The great potential of partnership marketing stems from its capacity to boost market share. It also increases customer retention rates, your net promoter score, and the bottom line for your business. All these benefits enhance your ability to foster exponential growth.
However, you might miss out on these amazing benefits if you aren't monitoring your Partnership KPIs.
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A strategic partnership (partnership marketing) is an alliance between two or more entities. This mutually beneficial agreement helps both parties achieve greater business success. Your company can benefit a lot from these brand partnerships. Potential benefits include the possibility of rapid expansion, higher sales, market penetration, or the creation of new products.
KPIs are crucial since they assess the worth of your partnership initiatives and the likelihood of their long-term success. You need to monitor and assess your partner programme from several perspectives to determine what works and what doesn’t. Merely concentrating on partner influenced revenue alone isn't enough.
Examining partner programme KPIs can enable you to identify the areas that require improvement. This can be invaluable if your profits are stagnant or decreasing. Additionally, these indicators can let you know what's working well—what closes the deal. This is crucial, especially if you're working with multiple partners.
Your KPIs arm your sales process with credibility via evidence-based status reports. They serve as the compass for your partner marketing initiatives.
What Are Partnership Marketing KPIs?
Partnership marketing key performance indicators KPIs are measurable indicators that you can track to see whether your partnership marketing strategy is going as planned.
Most businesses will keep track of the number of partnerships they have, the deals they register, and the partner sourced revenue. However, it's crucial to consider all aspects of a relationship when evaluating its performance.
This entails monitoring each KPI that contributes to the complexity of your programme, especially if you are running affiliate marketing campaigns.
How Do You Measure Partnership Programme Performance?
It's important to divide partner performance metrics into two categories of key performance indicators: financial KPIs and strategic KPIs.
Strategic KPIs are intangible performance metrics used to assess the effectiveness of business engagements or marketing activities. These prove to be crucial since they help reduce possible risk and virtually guarantee that the relationship will be profitable and fruitful.
Meanwhile, quantifiable data KPIs, usually referred to as financial KPIs, are high level performance measurements used to show the partnership's financial success. As opposed to strategic KPIs, which depend primarily on qualitative analysis, financial KPIs provide measurable data to assess a specific partnership's success.
Financial KPIs examine variables like transaction frequency, earnings, and average deal size, whereas strategic KPIs assess elements like customer satisfaction, competitive advantage, and partner engagement.
We’ll discuss the details of each as we go on.
Which Financial KPIs Should You Be Measuring? - Digital & Affiliate
Despite qualitative data being an important factor in deciding how sustainable a partnership can be, financial aspects are one of the major markers of successful partnerships. Even if businesses get along well, the fundamental objective is to boost each partner's earnings. The need for the alliance is called into question if the partnership does not produce financial results.
Several financial KPIs that are crucial to track with every business partnership include the following:
Whether all involved parties record an increase in revenue is one of the key programme performance metrics. Maintaining a partnership takes effort, dedication, and constant communication. It is essential that both parties see a real gain in revenue to justify the effort.
Partners should assess where each company contributes more during the sales cycle. These measurements assist partners in deciding how to continue allocating resources and in making choices as a group.
Return on Investment | Return on Ad Spend
Return on Investment (ROI), often called Return on Ad Spend (ROAS), is a metric used to assess an investment's total profitability. "ROI" is a term used in partnership marketing to describe how profitable a partnership marketing investment was, often at the campaign or channel level.
Naturally, marketers frequently concentrate on ROI. You can use it to gain important insights into the effectiveness of your marketing strategy. These insights range from establishing the profitability of a certain campaign to figuring out whether marketing budgets should be increased for partner programmes.
How to Calculate ROI
The typical formula for calculating ROI is benefit times investment cost times 100. However, it is a little trickier to figure out your ROI when it comes to a partnership marketing programme.
When a customer is a partner-generated lead, their user journey is usually more asymmetrical and unpredictable, making it challenging to attribute sales to specific partners. The typical cost-to-benefit ratio doesn't necessarily show a true return on investment (ROI), since siloed CRM (customer relationship management) solutions may not be fully up to the task.
What can you then do to obtain a more precise picture of the ROI of your partner programme?
Here are several metrics that you can use to evaluate ROI:
Conversion Rate:
The percentage indicates how frequently a website link results in a purchase, as opposed to how frequently the link is clicked.
Lead Volume, Order Value & Revenue:
A far more analytical method of determining the ROI (and overall effectiveness) of your partnership strategy is to track the performance of particular projects. Simply keeping track of metrics unique to each programme is all that is required. You can keep an eye on the volume of leads a partner programme generates, the size of their typical deals, and the amount of income they bring in.
Customer Lifetime Value (LTV):
An estimate of the average revenue produced by a client over the course of their relationship with your business.
Cost Per Lead:
The efficiency with which marketing initiatives produce fresh leads from target markets. Leads are those who have shown an interest in a specific commodity or service.
The Multi-touch Attribution Model:
This model improves end-to-end customer journey visibility, allowing you to more clearly highlight tracking links, where they come from, and the credit each ad deserves.
Click Through Rate (CTR):
This straightforward yet effective KPI displays the click-to-impression ratio. It represents how many people viewed your advertisement on social media platforms, clicked a link to your landing page, filled out a form, and other onsite data.
While a high CTR suggests that your partner's audience has shown some early interest, a low CTR may indicate that you are focusing on the wrong audience.
Cost Per Acquisition (CPA):
This is a useful KPI for monitoring how performance marketing programmes affect revenue. It calculates the total cost of gaining a consumer who has converted through a particular marketing campaign or channel.
CPA is calculated as Total Advertising Cost/Total Conversions.
Cost Per Click (CPC):
This refers to the amount of money you spend for each advertisement clicked during a PPC (pay-per-click) marketing campaign. This advertisement may be one that appears on your partner's website or one that they've included in an email as part of a partner marketing campaign.
CPC is calculated as the total cost of advertising divided by the total number of clicks.
Earnings Per Click:
Earnings per click is a metric that partners use to determine the typical revenue they can anticipate for each click they drive in.
It is among a partner's most crucial criteria since it predicts your CPA earning potential and, to a significant extent, also determines the kinds of relationships you form and maintain.
EPC is the sum of the commissions you receive divided by the number of clicks generated by your affiliate links.
Encourage your partners to share this metric with you if they aren't already doing so. Monitoring this KPI can have a significant influence on how much money is allocated to your programme.
Which Strategic Partnership KPIs Should You Be Measuring?
It is necessary to thoughtfully select the most relevant strategic partners to achieve your overall objectives, rather than just looking at the revenue generated. This often means finding partners offering a product or services that complements yours.
It also entails confirming that their business principles align with yours. You need to be clear and establish expectations for your partner in a number of different areas if you want the programme to be successful.
There are different types of marketing partnerships, but with each approach, you should consider the following strategic elements in your partner programme:
Partner Values
A partner's lack of alignment with your overall aims or lack of transparency can have fatal consequences for your programme. When evaluating partnerships, it's vital to consider threats to success like lack of involvement, informal or tardy replies to crucial issues, and poor customer support.
You might need to reevaluate the partnership if communication is detrimental to the alliance and there is a significant disparity in values.
Customer Satisfaction
Because you lack direct access to your partner's audience, calculating end-customer satisfaction in a partnership programme can be challenging. It's standard practice to simply use revenue as a yardstick, but doing so might backfire and lead to unhappy clients.
Use customer surveys and open, considerate communication with partners to keep tabs on how well your partners are marketing, selling, and supporting their clients.
Partner Satisfaction
It is essential to keep an eye on partner involvement. Partners can better understand their commitment to each other and their objectives by prioritising how to assess partner satisfaction.
Keep in mind that a brand partner who is content and involved is more inclined to pursue and achieve success with your target audience. Use a partner portal or marketing automation solutions to monitor partner-specific data.
Don't be scared to communicate and reach out to them as well. Your partners are essentially your team members. You can evaluate partner satisfaction via informal get-togethers, quarterly business meetings, or surveys.
Product Engagement
Engagement with your product is another factor to consider when evaluating the effectiveness of partnerships.
In a perfect world, your partners would have a strong stake in your product. For instance, if you offer product training during partner onboarding, those that have invested the time to teach their staff about your product will likely be more beneficial to you in the long term.
You should be asking questions like
- Has your partner created a way to integrate their product with yours?
- How many people have received certification for your product?
- Can they confidently guide customers through the sales funnel?
- Do they use multiple products from your portfolio?
Scope of Work
For any joint work projects you and your partner collaborate on, you should always demand Scope of Work (SOW) paperwork. Clarifying expectations through SOW papers lowers the possibility of misunderstandings. They also aid in controlling expenditures and cash flows and measuring progress towards strategic goals.
Why You Need a Partner Programme Platform to Track KPIs
To enjoy the benefits of brand partnerships, each division has unique performance metrics that you should track. By incorporating these indicators into a dashboard, users can identify issues as soon as they arise, allowing you to rapidly get back on track or meet your customers' needs.
A dashboard that collects team performance data can help you improve results by letting everyone know where they are in relation to the objectives you've established. The crucial sales KPIs it helps you track include:
- Sales growth: Using an analysis of sales growth trends, you can estimate and set realistic revenue goals
- Average profit margin: Calculates the typical profit margin for the sale of a certain item or product line
- Average purchase price: Calculates the typical sales value of transactions
- Product performance: Sort items according to their revenue performance.
Your marketing team can analyse marketing and sales data using a dashboard to identify which campaigns are producing the most sales. It could also help you actively monitor the development of various marketing channels employed by your team. Marketing teams can use a reporting dashboard to keep track of important KPIs, such as:
- Incremental sales: Indicates if your marketing efforts directly increase your sales income
- End action rate: Tracks the final action that your audience takes to assess the efficiency of your marketing initiatives
- The lifetime value to customer acquisition cost: This ratio assesses the connection between a customer's lifetime value and the cost of obtaining them.
Your most significant objectives and KPIs will always be at the forefront, thanks to a real-time dashboard. Metrics that are front and centre have various advantages. The most crucial performance measures for all users, whether they are individuals, teams, or departments, are visible at a glance.
A display of KPIs such as landing page conversion rates, website page views, website sessions, and visitor-to-lead conversion rates can be found in a real-time marketing dashboard. By doing this, your marketing team will have the knowledge necessary to modify campaigns in light of the most recent sales and marketing statistics.
Key Takeaways
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What are Partnership Marketing KPIs?
Partnership marketing key performance indicators KPIs are measurable indicators that you can track to see whether your partnership marketing strategy is going as planned.
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How Do You Measure Partnership Programme Performance?
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Strategic KPIs
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Financial KPIs
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Which Financial KPIs Should You Be Measuring? - Digital & Affiliate
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Return on Investment | Return on Ad Spend
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Conversion Rate:
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Lead Volume, Order Value & Revenue
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Customer Lifetime Value (LTV)
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Cost Per Lead
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The Multi-touch Attribution Model
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Click Through Rate (CTR)
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Cost Per Acquisition (CPA)
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Cost Per Click (CPC)
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Earnings Per Click
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Which Strategic Partnership KPIs Should You Be Measuring?
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Partner Values
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Customer Satisfaction
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Partner Satisfaction
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Product Engagement
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Scope of Work
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Keep Track of Your Progress
Long-term relationships with partners can result in wonderful outcomes, but they need a fair amount of time and effort.
Creating KPIs for your relationships with brand partners improves your ability to collaborate with them. Getting two cultures to cooperate so they can work together effortlessly towards common business goals requires careful planning.
Once you start tracking your financial and strategic KPIs, you get a fresh perspective on how successful your collaborations are and can be. Making decisions with confidence and forging low-risk alliances requires a thorough understanding of the complexities of the partnership marketing ecosystem.
Download our Partnership Marketing Playbook to discover how to launch the right partnership marketing programme for your business and create successful alliances. Learn everything from how to apply the right strategy, measuring brand partner campaign performance and scaling programmes to grow your business.
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