These days, partnerships programs are responsible for a substantial amount of business revenue, with averages ranging from 18% for low-maturity companies to 28% for high-maturity companies. But there’s a catch: not every partnerships program is as successful as this statistic implies.

If you’ve spent more than a week or two in the partnerships industry, you know that a lack of strong leadership is a death sentence for both individual partnerships and the program as a whole. Thus, you’ll need to understand exactly how your partnerships are performing—which means knowing the best way to track key performance indicators (KPIs) for your partnerships is a must. 

A recent Partner School discussion between Scott Pollack, Co-Founder and CEO of Firneo, and Jon Pruitt, Director of Sales and Partnerships at Pandium, shed light on this vital subject. When partnerships pros focus on the right KPIs, use the same indicators as their partners, and closely track their KPIs, they can easily get the most out of these metrics.

KPIs: The Language of Leadership

Scott started the conversation by highlighting the critical importance of KPIs for partnerships leaders. To that end, he shared a well-known quote illustrating the role metrics play in the business world: “What gets measured, gets managed.”

Jon echoed this sentiment, noting that KPIs are crucial tools for assessing performance and driving improvement in partnerships. He emphasized that without clear metrics, it becomes all but impossible to gauge partnership success or identify opportunities to enhance these relationships. That, in turn, can easily hinder organizational growth.

Tailoring KPIs to Partnerships

The conversation then delved into the nuances of defining KPIs within the partnership landscape. In many fields, metrics like sales revenue and customer engagement are considered “standard” KPIs. However, due to the unique nature of partnerships, identifying the right KPIs for these relationships can be a bit more challenging.

To make this easier for partnerships leaders, Jon identified two primary categories of partnership KPIs:

  1. Direct KPIs focus on revenue generated through direct partner interventions, such as facilitated introductions or joint marketing campaigns. 
  2. Indirect KPIs measure partners’ influence in driving sales, often through referrals or collaborative selling efforts.

Aligning KPIs with Organizational Objectives

Scott and Jon’s discussion also touched on the importance of aligning partnership KPIs with broader organizational goals. No matter what departments they report to, partnership leaders must use these metrics to demonstrate tangible contributions related to revenue generation, customer retention, and product adoption. In doing so, they’ll communicate the value of their work to stakeholders—and make sure that everyone in their organization is working toward shared objectives.

Additionally, partnerships pros can secure resources and garner support for their initiatives by fostering collaborative internal partnerships. These reciprocal relationships ensure that partnership-related efforts will be recognized and valued across the organization.

Maintaining Alignment With Partners

Since partnerships can quickly fall apart due to incompatible goals, external alignment should be a high priority for partnerships pros. Jon shared experiences where organizations had amicable relationships that failed to work out due to differing priorities. He stressed that partnerships leaders should aim to recognize potential alignment issues early on, and acknowledged that parting ways can sometimes be the best course of action for everyone involved.

Additionally, Scott and Jon discussed situations where partners share values in terms of underlying goals, but not in terms of KPIs—say, a partnership where one partner focuses on revenue and the other focuses on engagement. Partners can avoid outcomes like this by understanding the intentions behind their partnership’s KPIs and focusing on working together to pursue mutual benefit.

Partner Attach: A Paradigm Shift in Partnership Strategy

The conversation continued with an exploration of “partner attach,” a concept exemplified by recent initiatives at companies like Google and Microsoft. Partner attach is all about integrating partners into every customer engagement, leveraging their expertise to enhance customer success.

Jon described partner attach as the process of outsourcing customer success functions to trusted partners. By embedding partners into the customer journey, organizations can see meaningful improvements in KPIs related to retention, engagement, and revenue. 

Partner attach is part of an ongoing cultural shift toward recognizing the intrinsic value of partnerships in driving business outcomes. In fact, Jon said Microsoft now derives 95% of its revenue through partnerships.

How to Choose Partners Strategically

Instead of pursuing partnerships left and right, Jon said partnerships leaders should make strategic partner selection a priority. To this end, they can consider factors like alignment with ideal partner profiles, motivation, and total addressable market. 

Jon described an approach of scoring potential partners based on these criteria and others, emphasizing that higher-scoring partners should receive more attention. Using a strategic approach for the partner selection process can help partner managers allocate their time effectively and build a partner portfolio that aligns with their organization’s goals.

Tracking KPIs: A Closer Look

Obviously, KPIs cannot function as intended when partnerships leaders have no way of tracking these metrics. Jon recommended focusing on scrappiness and simplicity early on by using relatively simple tools such as CRM systems for this purpose.

As time goes on and their programs become more established, partnerships pros can start to use more sophisticated tools for their KPI tracking needs. Jon noted that working closely with operations teams can simplify the tracking process for partnerships leaders.

Defining Personal KPIs

Finally, Jon addressed situations where partnerships pros need to set their own KPIs in the absence of explicit leadership guidance. In this situation, he said partnerships leaders should aim to look for personal KPIs that demonstrate their partnerships’ value while remaining aligned with broader organizational objectives. 

This process also includes assigning a dollar amount to partnership-driven revenue and meticulously tracking metrics throughout a partnership’s lifecycle. Activity can and should be one of these metrics, especially during the early stages of a partnership program.

Learn Even More About Partnerships

KPIs aren’t just a handy way to demonstrate the value of partnerships to high-ranking members of your organization—they also play a significant role in determining the success or failure of partnerships. By finding the right KPIs for your partnerships and knowing how to track them, you’ll take an important step toward perfecting your partnerships program.

Unfortunately, performance indicators are just one area where companies often fail to give partnerships pros the guidance they need. Instead, it’s all too common for new partnerships leaders to enter this field without a “playbook” that could help them jump into their new roles with confidence.

At Firneo, we focus on connecting partnerships leaders with the information they need to succeed, no matter where they are in their careers. Are you interested in getting an in-depth guide to partnerships in just four weeks? If you are, enroll in our Mastering Partnerships Strategy program!

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