Partner Sourced is the wrong metric
Published on October 1st, 2024, written by The Partner Guru Team
One key indicator widely used to measure the value and performance of an alliance is partner sourced pipeline and/or partner sourced revenue. At a high level, this seems like a logical metric to use when building GTM alliances. However, after 15+ years of alliance management experience we see this as a wrong indicator (or at least a very flawed one) to manage and evaluate a partner ecosystem. This is our reasoning:
Leveraging partner sourced pipeline/revenue as a metric across the entire partner ecosystem
Just like a football team, the key strategic alliances for your organization should have different capabilities, strengths, and expertise. This means that some players (partners) will perform key and specific tasks for the duration of the game. Some partners will emphasize on solution deployment and product adoption, others will focus on items like procurement channels, consulting or lead generation. One partner can’t do it all well, and measuring alliances under this metric across the board leads to measuring (and in some cases forcing) partners against an unnatural capability. Yes, we all want help on demand generation efforts and revenue, but it's important to know who you can ask for this and on whom you should not waste cycles or set improper expectations. Partner programs focusing on partner sourced pipe/rev alone will create a weak partner ecosystem that does not support the entire customer lifecycle.
The unclear definition of what it means to be sourced
Seems like each company has their own definition of what it means to have a qualified partner sourced opportunity or deal. Companies have multiple partnerships with other organizations, and with no standard definition for partner sourced for all, it's difficult to expect your partners to commit to satisfy the goals and desires of every alliance they have.
Is a warm intro a partner sourced opportunity? Does the partner need to complete a full BANT for your consideration? What if the lead came from a partner event that was funded by your marketing team? What if the lead came from an RFP that multiple partners got access to at the same time? You see where we are going; the value of the metric gets lost in a myriad of multiple situations that can't crisply translate into partnership value.
The nature of the market where we are leveraging our partner ecosystem
Some markets are more open to GTM partnerships than others. For example,emerging markets like APAC and LATAM are partner led markets, where companies rely on a partner ecosystem for pretty much everything. More than partner sourced pipeline/revenue, you should expect partner sourced everything; the ecosystem is your eyes, ears and feet on the territory (since it’s most likely that your organization will have limited presence). Partner sourced as a metric adds no value to you in this case and you’d be better just tracking pipeline, revenue and/or funding ROI overall rather than adding the “partner” tag.
Partner sourced pipeline and revenue are lagging indicators
Ok, partners aren't sourcing opportunities or deals, so what? There are so many steps that need to occur before an opportunity is discovered, and even much more for a deal to close, that partner sourced pipeline/revenue doesn't really provide meaningful insights to understand the reasons behind a specific behavior or to adopt programs/incentives to change outcomes. Without a complete understanding of the problem, how can we drive change? Clearly this metric needs to be complemented with other indicators like account propensity, # of touches, campaign funding, resources, etc.
Setting unrealistic expectations for your partners
The dream of having a partner that will handle super qualified opportunities for your sales team to take easily through your sales process is just that, a dream. Some of your partners will not have strong marketing or sales resources, some will not have a brand they can leverage, some might have the resources/capabilities but won't be incentivized to do demand generation or find leads for you. That said, it's important to know and be comfortable with what a specific alliance can provide and what tasks the partner can support during the entire demand generation and revenue journey: some alliances will only go as far as sharing notes of their engagement/relationship with accounts (which is valuable intel), others will just send a warm intro emails and wish you the best, others will give you cash, and others will go as a far as building strong co-marketing engagements. You need to know how to work with all and know how to measure the value for each of those alliances.
So, if partner sourced pipeline/revenue are incomplete metrics, what other KPIs should your organization use? There’s no answer here that will fit all GTM alliances, some of the most common out there include: Partner touched, partner influenced, partner deployed, partner resold, partner-led.
Are you interested to know which metrics you should track and build a plan for? Reach out and let's chat! PartnerGuru is on a mission to build partnership capacity and capabilities for technology organizations.