Peter Drucker once famously said, “What gets measured, gets managed,” highlighting the importance of measuring business activities, compelling the business to focus and alter directions or stay the course when necessary. This is true regarding the engagement between vendors and their partners, where the partnership is more than just a business transaction; it’s the cornerstone of growth and sustainability. These relationships develop through mutual understanding and shared goals. But how do we measure the strength and depth of this engagement? The answer lies in engagement metrics, a set of tools that provide insights into the health of these channel relationships. We asked a few channel leaders to share with us what metrics they measure and why they matter.

Metric 1: Sales Performance Metrics

It will be a surprise to no one that sales performance metrics are the most visible and telling indicators of partner engagement. These metrics, which include tracking sales figures, growth rates, and partner revenue contributions, offer a comprehensive view of partner engagement and performance.

For instance, Desraie Thomas, Channel Chief at Aportio, highlights the critical role of managing churn, especially during new product launches. She states, “Our goal is to achieve NEGATIVE CHURN – a state where we consistently enhance value for our customers.” This approach goes beyond merely reducing churn; it’s about actively improving customer value, directly impacting sales performance.

Adding another layer to this discussion, Joseph Landes, CRO of Nerdio, points out the significance of revenue composition in assessing partner performance. Nerdio primarily serves managed service provider (MSP) partners, so the metrics Landes measures are specific to that business model.  “I would say that a percentage of an MSP’s business derived from recurring cloud revenue [is important to track]. We know that recurring cloud revenue is the most valuable revenue an MSP can possibly have. First, it is recurring, so they are being paid for it each month. But then it is also cloud revenue, which is innately much more valuable than on-prem revenue and certainly more valuable than services revenue alone,” he explains. 

The sales metrics that are most crucial will vary depending on the vendor’s business model, market share, technology, and partner type, but here are some of the most common:

• Sales Growth: This measures the increase in sales over a specific period. Consistent growth in sales is a strong indicator of an engaged and effective channel partner.
• Average Deal Size: This metric helps to understand the average revenue generated per sale. A larger average deal size may indicate a partner’s effectiveness in selling more comprehensive solutions or higher-end products.
• Lead Conversion Rate: The percentage of leads that convert into actual sales. A high conversion rate suggests that the partner is effective in moving leads through the sales funnel.
• Customer Acquisition Cost (CAC): This metric assesses the cost involved in acquiring a new customer through a channel partner. Lower CACs can indicate more efficient and effective partner engagement.
• Product Mix: Analyzing which products or services are being sold by the partner. A diverse product mix or a focus on high-margin products can be a sign of a strategic and engaged partner.
• Sales Cycle Length: This measures the time taken from initial contact to closing a sale. A shorter sales cycle may indicate higher efficiency and effectiveness in the sales process.
• Market Penetration: This metric looks at the extent to which a product is recognized and purchased in a particular market segment. High market penetration can be a sign of an effective channel partner.
• Customer Satisfaction and Retention: High levels of customer satisfaction and retention are indicative of an engaged partner who not only sells but also ensures customer satisfaction post-sale.
• Profitability per Sale: This metric looks at the profit margin on each sale. It’s important to consider not just the volume of sales but also how profitable those sales are.

Metric 2: Partner Satisfaction and Feedback

Our experts highlighted partner satisfaction as a critical measure that helps vendors understand how their partners perceive and value their relationship. Partner satisfaction is a multifaceted metric, reflecting various aspects of the partnership, including support, communication, profitability, ease of doing business, and overall satisfaction with the products and services offered. 

For instance, Debbie Kestin-Schildkraut of Kestin Impact Consulting points out that partner satisfaction is crucial and can vary depending on the company’s goals. These scores are vital indicators of long-term partnership health. “Partner metrics that matter… would focus on the uptake and adoption of new products or services,” Kestin-Schildkraut explains, since logic says the more satisfied and engaged a partner is, the more they’ll sell. 

Partners should also be encouraged to participate in satisfaction reviews with their end-user customers. Consider the following methods:

• Surveys and Feedback Forms: One of the most direct methods to measure partner satisfaction is through surveys and feedback forms. These tools can be used periodically to gauge partner sentiment. Using rating scales (1-5 or 1-10), open-ended questions, and Net Promoter Score (NPS) can provide comprehensive insights.
• Partner & Customer Forums and Roundtables: Hosting forums or roundtable discussions provides a platform for partners to voice their opinions and experiences. These settings encourage open dialogue and can reveal insights not captured in structured surveys. They also help in understanding the nuances behind the feedback.
• Partner Support Interactions Analysis: Analyzing interactions with partner support, such as response times, resolution rates, and the nature of support requests, can provide valuable information about partner satisfaction. High numbers of repeated issues or complaints can be indicators of dissatisfaction.
• Benchmarking Against Competitors: Comparing your partner’s satisfaction levels with industry benchmarks or competitors can provide context on where your organization stands and areas for improvement.

Metric 3: Training and Certification Completion Rates

In the channel, training and certification play a key role. These programs equip partners with the necessary skills and signal commitment and engagement. High completion rates of training programs correlate directly with improved sales performance and product expertise. This metric is a testament to a partner’s dedication to growth and excellence in the field.

Building on the importance of training and certification, it’s crucial to measure the effectiveness of these programs. Metrics related to training uptake, content relevance, and knowledge retention can provide valuable insights into how well your partners are being prepared. Tracking these metrics allows you to identify areas where training might be falling short and areas of strength that can be further leveraged. For instance, monitoring post-training performance can give a clear picture of how effectively the training translates into real-world skills and sales competence.

Additionally, certification levels among channel partners can serve as a benchmark for their expertise and commitment. Partners who invest time and resources in obtaining higher levels of certification are likely to be more engaged and better equipped to sell and support your products. Certifications also often come with tiers or specializations, reflecting a partner’s specific areas of expertise and their depth of knowledge about your offerings. This differentiation not only empowers partners but also helps you in segmenting and strategizing your channel partner program more effectively.

Examples of KPIs to track in training and certification include:

• Completion Rates of Training Programs: The percentage of enrolled participants who complete the training programs.
• Certification Levels Achieved: The number and tier of certifications earned by partners.
• Average Time to Complete Training: How long it takes, on average, for partners to complete training courses.
• Post-Training Assessment Scores: Scores or grades achieved in assessments following training sessions.
• Training Feedback Scores: Satisfaction ratings given by partners on training content and delivery.
• Retention of Trained Partners: The rate at which trained partners remain active and engaged over time.
• Application of Skills in Sales Context: Measurable impact of training on sales performance or problem-solving in real scenarios.
• Number of Trained Personnel per Partner: Reflects the depth of training penetration within each partner organization.
• Training Refresh Rate: Frequency with which partners update or renew their training and certifications.

Metric 4: Marketing and Lead Generation Metrics

Effective co-marketing efforts are a hallmark of robust partner engagement. Key marketing metrics like lead generation and conversion rates offer insights into the effectiveness of these joint efforts. Active participation in co-marketing initiatives enhances brand visibility and demonstrates a partner’s partner’s commitment to mutual growth and success. 

Delving deeper into marketing and lead generation, it’s important to analyze the quality and quantity of leads generated through these co-marketing efforts. Quality leads are more likely to convert, indicating that the marketing messages and channels are well-aligned with the target audience. On the other hand, a high volume of leads might not always translate into sales if they are not of high quality. Therefore, assessing both aspects provides a balanced view of the marketing effectiveness. Furthermore, tracking the source of leads can help in understanding which marketing channels and strategies are most effective, enabling a more focused and efficient allocation of marketing resources.

Additionally, the engagement metrics of marketing campaigns reveal much about the effectiveness of the content and strategy used. Metrics such as open rates, click-through rates, and social media engagement can indicate how compelling and relevant the marketing content is to the target audience. High engagement rates often correlate with better brand recognition and lead quality. It’s also beneficial to track the alignment of marketing efforts with sales outcomes, as this shows how well marketing initiatives are supporting the overall sales strategy. By monitoring these metrics, you can gain actionable insights to continuously refine and improve your co-marketing efforts with channel partners.

Some key KPIs to track in marketing and lead generation include:

• Lead Generation Volume: Total number of leads generated through co-marketing efforts.
• Lead Quality Score: A measure of how likely the leads are to convert based on predefined criteria.
• Conversion Rate: The percentage of leads that convert into customers.
• Cost Per Lead (CPL): The cost incurred to acquire each lead.
• Lead Source Efficiency: Performance of various lead sources in terms of quantity and quality.
• Marketing Campaign Engagement Rates: Metrics such as click-through rates, open rates, and social media interactions.
• Content Engagement Metrics: The level of interaction with specific pieces of content, such as downloads, shares, and comments.

Metric 5: Partner Lifecycle and Retention Rates

Monitoring the partner lifecycle, from onboarding through long-term collaboration, is crucial. Dan Wensley, CEO of Scalepad, underscores the importance of choosing the right metrics. “Metrics, processes, and data drive businesses… The top five metrics… establish the focus of the business, the operational maturity, the fiscal attributes, internally focused or external focused objectives, and product vertical objectives,” he explains. Retention rates shed light on the health of these relationships, indicating satisfaction and long-term viability.

The concept of partner lifecycle and retention rates is pivotal in understanding and managing long-term relationships in the channel. These metrics provide insights into how partners progress through various stages of their relationship with a vendor and how effectively the vendor maintains these relationships over time. Consider reviewing these key insights:

• Recruitment and Onboarding: This initial stage involves attracting and enrolling new partners. Key metrics here include the number of new partners onboarded, the time taken for onboarding, and initial training completion rates.
• Activation and Engagement: Once onboarded, the focus shifts to getting partners fully engaged with the vendor’s products or services. Metrics include the time taken for partners to start actively selling or promoting products, engagement in marketing activities, and participation in further training or certification programs.
• Retention and Loyalty: Long-term partnership maintenance is crucial. Retention rates, length of partnership, and loyalty measures, such as repeat business and referrals, are critical metrics. Additionally, partner satisfaction scores play a significant role in this stage.
  

In The End

Measuring partner engagement is multifaceted. It demands a careful blend of quantitative analysis and qualitative understanding. This approach enables vendors to identify areas of strength, uncover opportunities for improvement, and ultimately drive mutual success.

The wisdom of Peter Drucker rings true in this context. By diligently applying these engagement metrics, vendors can manage and enhance their partnerships, steering towards a future marked by innovation, growth, and shared success. The key lies in continuous measurement, adaptation, and an unwavering commitment to fostering solid and enduring relationships with their partners.