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It’s all well and good embarking on a partnership. But how will you ever know whether you achieved what you set out to without identifying and analysing important strategic partnership KPIs (key performance indicators)?
Measuring is a vital part of any partnership – it allows you to see what went well and what… well… didn’t! It’s the only way that you can really learn from your previous experiences and move forwards to create many more successful partnerships in the future.
Here, we’ll lay out some KPIs for partnerships that you might just want to consider measuring when it comes to your upcoming collaborations. Enjoy!
KPIs for partnerships
Now, it’s important to note that every partnership is different. After all, partnerships are all created for different reasons and with different goals in mind!
While the role of a strategic partner is largely accepted to be to help you grow your business, this can come in many different forms. You might be after a partner to help you boost brand awareness, to expand to new markets, to improve retention… the list goes on! You can check out more popular strategic partnership benefits in our dedicated blog.
You’ll need to pick a strategic partnership type that will help you to achieve these goals, and similarly, you’ll need to identify KPIs that will help you to measure whether you were successful in achieving them. Remember, success can look very different to different people! As an example, a brand that’s looking to improve retention through a partnership would likely find little value in measuring the number of new leads generated, whereas a brand looking to expand its pipeline would probably make measuring leads a top priority.
All this to say that there’s no one right answer when it comes to identifying strategic partnership KPIs. The key will always be to pick KPIs that can help you to measure whether you’ve achieved your own unique goals through your partnership, whatever those may be.
Having said all that, we can certainly break down some strategic partnership KPIs that could be useful to track – whether or not they’re right for your situation is up to you to decide!
1. Partner-sourced revenue
First things first, you’ll want to take a look at how much revenue your partner is bringing to your business. Partner-sourced revenue is direct revenue that can be 100% attributed to your partners – in other words, deals that wouldn’t exist at all without their help.
If you run a partner programme, you can total up the partner-sourced revenue generated by all your partners combined, to get an idea of what percentage of revenue your partners are contributing to your business. However, it’s also important to separate it out to look at how much each individual partner is bringing to the table – that way, you can see what kinds of partnerships are performing best for your business, and identify any weaker partners who are riding on the backs of others’ hard work.
Typically, partner-sourced revenue will come from ecosystem qualified leads (EQLs) – these are new leads that come directly from partners in your ecosystem. They can be generated through partnerships of lots of different kinds, including direct referrals, lead account mapping and reseller programmes.
When you measure partner-sourced revenue, make sure to measure both new revenue (revenue that comes from a customer’s first purchase) and lifetime revenue (the amount of revenue partner-sourced customers generate over their lifetime). That way, you can get a good idea of how much a partner can contribute both in the immediate term and over a longer period of time.
2. Partner-influenced revenue
Partner-influenced revenue is similar, but this time we’re talking about indirect revenue. That’s revenue from any deal that can be attributed in part to your partners. For example, your partner might have helped you to advance or close an existing deal in your pipeline.
There are lots of different ways that a partner can influence a deal. Your partner might endorse your solution, which could warm a lead up ready for you to convert. A partner might give you a tip that you can use to close a sale. Or a partner might highlight an integration with your product in a meeting with a customer.
These touchpoints should all be recorded so that your partner’s efforts can be tracked and revenue can be attributed correctly and fairly.
Importantly, you should be conscious of looking at a partner’s influence at each stage of the sales funnel. Remember, a partner’s influence can affect customers in many different ways and at many different stages of the sales funnel, so you’ll need to have a clear overview of the whole funnel to understand exactly what kind of influence your partner has had. If you have a partner programme, tallying up these results will help you to gain a better understanding of where partner influence is having the most impact at helping you to generate revenue for your brand.
3. Number of active deals
Another useful strategic partnership KPI is the number of active deals that your partners are pursuing. This will be especially pertinent when it comes to distribution marketing partnerships such as re-selling, bundling and co-selling, where partners are selling your product directly to consumers.
You might wonder why we’ve suggested tracking active deals rather than simply all registered deals. This is because partners will frequently register any little contact they’ve had with a customer as a deal, in order to boost numbers. So, tracking registered deals often won’t give you a true picture of how active these deals are.
Instead, by measuring active deals, you’ll get a better idea of the true scope of opportunity these leads present.
As well as measuring the number of active deals, be sure to measure the average deal size, the average time that deals take to close and the close ratio. By looking at all these factors together, you’ll be able to better tell which partners are delivering the most value and potential to your brand.
4. Number of leads
Many brands choose to embark on a partnership in order to expand their pipeline and ultimately, gain new customers. If this is your goal, an important strategic partnership KPI will be the number of leads generated by your partner – whether that’s through in-person introductions, through helping you to boost demo registrations (for instance by listing your product on their marketplace) or through any other avenue.
But rather than just tracking the number of leads, it’s vital that you look at the quality of these leads too. As part of this, we’d recommend keeping a close eye on conversion rate – how many of the leads provided by your partner have you been able to turn into customers? After all, there’s no point in your partner sending you thousands of leads if none of them ever matures into an opportunity.
In partnership land, this is often measured using a KPI called ‘number of opportunities sourced by partners.’ In other words, how many of the leads generated by your partner mature into unique opportunities?
Another similar KPI for partnerships is ‘number of opportunities influenced by partners.’ This KPI refers to all those leads you and your team were able to mature to the opportunity stage with the help of your partners. These could be leads you already have in your pipeline but that your partner helps you to push over the line – for instance by sharing key information with you about a lead’s stakeholders.
5. Cost of partner-sourced customer acquisition
Strategic partnerships can be a great way to source new customers. But if this is your goal, it’s crucial that you measure how much it costs you as a brand to acquire new customers through your partner.
There are lots of different ways of acquiring new customers, from paid ads to SEO. You’ll want to understand whether acquiring new customers through your partners is more or less cost-effective than your other methods of partner acquisition. In this way, you can gain a better picture of how worthwhile or efficient your partnerships are at helping you to achieve this goal.
Having said that, don’t forget to look at this alongside other metrics, such as how much revenue customers acquired through your partners bring to your business. It’s obviously ideal to keep your customer acquisition costs (CAC) as low as possible. But equally, if customers acquired through your partners bring in a lot more revenue than customers acquired through other channels, a higher CAC may still be worth it.
Of course, this is all part of measuring your partnership’s overall return on investment (ROI).
KPIs for partner programmes
So, those were some key stats for measuring the effectiveness of your partnerships. But what happens if you run a partner programme? Are there any specific KPIs you should be keeping an eye on?
Well, any of the metrics we’ve mentioned above can be tallied up across all the partners partaking in your partner programme, so that you can get a clear idea of how your programme is performing as a whole. For instance, it can be very useful to know your average cost of partner-sourced customer acquisition. That way, you can make more general decisions about your partnership strategy and easily identify partners that are consistently underperforming. The same goes for all the other KPIs we’ve identified.
However, there are a few other metrics you’ll want to look at when you’re growing a partner programme – to do not with the financial side, but with the performance and longevity of your programme itself. After all, just like your product and your customer service team are centred around creating a great experience for your customers, your partner programme and partnerships team should be centred around doing the same thing for your partners!
Only by creating happy and engaged partners can you ensure your partnership programme thrives and brings your business everything you hope for. Here are some KPIs you’ll probably want to prioritise.
1. Number of partners
First things first, you’ll probably want to keep count of how many partners join your partner programme. This can be a really useful measurement to demonstrate your programme’s popularity to investors and key stakeholders in your business! It’s also a stat you’ll often see quoted on the ‘partnerships’ page of many brands’ websites – think ‘We have 500 partners in the UK’ type vibes!
Now, this can be a good KPI in many ways. If you’re looking to scale your partner programme, setting yourself a goal for the number of new partners can help you to understand whether you’re achieving your aims. And, as we’ve mentioned already, it’s a good marker of popularity and a stat you can easily bandy around to your benefit!
Having said all that, it’s important to note that this strategic partnership KPI is not a measure of quality, or of performance.
You’re likely to find that most of your revenue comes from just a handful of your most successful partners. In fact, 80% of sales generated from affiliate marketing are made by just 20% of affiliates (according to Practical Ecommerce)! Similarly, you could easily have hundreds or even thousands of partners signed up to your partnership programme, but if none of them are active, they’re not going to be much help. Which brings us onto…
2. Activation rate
Your partnership programme’s activation rate refers to how many of those who join your programme actually show signs of activity after signing up. It’s an important measurement because to start seeing revenue from your programme, you’ll need active partners – if you find your activation rate is low, you could try a range of incentives and tactics to improve it.
Most partnership programmes define partners as ‘active’ once they’ve made one successful referral or sale. However, there are no rules and you’ll need to decide for yourself what makes a partner truly ‘active’ or ‘inactive.’
For instance, you might find that the drop-out rate is really high after a partner’s first sale, but that it increases hugely after their second or third. Have a look for patterns within your partner programme and consider how you’re going to define an active partner.
Either way, it’s probably going to be worth looking at this KPI alongside others, such as drop-out or retention rate. Measuring the time to a partner’s first sale is also key. The faster you can help new partners to make their first sale, the more likely they are to stay around and drive long-term revenue for your brand.
3. Partner satisfaction
We bet your brand already measures customer satisfaction. But does it measure partner satisfaction too? If not, it should!
By measuring partner satisfaction within your organisation, you’ll be able to gain valuable insights into how your partners perceive different elements of your partner programme – from communication methods to remuneration, attribution methods and more. And you’ll be able to gain a deeper understanding of how they perceive their overall relationship with your brand.
By finding out what you’re doing well and where you have room for improvement, you’ll be able to make changes to your partner programme for the better. In turn, this could result in more signups, better retention and better partner engagement in the future.
When it comes to partner satisfaction, most brands send some kind of yearly survey to their partners. Often, this has a Net Promoter Score format, which makes it easy to gain an overall understanding of your partners’ level of satisfaction. That said, if you want more detailed feedback on specific elements of your programme, you could also send out anonymous surveys with open-ended questions or hold in-person discussions or meetings – or a mixture of lots of different methods!
On a slightly different note, it can also be worth measuring customer satisfaction in relation to their experiences with your partners – especially if you have partners that interact or sell directly to your customers (such as re-sellers). This will allow you to check that you don’t have partners that are creating unhappy customers or that are damaging your brand’s reputation.
4. Partner engagement
Not many brands bother to collect information about partner engagement, let alone analyse it. But the more engaged your partners are, the faster and more they’ll grow. So, it’s an important KPI to keep in mind.
Partner engagement can encompass all sorts of activities, but ultimately, it’s a measure of how involved and interested they are in your partner programme. Signs of engagement that you’ll want to track include things like downloading resources, attending your events, taking training, reading your blogs, responding to your emails quickly… the list goes on!
These actions all take place online, so they should be easy to track and measure – easier than measuring profitability, that’s for sure!
Once you have information about which of your partners are the most engaged, see if you can draw out some helpful patterns. For example, you might find that some partner types are more likely to be engaged than others, which could help you to narrow down your focus when recruiting in future. Or, you might find that an action you’ve undertaken has resulted in more engaged partners – such as giving new partners a personal phonecall before they start the onboarding process.
5. Year-over-year growth
Of course, one of the KPIs you’re likely to place a strong emphasis on is your partnership programme’s growth. It can be tempting to compare one month to the previous month when you’re looking for spikes and drops, but remember that seasonality can be a big factor for many partners – numbers can easily fluctuate from month-to-month.
Instead, compare the current month with the same month in the previous calendar year. That way, you’re accounting for any seasonality and you can get a much clearer picture of how your programme is performing.
But how exactly do you measure growth? Well, there are a number of KPIs you’ll want to use to give you an overall idea of whether your programme is growing as quickly as you’d like it to, and in the right ways. Depending on what kinds of partners you’re working with, these might include:
- Deal size
- Number of active partners
- Partner satisfaction
… the list goes on! Ultimately, any KPIs you’re currently measuring should be compared to previous years where possible. This will enable you to understand whether the efforts and changes you’ve been investing in since last year before have yielded the results you hoped!
As you can see, there’s a whole range of strategic partnership KPIs out there that you can track and analyse to help you level up your partnerships. But remember that partnerships can be formed for many different reasons. Ultimately, the most important thing is to take stock of your own unique goals and identify KPIs that can help you to measure how fully you’ve managed to achieve them through your collaborations.
Now that you know what to measure, there’s just one thing left to do: find more fantastic strategic partners to help you achieve your objectives! If that sounds good to you, make sure to book a demo with Breezy. We can’t wait to show you how our partner discovery engine can help you find hyper-relevant partner prospects (way!) more quickly and easily.