In today’s business environment, a company’s growth is closely tied to partner performance. To be successful, channel managers need to continuously make decisions about which partners to invest in and how those investments, both in time and money, should be spent. With a dearth of actionable insights though, these channel management decisions are often based on experience and gut instinct.
PERC Partner Scoring
Scoring partners is an approach that uses existing transaction and partner profile data to help make better strategic decisions. A good scoring approach uses a compound set of metrics (not just revenue) to evaluate partners. We call this Partner Estimated Revenue Capacity (PERC) partner scoring. The key is to provide 5 strategic capabilities to your channel ecosystem.
1. Insights that match your business
Partner scoring is customizable. The criteria for how you score partners is based on your business needs. Sure, measuring frequency, reach and yield is important, but does it really tell you anything about how a partner is aligned to your strategic goals? Partner scoring allows you to add more weight to capabilities, sales of specific products or reach into essential growth markets.
2. Like-to-like partner comparison
Not all partners are created equal. The mom-and-pop shop driving $2M in revenue isn’t less valuable than the heavy weight corporation driving $200M. They just have a different value. If all you do is look at the top revenue contributors, you’re missing out on the vast majority of ecosystems. These partners are too different to be compared to each other. Scoring partners creates a natural tearing. This allows managers to tune into the specific market value a partner has, and evaluate their performance against peer level partners.
3. Identification of ecosystem strengths and gaps
Most companies, especially tech companies, look at their ecosystem as a whole. They look at the number of partners needed to hit revenue goals and keep adding on more and more partners in an effort to hit those goals (aka “growing the long tail”). This approach can quickly dilute the value of partnering and increase management costs. Scoring your partners breaks down your ecosystem and facilitates more targeted analysis. Important insights around the effectiveness of incentive spend, the impact of certifications, the strength of partner commitment and more can be found through this type of analysis.
4. Data driven partner targeting
Successful businesses target specific segments and markets with tailored strategies. Doing this at scale is no easy task. The trick is to identify a small group of partners that will drive a large impact, making the most of your investment. With partner scoring, businesses can find these partner sets for multiple strategic initiatives, more often mapping them together to find a group of partners that will drive multiple goals at once.
5. Fact based partner planning
Most of your account managers have a good sense of what’s going on with their partners. Account managers are great at knowing the strengths of their portfolio. They also develop effective working relationships with a regular set of partners. The side effect is a blind spot to their partners’ weaknesses and a reluctance to work with “unknown” partners. Scoring partners creates an objective evaluation of partner effectiveness that can drive planning conversations around specific behaviors and encourage greater exploration of high potential partners.
Luke is a leader in our channel management and business intelligence practices. With over 10 years of industry experience he brings a background in customer service and a passion for data based decision making to collaboratively solve client challenges.