Channel Data: Tracking Partner Program Performance
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The document outlines key metrics for evaluating partner program performance across six channel program areas: recruitment, enablement, demand creation, sales performance, adoption, and partner incentives. It emphasizes the importance of tracking both leading and lagging indicators to gain insights into the overall effectiveness of channel programs and to identify areas for improvement. By using a combination of quantitative data and qualitative insights, channel leaders can optimize partner engagement and drive better business outcomes.
Channel Data: Tracking Partner Program Performance
- 1. Research Brief © SiriusDecisions. All Rights Protected and Reserved. 1 Channel Data: Tracking Partner Program Performance Six channel program areas contain the data needed to determine performance The interrelationships between metrics across these areas provide a unique perspective on the capabilities of the program as a whole Examine both leading and lagging indicators for an accurate view of overall effectiveness Editor’s Note: This is the second in a series of briefs about collecting channel data at the partner level, channel program level and addressable market level. As aircraft technology developed during the early decades of the 20th century, a set of six flight instruments soon became standard – air speed, altimeter, turn and bank, vertical speed and heading. While their look and feel has changed, these instruments are still used today by pilots to manage the flight of their planes. B-to-b channel leaders, whether they oversee large multi-tier reseller programs or alliance partner programs, should use standard program metrics to track their progress and detect signs of upcoming opportunities or trouble. In this brief, we describe metrics that can help channel leaders monitor and manage the success of six channel program areas. One: Recruitment Insight into partner recruitment progress is provided by metrics related to partner recruitment goals, partner profiles and conversion ratios by recruitment stage (see the brief “Introducing the Channel Recruitment Waterfall”). • New partner acquisition. To evaluate a channel program focused on identifying a new pool of potential partners and converting them, start by setting a target number of partners – based on the quantity of potential partners that are aligned to the solution, how many of these will be needed to reach revenue goals, and the organization’s capacity to onboard and manage new partners. Compare that target to the number of potential partners attracted and how many of them convert to prospects and actually join the program. • Onboarding engagement. Of the partners that sign up, track those that become active vs. those that don’t, and how long it takes them to become active. A lag may be a sign that the organization needs to develop an activation plan to drive engagement or that it is signing up the wrong partners. As partners go through the onboarding process, it’s important to track the reasons for any dropouts. • Ongoing development. After the first year of the partner lifecycle, continue to track partner development by identifying which partners remain engaged
- 2. Research Brief © SiriusDecisions. All Rights Protected and Reserved. 2 and produce revenue. Leading suppliers review past applications to determine whether qualification guidelines need to be adjusted, and weigh historical partner performance against a capacity plan and recruitment targets to stay on track (see the brief “Partner Capacity Planning: Using Data to Drive Growth”). Two: Enablement Enablement starts once partners sign up for the program and continues beyond the first year as they receive ongoing product, sales and marketing training. Start by tracking metrics that show which partners are fulfilling their enable- ment commitments, and correlate this level of engagement with participation in other activities (e.g. demand creation, product launches, incentives). • Training and certification. A channel program can track the total number of partners committed to the supplier relationship by measuring how they are trained by role type (e.g. sales, marketing, technical sales). Also track early-stage certifications and who is actually taking the training – gaps may indicate partners that are willing to train but need better delivery methods (e.g. on-demand, mobile) due to lack of bandwidth. • Partner types and specializations. Once partners have completed their initial training, track any specialized training by role to determine the success of these programs as partners engage in revenue-related activities. If the program has different types of partners (e.g. distributors, resellers, OEMs), track training by partner type to determine if there are gaps in delivery. • Impact of enablement. Compare training completion metrics to deal size metrics to determine whether training is helping partners upsell prospects. Metrics that show the relative effectiveness of programs and tactics in driving demand (e.g. generating leads, increasing lead velocity) can indicate where more training can make a positive impact. Three: Demand Creation Many metrics can be used to track the effectiveness of partner-led demand creation efforts (see the brief “Navigating Channel Leads Through the Rearchitected Waterfall”). • Marketing effectiveness. Leading channel marketing organizations track their effectiveness at both the tactic level and in terms of contribution to pipeline. At the tactic level, they track how much they spend to generate a qualified lead, and they may separately track automation qualified leads and telequalified leads to determine which is more cost-effective. They also compare partner-generated leads vs. channel marketing sourced leads. To calculate marketing contribution to pipeline, organizations should track the ratio between how much was added to the pipeline and how much was spent on the program. For example, if the program created 100 leads valued at an average selling price of $25,000 and each lead cost $750 to generate through teleservices, then the ratio of marketing’s pipeline contribution to marketing’s program spend would be 33:1. • Lead conversion. As partners interact with marketing during the execution of a marketing play, specific lead conversion metrics can indicate their degree of commitment to service-level agreements and their effectiveness at following up leads. Two conversion rates are especially useful indicators: when marketing hands partners a lead and when they register it in a deal registration system (i.e. the conversion rate between marketing qualified lead and sales accepted lead); and when partners create leads on their own and when they are reported in the pipeline (i.e. the conversion rate from sales generated leads to sales qualified leads). Tracking the velocity of leads in each demand waterfall stage can reveal partners level of engagement in demand generation efforts. • Marketing balance. After developing expertise in delivering partner-led marketing programs, it may be necessary to track the overall costs of these programs. For example, distributor-led programs that target smaller value-added resellers typically require 25 to 30 percent of the lead generation investment in order to communicate to partners about the programs. Otherwise, there is a significant drop in adoption (more than 25 percent) for these programs. Four: Sales Performance Most companies track lagging indicators that show what has been sold, and some are beginning to examine predictive metrics that can spot selling trends within the channel. A com- bination of lagging and leading metrics is required to improve insight into the channel’s capacity to achieve sales goals. • Sales history. Topline sales, sell-in vs. sell-through, and sales by partner type are key to obtaining a broad view of channel selling capabilities. Beyond these standard metrics, channel organizations should look to identify trends by
- 3. Research Brief reviewing year-over-year sales, sales by trained or certified resources, and pipeline volume (a sure measure of reseller activity). • Partner performance. Metrics that can help channel leaders drill down into individual partner performance include total revenue and units by partner, deal-size growth (increased average selling price) and pipeline accuracy (both overall and by partner). • Closed-loop reporting. Gaining a full view of a channel lead generation program’s ROI requires end-to-end metrics. By tying marketing automation platform data to its sales force automation program, channel marketing and sales leaders are beginning to track results for specific campaigns. Campaign source, which describes the origin of a lead, can analyzed in order to see which programs are outperforming others, or which are effective at filling the top of the demand waterfall (e.g. inquiries) vs. the bottom of the waterfall (e.g. sales qualified leads). Five: Adoption Partners engage with suppliers primarily through partner portals and email newsletters sent by suppliers. As suppliers enlist partners into their programs, they direct them to the portal to take learning courses, engage in marketing activities and complete a variety of other actions. Adoption of content and activities on the portal is usually an accurate indicator of success or failure for any supplier initiative. • Portal adoption. Most channel programs track how partners interact with the partner portal and consume its content. This includes reporting on the ratio of users vs. total partners, the ratio of emails opened vs. sent, and visitor behavior (e.g. visits per month, page views per session). • Partner commitments: planned vs. actual. As channel programs evolve, they look for greater commitments from partners, tracking how many partners complete joint business planning, the number of partner sales and marketing resources engaged in the supplier’s program (e.g. by tracking pipeline by rep and content usage), and how many partners have adopted demand creation programs. • Long-term adoption. Long-term adoption metrics track changes in partner mindshare (e.g. how many partners have developed three-year plans, the level of participation and frequency of partner advisory meetings, how much share of wallet the partner has earned through its relationship with the supplier). Six: Partner Incentives The final category describes to what degree partner behavior can be influenced and tracked through the use of incentives. Incentive metrics also illustrate the level of interaction by partners and how easy suppliers make it for partners to engage in the market development funds (MDF) or co-op process © SiriusDecisions. All Rights Protected and Reserved. 3
- 4. Research Brief This content is copyrighted by SiriusDecisions Inc. and cannot be reproduced or shared without prior expressed written permission from SiriusDecisions, Inc. SiriusDecisions is the leading global B2B research and advisory firm. We deliver the actionable intelligence, transformative frameworks and expert guidance that equip executives to modernize and elevate sales, marketing and product performance. SiriusDecisions is based in Wilton, CT with offices in London, Montreal, San Francisco and Waltham, MA. 187 Danbury Road, Wilton, CT 06897 203.665.4000 fax 203.563.9260 siriusdecisions.com • Incentive utilization. Track the quantity and percentage of partners using incentive programs, including data that indicates the level of activity and any early indicators that can show whether the program is succeeding or failing. • Play execution. Once partners claim their incentives, analogous to redeeming airline points, it’s important to track whether the play or marketing activity actually gets executed, which partners are active vs. inactive and ROI by incentive type. These metrics offer insights into usage and execution capabilities that are useful for both supplier and partner. • Process efficiency. Organizations should consider tracking the efficiency of internal processes (e.g. how long it takes them to process claims) as well as partner-facing processes (e.g. the number of partner proposals submitted vs. those approved). They also should look at the amount of unclaimed funds to better understand programs that are favored by partners vs. those that are ignored. The Sirius Decision To create a complete picture of a channel program and its ability to support partner processes and drive partner performance, track metrics for multiple program categories. For example, by tracking metrics for recruitment, enablement and demand creation, suppliers can understand where they need to improve as they add or reduce partners. This end-to-end perspective enables channel leaders to respond as business conditions change either by re-engineering or fine-tuning their programs based on a data-driven, holistic approach.