Partner scorecards are a way to measure (and evaluate) channel effectiveness. For this purpose, we defined “Partner Scorecards” as a way to evaluate the effectiveness of your individual channel partners.
Over the last few years, we have seen a lot of trends in channel marketing. Based purely on a recent channel marketing conference Channel Focus North America, Partner Scorecards are all the rage this year as “Opportunity Registration” was over the last few years.
The reason is actually simple; when properly conceived, partner scorecards can help you simplify key business decisions such as: where to invest, what programs to keep or create, where to recruit, where to “disengage” from unprofitable partners and how and where to staff. I can already tell what you’re thinking: “How can I get a piece of that?”
First, start with a blank sheet; don’t copy what some other company is doing. Scorecards have to align with your unique go-to-market strategy. Trust me, there are no two companies with the same required attributes on their partner scorecards. At a basic level, it’s a “report card” of partner performance. So, start by identifying the KPIs that drive your business and how those KPIs and related attributes extend to your partners. The scorecard for a manufacturer of long-sales cycle, high-value product is going to be very different than that of a manufacturer of short sales cycle commodity-oriented products. Although the data requirements in each of these instances will be quite different, the importance of the scorecard is the same, to quickly provide the information needed to simplify key business decisions.
Second, identify how each KPI will be measured along with the source of that data. Remember, there are two types of data that can be included on your scorecard, reported and behavioral. Reported data includes the information “claimed” by the partner (e.g.: vertical market focus, solution focus, etc) Behavioral data is obtained through “objective” performance measures, such as deal registration close rates. While behavioral data is favored, there is a place for reported data in your scorecard. What follows is a description of the various types of data that is reported on a scorecard:
Sales: While measuring sales performance is obvious, data should be broken down into more specific elements. For example, sales to certain demographic, vertical market segments, sales of specific product or solution categories. Including both unit quantity and dollar value is important as well.
Customer Relationships: Since sales and marketing is all about end-user sales,identifying key customer relationships is a critical component. If you are a high value/long sales cycle product, you may want to include detailed customer information. If you are a more commodity oriented product, while the previous points reflect best practices for the data included within your scorecard, there are even more best-practices to consider for reporting all this useful information.
Trends Reporting: Rather than simply reporting the static facts, charts and graphs that reflect trends over time are more useful when making at-a-glance assessments. Carefully selecting which trends to reflect will help expedite your decision making process.
Index reporting: Reflect KPIs in terms of an index which ranks the partner performance relative to a group of peers (Is partner “A” performing better or worse relative to other “Gold” partners in this KPI?). This index can be constructed based on a number of criteria, including: average performance with peers based on geography, business type, “tier” designation, or combination.
Roll-up: While we have talked about scorecards relative to an individual partner, when designing your scorecard system you should be able to design your reporting to include any group of partners. This is useful for evaluating relative performance between sales territories, to help plan staffing requirements, and conducting a “gap analysis” of channel coverage.
While stopping short of a specific recommendation, this article is intended to provide the foundation to help you jump-start (or evolve) your own scorecard program. It is important to understand that your scorecard will evolve over time as your ability to capture specific information improves and as new KPIs driving your business come to light. Don’t be afraid to start small, or to simply focus on only one or two areas presented here.