Three Simple Steps to Measuring Government Partner Performance
February 10, 2014 Leave a comment
What is best way to measure partner performance? What is included in a good partner scorecard? Those are the two most frequently asked questions in the Government Channel Leadership Council (GCLC), a forum established by immixGroup to share best practices, information and ideas about the public sector IT market.
These questions are closely related. The first is the most important, because once you’ve answered it, the scorecard is just a way to provide metrics to measure success.
Measuring partner potential has always been tough, and my 25-plus years of managing channel partners has given me some basic ways to address this age-old question. Before we get to that, let’s take a quick journey back to the earliest days of partner performance metrics and the insights its evolution may hold for all of us.
Partner performance metrics began with the notion of volume, and the 80/20 rule: The 20% of channel partners who gave you 80% of the revenue was defined as your “top” tier. Out of that, we created the “Medal” programs and we gave this group a name: “Gold.” The next 20% were “Silver,” and so on, all through the precious medals. We’ll call this Accreditation version 1.0.
Accreditation version 2.0 then added various levels of certification, with sales, technical, or solution training as key criteria. Along with it were guidelines of how many people should be certified in what disciplines or technologies, based on some combination of locations, employees, contract vehicles or sales volume. Cisco was one of the first to model all this out. Most vendors/OEMs function in Accreditation 2.0 today.
Enter Accreditation 3.0. This adds to Accreditation 2.0 by evaluating your channel partners based on partner/vendor engagement—or, an evaluation of how committed an individual partner is to your business, and their propensity to grow with and through you. Also to be considered is how profitable that partner is to you, based on your investment against that partner in headcount (Channels Account Manager, Systems Engineer, marketing, etc.), incentives including market development funds (MDF), rebates or discounts.
So, how do you proceed in evaluating partner performance? There are relatively simply steps to consider.
Step One: Determine how you will measure engagement, potential, and profitability. There is no one correct answer for this. It all depends on your partner types, maturity of your channel program, type of technology and its lifescyle – even geography, because government buying expands beyond the Beltway.
Step Two: Add the complexities of how business gets done in the competitive government market and who holds which key government contracts – wow! Don’t worry; it’s not that tough to do. Once you have decided the criteria and the metrics behind those criteria, you’re on to the next step.
Step Three: Define the minimal acceptable level of performance for partners against each criterion. Those scoring over that threshold are “top performers”; those scoring under are candidates for improvement. Partners who perform well in a number of categories are to be celebrated. They are the benchmark for future recruitment efforts, and they provide proven examples for best practices in partner behavior.
Those are the basics, in three simple steps. A great way to measure performance is to index the value of any given partner performance against the desired performance minimum. This is your basis for scoring that partner against that criterion. You may want a group of people to weigh in on this scoring to get different prespectives.
If this is too vague, you may want to look at a formal “Partner Scorecard.” To get you started, below are a few considerations – you’ll have to set the performance threshold for each item that is relevant to you:
- Partner-led engagements versus vendor-led engagements
- New agency or program penetration
- Number of new deals registered per year (per sales rep), and close rate for registered deals
- Utilization rate for MDF dollars, and effectiveness of marketing dollars spent
- PS Attach rates
- Renewal rates
- Establishment of a preferred contracting vehicles or arrangements
- Sales growth – year over year, quarter over quarter, product mix, target accounts
- Competitive product knock outs
- Certifications, including number of certified people (sales/technical) and certification levels
This is a quick “top ten” list; I am certain you can come up with many more. And remember, you can always add to it, but the important thing is to start a list!
Once your criteria are defined, the next step is to set your ideal performance levels for each. Assuming you have a means for measuring performance at the partner level (that’s the topic for a whole new column), you have the basis for your partner scorecards.
Just like hitting the Staples “Easy” button, right?
For more information on this topic, or about the Government Channel Leadership Council, contact me at firstname.lastname@example.org.