Channel Program KPI's, What You REALLY Need to Consider

In today’s business environment, having a thriving channel program is critical for technology vendors to grow and scale. A Channel program provides details on how partners can go to market with you as a technology vendor and includes different types of partners such as referral partners, value-added resellers (VARs), solutions providers, system integrators, professional services partners, distributors and on and on.

It is easy to look at lagging KPIs, such as number of partners of closed opportunities. However, it is extremely important to monitor leading KPIs (which are often behavior indicators) to gauge the success and gaps within your channel program.

Below is a list of the most common KPIs technology vendors focus on in the early adoption of a channel strategy but these are usually lagging KPIs, followed by the KEY INDICATORS you should REALLY be tracking and many simply are not doing so.

The Most Common Channel Program KPIs:

1.      Number of Partners. Typically, this is the first number most technology vendors will mention when talking about their channel program. You will hear statements such as “We have 225 partners in North America, 150 in EMEA, and 200 across the Rest of World.” This is NOT a measurement of quality or performance, many use this KPI because the numbers can be impressive.

2.      Bookings Revenue. At a base level, this is the bookings revenue from partners purchasing products from you as a technology vendor and reselling them to their end customers. A better KPI is tracking if the revenue has been created by the partner (opportunity registration). At an advanced level, the best KPI would track the partner’s influence through all the stages of your company’s defined sales cycle. Did they drive the Discovery and Qualification stages while your field team drove the Proof of Concept and Proposal stage?

3.      New Logos. A Channel program’s value increases if partners can uncover and capture new accounts previously unknown to the technology vendor and many times this is the one of the most important KPIs. Tracking the number of new logo wins through partner-led sales is a powerful KPI. Also, new accounts provide an opportunity to expand as typically it is easier to upsell to existing customers. Ultimately the growth of a technology vendor depends on the ability of its field team and channel partners to win in new logo opportunities.

4.      Opportunity Registrations. The adoption of opportunity registration for channel partners created a group of KPIs that help measure a partner’s ability to big in business opportunities. Some examples include the number of opportunities registered, average opportunity size, average time to close, and on and on. Knowing how many opportunities the partners are pursuing is great; however, this number does not always represent true action. A more valuable KPI would include tracking active opportunities compared to close won ratios.

5.      Certifications. Most vendors require a certain number of partner resources to be trained or certified. This is a great KPI and will also show you the commitment-level of a partner. You can expand on this KPI by correlating the number of people trained (sales, pre-sales or technical) to the opportunity-close timing (do partners close faster if more are trained?). Another important aspect is how well do partners stay up to date in training for new releases.

So far, the KPIs have all been lagging indicators that measure past performance and do not provide a clear representation of which partners you should invest in. Technology vendors have limited resources and need to focus their efforts on identifying strong partners worthy of your resources who are more likely to grow sales and help you retain your customers.

The KPIs You Should Start Tracking:

1.      Partner experience. This KPI measures a partner’s overall experience with you as a technology vendor – from policies to processes to personnel and profitability. Like customers, channel partners have a choice and can choice to work with other technology vendors if your channel program does not that this important KPI into consideration. This provides analytics on program initiatives that are effective at engaging and enabling partners and insights on processes that are burdensome and need to be streamlined. Showing improvement, year over year, is a great KPI to help convince channel partners that you are listening to them and making changes.

2.      Technology Vendor’s Sales Resource Utilization. Channel partner training and certifications are good only if they enable them to accomplish their activities, independently of needing help from you, the technology vendor. An important KPI is being able to demonstrate partner value by correlating partner completed training with decreases in resource utilization of your team by the channel partner because that equates to lower costs.

3.      Customer satisfaction with Partners. This KPI has become more prevalent in recent years. It is important to understand which partners are better at keeping customers happy compared to other partners. This is not just about retention activities like renewals and customer but also includes marketing, selling, and implementing your technology. Without knowing these metrics, technology vendors can be blindsided by a groundswell of unhappy customers based solely on a partner’s poor performance.

4.      Partner Profitability. A channel partner is as concerned and focused on their profitability just like a technology vendor watches their forecast, but partner profitability is generated much differently than most technology vendors. Typically, channel partners make most of their profit from professional services, while the profit they earn from the technology sales usually covers their demo/proof of concept/travel expenses. Understanding how your partners track their profitability helps you understand why or why not they invest in more training, marketing, or sales activities with you. 

5.      Partner Engagement. Another KPI of a partner’s future success is determining how well-rounded is the partner’s engagement with your organization. The more engaged they are – downloading resources, taking training, completing forward-looking business plans, connecting with CAMs and field sales teams – the faster they grow and the more they grow. This is easier to measure than profitability, but fewer vendors bother to collect this information and analyze it.

These are some of my favorite numbers. Some are easy to measure but do not produce great insights. Others are more challenging to accurately collect but better accelerate channel success.

Are you measuring these?

Are there other KPIs you are measuring?

I am always interested in hearing how others are tracking their channel ecosystems.

#KPI #channelmanagement #channelpartners #channelstrategy