Whether they be leading indicators (factors such as training that improve the probability of partner success) or lagging indicators (demonstrable partner results), Channel KPI’s are the lifeblood of all channel management organizations. The full complement of Channel KPI’s almost always covers four key factors: coverage, capacity, competence and cost. But exactly how these are measured evolves with our industry.
Today, vendors must design their Channel KPI’s to address the modern dynamics of offer complexity and partner business model diversity. In addition, they must become experts at leveraging the power of automated channel management platforms to maintain an edge over the competition. So how do you frame the Channel KPI structure for 2020? Start by looking at what’s strategically important to today’s vendor/partner relationships:
Then deploy the following Channel KPI’s that measure partner – as well as total ecosystem – performance alignment to those goals.
It’s important to capture and understand geographic differences, as a vendors’ market power and position often varies dramatically by region or country.
This metric reveals which partners are in compliance. But in addition, it also provides important insight into a vendor’s relative strength in markets that are important to them.
This metric is especially important to vendors who play in high growth market segments and for those who derive significant revenue from cloud-based services, where the initial sale creates the environment for sustained revenue growth over time.
If a vendor has a subscription business, this metric will measure partners’ success in penetrating account opportunity by selling upgrades to higher-level feature sets, adding data or content services and by selling end-user specific apps. All of the above are critical to a vendor’s success within the cloud business model.
This impacts partner revenue attainment as well as customer satisfaction. Therefore, many vendors use this metric to funnel leads to the channel partners who have proven their willingness and ability to follow up.
If a partner is teaming with the vendor, or indeed another partner, the vendor will want to make sure that (a) the customer does not get lost in the system and (b) the information transferred is 100% accurate.
This is the percentage of channel partners participating in any given relevant program. Because modern automated platforms help ensure that only relevant programs are directed at specific partners (this can be by tier, by geography, by specialization, etc.), they allow vendors to create meaningful participation metrics. Consequently, these metrics (a) confirm compliance with performance objectives and (b) provide an early warning about a specific partner or program.
If a vendor is working with partners (ex. Systems Integrators) who sometimes influence but do not close the sale, that vendor will want to establish the value of the partners’ influence as a separate KPI. That way, the partner can be supported (and perhaps compensated) appropriately.
As discussed in earlier blogs, deal registration and MDF programs are usually the most complex, costly and contested programs within a channel organization. Automated tools make it easier to track sales conversion rates and values for both registered deals and leads generated from MDF-funded initiatives. Consequently, this metric is a huge benefit for channel managers who are asked to cost justify their program investment.
By comparing ROI’s from various partner programs, vendors are able to identify which programs produce the highest ROI’s. This in turn enables them to then dig deeper to learn from them.