We’ve all heard the adage from Peter Drucker: “If you can’t measure it, you can’t manage it.” In our current evolution in corporate strategy, the ecosystem is taking center stage. Large and small firms alike have moved from the old command and control business structure, with self-created and structured rules and work outputs, to more fluid organizations with numerous partnerships and alliances as a central tenet of their business strategy.
In this environment, Drucker’s adage likely needs to evolve to: “If you can’t measure it, you can’t partner with an ecosystem for it.” After all, if your business depends on partnerships and the ecosystem, then it just makes good sense that you would carefully measure those very same relationships for ROI.
Despite the importance of the ecosystem to a growing number of firms, too few companies are defining what to measure and how to ensure the effective measurement of these elements once they are defined.
The core issue seems to be that too many partnerships are led by the ‘gut,’ using former experience from years in “partnering.” This experience is often irrelevant because the world has evolved so rapidly and partnering strategies have, as a result, become almost unrecognizable from those that worked in the past.
Because of this approach, senior leadership often doesn’t understand or know what is really broken in its partnering strategy. Consequently, it can neither support nor invest to get partnerships back on track, thereby investing good money after bad in an attempt to do more of what isn’t working. The thinking is that the tide on the partnership will turn—it won’t. Success requires a fresh new look, as well as metrics that are broken down into key actions and investments in order to win.
Below, I am going to focus on the partnering area of sales and go-to-market to illustrate the critical measurements needed for successful ecosystem performance in an evolving space of ecosystem go-to-markets. The reality is that the sales world is now run on partnerships.
There are five to eight business buyer decision-makers in most enterprise sales opportunities, and in that world, going alone to the table just isn’t a viable strategy. Enter the ecosystem. In this new world, it’s no longer just the job of your alliance manager or channel leader to ensure success.
Everyone from your CEO to your CFO and beyond should be engaged and understand not only the need to partner, but also how partnerships work, succeed, and deliver results. Everyone must agree to the measurements that drive that reality for your business.
Here are a few elements to consider:
1. Revenue value needs a new view.
Sure, revenue matters, but it is a time-past metric, with few controllable elements other than putting that bar chart in the right brand colors for your operations reviews. Instead, think about measuring the elements that lead to the revenue, such as ABM plans filed, marketing spend, lead funnel velocity, new sales partners trained, influencer engagements, and social engagement scores.
2. Skip counting and focus on value.
Focus less on pure counts of partners and more on what type of partner profiles are needed. Look at the percentage of the market that matches that profile and has signed up for and made a first referral, engagement, or sale in your program. It’s a much more meaningful approach.
3. Existing metrics have evolved.
Your current partners deliver the majority of your results, but too few channel leaders are carefully measuring the right metrics for their continued success. Look at FRY (Frequency, Recency, and Yield) trending to win.
Are your partners selling more or less frequently than at the same time last year? How recently have they made a sale? And is their yield-per-sale increasing or decreasing? These three metrics are indicators of the success of a partner and its trajectory for the future.
4. Focus on the experience.
Look carefully at the partner experience and measure partner engagement across your organization to ensure that partner dissatisfaction doesn’t begin to erode your partner-led business.
5. Get them involved.
Is the partner part of your solution roadmap? Is it providing feedback on your solution that helps your product team to evolve your offering? Great partners give product feedback and help to improve the offers of their partner firms.
What’s in your metric plan for your partnerships? Knowing and driving to the right metrics allows you to drive to mutual goals and ensure those goals are met, which is the key to every successful partnership. Happy partnering!
Want more tech insights for the top execs? Subscribe to the CXO channel: