What is a strategic partnership?
A strategic partnership is a relationship between two businesses propelled by an agreement that aims to help both parts achieve more success. Strategic partnerships can offer a great deal of benefits to your business such as the potential of high growth, increased revenues, market penetration, or new product development.
There are several types of strategic partners ranging from marketing to supplier and technology partners. It’s pretty much up to you to define the needs of your business and identify the partners that could help you in achieving key goals by establishing and developing a relationship with them.
Measuring strategic partnership success
Long-term partner relationships can produce great outcomes but require a significant investment of time, money, and other valuable resources. Measuring the value of a strategic partnership will help you assess the success of your partner program and the return on your investment. There are two types of metrics that can be used to do that: financial and strategic.
Financial KPIs can be used to determine the monetary value of the partnership. These types of metrics are utilized to evaluate partner performance and program success. Additionally, financial metrics can be used to attract potential partners who are interested in assessing the financial aspect of the partnership. Let’s take a closer look at the most widely used financial KPIs:
Number of partners
Even though the number of partners in your program is a measurement of size, this is one of the most popular metrics used to describe partner ecosystems.
The amounts of leads your partners generate. This metric is a good starting point to determine how your partners impact your sales cycle.
Monitoring the amount of active deals registered by your partners will give you a better understanding of partner performance.
This KPI measures the effectiveness of the sales activities of your partners. In the long term, comparing the closing ratio within your organization and within your partner network will show you how any given partner measures up.
People trained or certified
In many cases, a certain number of partner people trained or certified is a pre-requisite to progress up the program level. The amount of people your partners train or certify indicates their lever of commitment to the program.
Just like you would measure customer satisfaction with your company, you should be measuring partner satisfaction with your organization. Measuring partner satisfaction will provide you with insights on how your partners perceive the different elements of the partner program, communication methods, and their overall relationship with your company. One of the most popular partner satisfaction surveys tabulates anonymous responses in a Net Promoter Score format.
Although strategic partnership KPIs are less tangible and not as straight forward to measure, they can be utilized to make the business case for a strategic partnership and can have a much greater impact in comparison to the financial value of the partner program. Let’s dig a bit deeper into strategic KPis:
The partner experience includes every aspect of the relationship between your company and its partner network. Measuring partner satisfaction is a first step towards evaluating the overall partner experience but not quite enough. When considering the partner experience, it’s worth considering the following:
The more engaged your partners, the more successful your partner program. Are your partners downloading resources? Do they participate in trainings? Are they connected to your sales team? Collecting and analyzing this information will get you far in terms of understanding how engaged your partners are with your organization.
Are you enabling your partners to be successful? A strategic partnership will yield the best results when you make it easy for your partners to access resources, understand how to use tools, and navigate internal processes. Measuring the partner effort becomes even more important because the overall partner experience is negatively impacted when a partner is required to put forth high effort to interact with your company to complete tasks.
Customer satisfaction with your partners
It is crucial to understand how the customer perceives the experience with your partners. The way in which partners engage in marketing, selling, implementing, and supporting the customers has an immediate impact on customer satisfaction. If you do not make the effort to track these metrics you could be enabling your partners to create unhappy customers and unhappy customers are always bad news.
Effectiveness of partner marketing
Even though partner marketing is a crucial element of a strategic partnership, very few vendors track marketing effectiveness. But, tracking marketing ROI is important because it will allow you to determine to which partners you should redirect your marketing resources to maximize results.
Partner profitability with your solution might be tricky to measure but by doing so you will gain valuable insights on partner policies, trainings, marketing etc. Monitoring and analyzing partner profitability will allow you to understand where your partners invest and what is your role in that equation.