effectiveness of their marketing efforts and campaigns. It is also a clear indicator of whether you are ready to scale–when your partner program reaches positive ROI, you know it’s time to take the next step. Furthermore, it throws light on whether a partner is profitable as an affiliate, referral, or reseller.
Tracking ROI is a challenging and complex task because of all the data that is required to calculate it. However, tracking the ROI is the only way to align internally on where to invest more efforts to grow in the most efficient way possible.
Partner Program KPI #7: Leads Created
According to the latest reports, "leads generated by partners" tops the list of the most common KPIs in 2022. Leads can come from several sources in a partner program, including referrals, channel partners, tech partners, and others. Though many of these leads don’t turn into opportunities or revenue, they still are crucial opportunity metrics that reveal a lot about the effectiveness of your partner program.
For instance, if your partners are not bringing new leads, it could indicate that the partnership is not working. Or, it could give you some insights into the sales process of your partners. By tracking leads, you can identify partners who generate and convert the maximum number of quality leads, helping you narrow down the partnerships in which you should be investing.
Partner Program KPI #8: Deals Generated and Distributed
The number of deals generated by partners and distributed to partners is a strong indicator of successful partnerships. Keeping a close track of these metrics is one of the best ways to gain financial visibility, analyze your partner’s pipeline, predict sales, and forecast revenue. It will also help you better align the efforts of your partners, marketing team, and sales team.
Remember, it is not enough to measure the deals registered by partners. You must also track the average deal size and average closing time along with deal volume. Conversion rates are also critical – you can measure the total number of registered deals against closed deals to determine the conversion rate. Poor conversion rates might point toward the gaps in the customer journey, which you must rectify to improve sales.
Being able to view the number of deals generated gives you insights into your sales processes, points to improve, and the overall success of your program.
Partner Program KPI #9: Partner Marketing Effectiveness
Building successful channel partner relationships requires effective partner marketing campaigns. Partner marketing programs can help you grow your audience, expand and develop quickly if managed and measured properly.
Partner marketing is a different task than corporate marketing and shouldn't be treated or evaluated in the same way. Unfortunately, many vendors fail to distinguish between these two tasks and offer partner marketing plans that either fall short of expectations.
Partnership marketing KPIs are quantifiable metrics that you can use to verify that your approach is successful and that your goals are being met. These include:
- Reach: The total number of people who see your content.
- Engagement: How your partner handles your material. Based on this idea, it's possible to track and keep track of how your partners interact with the materials you have uploaded to the site.
- Adoption: To market your items, you need to provide marketing material. You can be sure that your partners aren't making sales calls if they don't use the material provided to them. It could be they don't think the material is not appropriate or relevant. If they’re not adopting the material, it's a good idea to ask to get a better idea of why.
Although it can be difficult, calculating the ROI of partner marketing initiatives isn't impossible. PRM software can help you and position you for success if your internal staff is struggling to manage KPIs.
Partner Program KPI #10: Pipeline Summary
A pipeline summary, or the number of deals and their value at each stage of the sales process, is a critical partner program KPI you must track to predict future revenue. It gives you insights into two things: at what stage of the sales process your prospects are in and how many of them are likely to close deals. With these insights, your sales team can forecast revenue with the highest possible accuracy.
It can also give you actionable data on how prospects behave at each stage of the pipeline. How many of them skip one or more stages? What is the average they spend at each? How many opportunities do you need at each stage to hit your target? Such details inform the decision you must take at each stage to increase the close rates.
Partner Program KPI #11: Partner Performance
Measuring partner performance is integral to optimizing your partner program. You must identify the top performers so that you know who to invest in to drive more value to you and your clients. By identifying high-value partners, you can also strategize to enhance the joint value proposition.
You must also measure the performance of individual partners against the revenue, leads, and deals each generates. Similarly, partner engagement is another vital area you need to measure periodically– partner logins, activities and attendance, and marketing activities are all pivotal here.
Here’s an example from Kiflo, for instance, of stats you can get on each partner:
Partner Program KPI #12: Partner Satisfaction
Your company probably already captures customer satisfaction. But does it also take into account the satisfaction of its partners? If not, it should!
When you track partner satisfaction at your company, you learn a lot about how your partners feel about different aspects of your program, such as communication strategies, compensation, attribution techniques, and more. You'll also learn more about how people view their interaction with your brand overall.
It's never a good idea to assume that your partner base will stay the same from quarter to quarter because your competition is constantly evolving. This knowledge is important so you can target your marketing and sales efforts to get the best results.
Most companies send their partners an annual survey to determine their satisfaction. You could use the Net Promoter Score method, for example, which can easily give you an idea of how satisfied your partners are overall. However, if you want more detailed data on specific program components, you can also send out anonymous surveys with open-ended questions, host in-person meetings or discussions, or use a combination of many different methods.
Partner Program KPI #13: Performance of Resources
The performance of resources is an essential metric most companies tend to ignore. When partners join the program, you provide them with a set of resources to prepare them to engage with customers. Measuring the usefulness of these resources is integral to ensuring partner program success.
For instance, technical training is a resource every company typically offers their partners for sales enablement. Some other vital resources include:
- Training resources
- Sales scripts, docs, and presentations
- Marketing assets
- Partner portals with updated news
All your partners must be able to rate these resources so that you can see which ones contribute to the value and worth of the program and which ones need improvement. Tracking the effectiveness of resources is also one of the best ways to keep them updated based on the changing nature of the program and the target market.
The saying that "you cannot improve what you don't measure" resonates strongly with our belief in the pivotal role of KPIs. In the realm of partnership programs, the act of measurement is crucial to shining a spotlight on the path to growth and optimization. Think of KPIs as the compass that guides you through the often complex landscape of partnership management. They provide you with tangible, quantifiable insights that help you gauge the effectiveness of your efforts. However, it's essential to understand that not all KPIs are created equal. For instance, in the embryonic stages of your program, the number of new partners is a pivotal KPI, as it indicates your ability to attract fresh talent to your ecosystem. Yet, as your program matures and expands, the metrics you focus on must evolve in tandem.
As your program blossoms, it's the more sophisticated KPIs like revenue generation, lead generation, the number of closed deals, and the value of an active sales pipeline that begin to take center stage. These metrics reflect the culmination of your partnership efforts, showcasing tangible outcomes that not only bolster your program but also contribute significantly to your organization's bottom line. In essence, KPIs metamorphose from simple growth indicators into multifaceted barometers of success.
It's important to remember that the effectiveness of your measurement efforts hinges on the tools you employ. Investing in the right partner management platform is the linchpin of your ability to successfully measure and harness the full potential of your partner program metrics. A robust platform not only streamlines the data collection process but also provides in-depth analytics and reporting capabilities, enabling you to extract actionable insights. With the right tools at your disposal, you can ensure that your partnership program not only thrives but continuously adapts to the changing landscape, always staying one step ahead in the pursuit of growth and optimization.