Partner Program Key Performance Metrics to Measure and Determine Success

“You can’t fix what you don’t measure” runs a popular adage. Metrics are certainly imperative to assess performance within an organization. But they are equally important when it comes to building effective, high-performing partnerships. What items should you be looking at? Guidance has identified a few key performance indicators (KPI) that you need to consider to ensure that your partners will measure up to expectations.

How Do You Measure Partnership Performance?

To begin assessing partner performance metrics, it’s helpful to break them into two main types of key performance indicators: strategic KPIs and financial KPIs.

Strategic partnership KPIs are intangible performance measurements used to determine the success of business activity or engagement. These prove to be important as they assist with the mitigation of potential risk and ensure the partnership for performance is beneficial and productive.

On the other hand, financial key performance indicators, also known as measurable data KPIs, are tangible performance metrics used to indicate the financial success of a partnership. Unlike strategic KPIs, which rely on qualitative analysis, financial KPIs use quantifiable data to determine the effectiveness of a particular partnership.

While strategic KPIs evaluate factors such as competitive advantage, risk assessment, and partner engagement, financial KPIs evaluate measurements such as revenue, transaction frequency, and customer value. With that in mind, let's jump into the specifics of each.

Strategic Partner KPIs for Effective Partnerships

Choosing the right strategic partner requires more than evaluating the financial upside. It also means ensuring they have business values that align with your own. If this potential partner doesn’t believe in the same level of transparency or align with your overall goals, the misalignment could have disastrous effects. To choose the right partner, you need to have clarity and set expectations regarding multiple areas. Throughout a partnership, you should be considering alignment and effectiveness on the following partner program KPI factors.

1. Partner Values and Experience

If this potential partner doesn’t believe in the same level of transparency or align with your overall goals, the misalignment could have disastrous effects. Informal or delayed responses to important matters, deferral to absent authority, and lack of engagement are just a few examples of risks that should be noted when reflecting on a partnership. If communication is harmful to the partnership and there is a lot of conflict in company values, you may want to reassess the business relationship management.

2. Scope of Work

You should always insist on Scope of Work documentation for all the mutual work activities that you and your partner undertake. SOW documents clarify what you should expect of each other, which reduces the chances of misunderstandings. They also help gauge progress towards objectives and in keeping costs in line. KPIs for partnerships that help assess the performance of both partners are:

• Did they meet the appropriate timelines?
• Are they on budget?
• Have technical challenges been properly addressed?
• Have outstanding invoices been paid?
• Did everything happen that was supposed to happen?
• Was the Net Promoter Score (NPS) completed? Are the results satisfactory?

3. Partner Engagement and Satisfaction

Regardless of the platform used for communication, an online portal, email, or in-person/video meetings, clear partner engagement is imperative. Prioritizing how to measure partnership effectiveness helps partners understand the strength of communication and the partners’ commitment to each other and their goals.

To further gauge partner engagement, it's essential to track metrics like response times, frequency of interactions, and the quality of communication. These partner performance metrics provide a clear picture of how engaged and committed a partner is towards shared objectives.

Financial Metrics to Measure Business Performance

Although qualitative data can play a key role in determining how well a partnership can sustain itself, the financial numbers are one of the biggest indicators of a successful partnership. Businesses may work well together, but the main goal is to increase revenue for both partners. If the partnership does not deliver financially, then it calls into question the need for the relationship. The following are a few financial KPIs that are important to measure with any business performance partnerships:

1. Partner Revenue

One of the biggest program performance indicators is whether both partners experience an increase in revenue. Partnerships require time, commitment, and extensive communication to maintain. Therefore, it is crucial that both sides experience a tangible increase in revenue as a result. Similarly, partners should measure where in the sales cycle each business contributes most. These metrics help partners make collective decisions and determine how to continue to invest resources.

2. Customer Satisfaction

It is imperative to understand which partners are selling, marketing and supporting their customers successfully. Failure to do this could lead to unhappy customers, affecting overall sales and revenue. Although revenue or engagement may speak for itself, surveying customers on their satisfaction with the services they received is a crucial tool for understanding the success of a partnership. After all, if customers are not happy with the services the partnership is providing, then the partnership is not living up to expectations.

3. ROI Measurement

ROI stands for “Return on investment” and is used to evaluate how effective the partnership investment has been. ROI compares the financial return of an investment against its total cost. A few measurements that can help assess ROI include:

• Click through rate: The ratio of clicks against impressions, typically displayed as a percentage.
• Cost per lead: The cost-effectiveness of marketing campaigns to generate new leads for the company. Leads are individuals who have expressed interests in the particular product or service.
• Conversion Rate: The number of times a website link has led to a sales purchase compared to the number of times the link was clicked, given in a percentage.
• Lifetime Value: An estimation of the average revenue generated from a customer throughout their lifespan.

4. Partner Revenue

One of the biggest program performance indicators is whether both partners experience an increase in revenue. Partnerships require time, commitment, and extensive communication to maintain. Therefore, it is crucial that both sides experience a tangible increase in revenue as a result. Similarly, partners should measure where in the sales cycle each business contributes most. These partner metrics help partners make collective decisions and determine how to continue to invest resources.

5. Customer Satisfaction

It is imperative to understand which partners are selling, marketing and supporting their customers successfully. Failure to do this could lead to unhappy customers, affecting overall sales and revenue. Although revenue or engagement may speak for itself, surveying customers on their satisfaction with the services they received is a crucial tool for understanding the success of a partnership. After all, if customers are not happy with the services the partnership is providing, then the partnership KPIs are not living up to expectations.

6. ROI Measurement

• ROI stands for “Return on investment” and is used to evaluate how effective the partnership investment has been. ROI compares the financial return of an investment against its total cost. A few measurements that can help assess ROI include:
  
  Click through rate: The ratio of clicks against impressions, typically displayed as a percentage.
  Cost per lead: The cost-effectiveness of marketing campaigns to generate new leads for the company. Leads are individuals who have expressed interests in the particular product or service.
  Conversion Rate: The number of times a website link has led to a sales purchase compared to the number of times the link was clicked, given in a percentage.
  Lifetime Value: An estimation of the average revenue generated from a customer throughout their lifespan.

Another crucial aspect to consider is the channel partner performance metrics. These metrics help in understanding the contribution of each partner in terms of sales, marketing efforts, and customer reach. It's vital for ensuring that all parties are contributing equally and benefiting from the partnership.

A Success Story Using Strategic Partnership KPIs

Guidance's expertise in leveraging key performance indicators (KPIs) has been instrumental in fostering successful partnerships. A notable example is our collaboration with K-Swiss. Faced with eCommerce challenges, K-Swiss turned to Guidance for a comprehensive solution. We implemented Shopify Plus, which efficiently consolidated K-Swiss' nine international sites and enhanced brand personalization, leading to cost reduction and improved customer experiences. This strategic move, accomplished in just eight weeks, was underpinned by a detailed KPI analysis focusing on performance, efficiency, and revenue.

The success hinged on strategic and financial KPIs, including overall engagement, proven expertise, company values, and potential financial benefits. By demonstrating the projected advantages of Shopify Plus, we helped K-Swiss make an informed decision, which not only boosted sales but also streamlined backend management, aligning perfectly with their goal of cost reduction.

This success story is a testament to the importance of partnership KPIs. By focusing on these key metrics, Guidance was able to ensure a successful and mutually beneficial partnership with K-Swiss.

To read more about this partnership, visit our K-Swiss Case Study.

Leveraging KPIs for Successful Partnerships

In conclusion, the effective use of partnership performance metrics and how to evaluate partnership opportunities are foundational to building and maintaining successful partnerships. These practices enable organizations to make data-driven decisions, ensuring long-term success and mutual benefit.

To learn more about determining helpful partnership KPIs for your business and establishing profitable partnerships, contact Guidance today. Guidance strives to help you elevate your brand, optimize your eCommerce platforms, and stand out to customers. Let us help you get started.