When channel-centric companies talk about key performance indicators (KPIs), they tend to think of revenue. While measuring revenue is non-negotiable, it doesn’t paint you the whole picture of your partner program’s health.
Selling through channel partners isn’t as straightforward as managing an internal sales team. You won’t necessarily have a clear picture of your partner’s pipeline, so you must rely on alternate metrics like deal registration to accurately forecast revenue.
In this post, we’ll share six KPIs that can illuminate the channel partner program progress and monitor growth.
1. Sales mix analysis
A sales mix analysis is a performance metric that calculates the percentage of each product sold against total sales. Many companies offer diverse portfolios of ranging value, so it’s critical to know your most profitable products.
By measuring and understanding your sales mix fluctuations, you can maximize profits. Analysts and investors use this KPI to determine a company’s potential growth and profitability.
When profits become flat or begin to decline, the company can de-prioritize or even stop selling low-profit products to focus on selling higher profit products or services.
2. Deals registered
The amount of deals registered is a critical program KPI for channel-centric companies. Deal registration not only allows companies to gain financial visibility, but its thorough tracking also helps reduce conflicts between partners
Registering deals is bringing leads to the vendor at the beginning of the sales process. Deal registration provides protection (and sometimes additional incentives like discounts) to the partner. Essentially, deal registration is the equivalent to a partner “calling dibs” on a lead.
While deal registration is beneficial for partners, it also benefits vendors. Tracking this KPI is one of the only ways to attain and analyze your partners’ pipelines and forecast revenue.
3. Partner attrition rate
When determining profitability, channel partner churn is a channel KPI that you should not ignore. Determine whether your churn rate is average or if you must make improvements to your program.
As a KPI, partner program churn can reveal insights into participants’ overall satisfaction. Keeping partners happy (and loyal) is vital in competitive markets. Measuring this metric goes beyond satisfaction surveys, as you must also measure engagement.
One of the easiest ways to measure partner engagement is through your partner relationship management (PRM) portal. Your chosen technology platform should measure the number of partner logins, number of calls from channel account managers (CAMs), and the number of meetings attended.
The right partner platform will automatically gather partner program KPIs like marketing asset downloads, demo participation rates, and certification attainment. By generating an easy to understand report, you’ll be able to gauge the “stickiness” of your relationships, as well as the partner journey stages which you tend to lose participants.
MDFs are marketing dollars that businesses designate to their channel partners. While channel-centric companies benefit from helping their partners’ marketing, the challenge is to put MDFs toward activities with the highest ROI.
You can create highly targeted programs by collecting data on your results after each initiative. The data you collect will reveal which marketing activities were most effective so that you can double-down on them. Targeted MDF programs will give you the best ROI.
By analyzing past KPIs, you can create an informed, fact-based budget for your MDF program. If this information isn’t readily available, it may be time to implement PRM software to automate this process.
5. Net-new customers
Brand new customers are a critical program performance metric to track for overall growth. While recurring business is cost-effective and necessary, your ultimate success relies on your ability to grow your customer base. New business will always be more challenging to attain than upselling your existing customer base, but it’s worth it.
Focusing on net-new clients leads to the most significant gains in revenue growth. It’s often the reason companies decide to develop a channel partner program in the first place. They know partners can help expand their portfolio into new industries or geographies.
6. Joint-business plans
Numerous studies show that businesses that make joint-business plans with their partners do better than those who do not. Develop and review your joint business plans on a quarterly and yearly basis.
Monitor the number of partners you have joint plans with and use it as a barometer of partner program success. You could also measure the difference in performance between partners with business plans and partners you don’t.
Bottom line about partner program KPIs
Your ability to track channel program metrics beyond revenue is critical to gaining an accurate picture of your business and forecasting performance. Look to your partner portal to measure and analyze channel KPIs like sales mix analysis, deals registered, partner churn, MDF effectiveness, net-new business, and joint business plans.
Sales mix analysis allows you to identify and double-down on your most profitable products. Deal registration creates visibility so that you can create accurate forecasts. Partner satisfaction and MDF effectiveness will show you the stickiness of your relationships.
Lastly, measure all performance metrics around the net-new business. The right partner platform will proactively measure these KPIs and auto-generate reports for you to analyze. If you spot any weaknesses, you can create an improvement plan.