Lately we have been getting a lot of requests that address topics like: “how do I evaluate partner performance?” and, “what is included in a partner scorecard?” These questions are closely related. Of primary importance is the first, because once you have identified that—the scorecard is just the conduit for providing the metrics.
I have written a number of blog entries recently on the topic of measuring partner potential (this is a cheap ploy to get you to look back at those entries). But let’s take a quick journey back to the evolution of partner performance metrics. It began with the notion of volume—the 80/20 rule—with those 20% of channel partners who gave you 80% of the revenue were defined as your “top” tier. With that, the Medallion programs were born and we gave this group a name: “Platinum”. The next 20% were “Gold”, and so on, all through the precious medals. Let’s call this Accreditation 1.0. Accreditation 2.0 then added various levels of certification—technical or solution training as key criteria. Along with it were guidelines of how many people should be certified in what disciplines based on some combination of locations, employees or sales volume. Most vendors are here today are here, in Accreditation 2.0.
Enter Accreditation 3.0: This adds to the above by evaluating your partners (and key partner employees) based on partner engagement—or, an evaluation of how committed and individual partner is to your business, and their propensity to grow (versus flat-lining—at whatever sales volume they have been able to generate). Also to be considered is how profitable that partner is to you, based on your investment against that partner in human capital, incentives or discounts.
Think about it for a minute, because there is a lot of information in that one short paragraph. Your first step in evaluating partner performance has to do with your determination of how you measure engagement, potential, and profitability. The bad news is that there is no one correct answer for how to do this. The answer will be different based on your partner types, whether you are in a mature industry, emerging technology, and even geography. But don’t get scared, it’s not that tough to do. Your imagination is your biggest limitation, with the ability to put metrics around the criteria you conceive being the second biggest.
Once you have decided the criteria and the metrics behind it, the third step is to define what is the minimal acceptable level of performance that you would like your partners to perform against each criteria. Those scoring over that threshold are “top performers”, those scoring under are candidates for improvement. Those partners who perform well in a number of categories are to be celebrated and the corner stone for “cloning” in recruitment efforts, as well as providing fodder for best-practices in partner behavior. Really, that’s only 3 steps when you break it down. A great way to measure performance here is to index the value of any given partner performance against the desired performance threshold. This is your basis for scoring that partner against that criterion.
Still too vague? A while back at a channel marketing conference I hosted a workshop on partner scorecards. The dozen or so people in the workshop representing an equal amount of vendors generated a list of over 80 criteria that were relevant to their organizations—so it’s not that hard.
To get you started, below are a few ideas for criterion you’ll have to set the performance threshold for each that are relevant to you:
- Minimum number of new deals registered per year (per sales rep)
- Utilization rate for Co-op/MDF spending
- Close/Win ratio of all deals registered
- Average time to close for all deals
- Close/Win ratio for all leads distributed to the partner
- Minimum attachment rates for specific products or service packs
- Year-over-year revenue growth
- Support calls received, or received without escalation
- Average gross margin per sale
- Average deal size/value
Look, there’s a list of 10 criteria and we weren’t even trying hard.
So, once your criterion is defined (and you can always add to it, the important thing is to START A LIST!) the next step is to set your ideal performance criteria for each. Assuming you have a means for measuring performance at the partner level, you have the basis for your partner scorecards.
See, wasn’t that easy?