Spur Reply | Thought Leadership

How to Measure the Quality of Your Partner Ecosystem

Written by Stephanie Graves | Oct 25, 2024 2:35:31 AM

The modern ecosystem

The technology industry is evolving—consumers are changing, and with them the buyer’s journey. Younger buyers are driving an increased emphasis on a digital buying journey that depends heavily on influencers to guide their decisions, and these learned behaviors are impacting the B2B buying journey as well. Additionally, customers in general are prioritizing holistic solutions that solve their needs. As a result, technology vendors can no longer deliver those solutions in a silo. 

Traditionally, the notion of the channel was a resale partnership focused on the point of transaction.

However, to address their customers’ growing need for holistic solutions, organizations are now developing ecosystems comprised of collaborative partners who work together to deliver a unified solution. Partners are reaching new markets, delivering localized support, streamlining offerings, and providing customers the end-to-end support they need on their digital buying journey. 

Just as the way the vendor-partner relationship is evolving, so must the way vendors measure success and reward partners.

Recognizing partner value beyond the transaction

So how can you make sure your partner ecosystem is set up to withstand these changes and continue to deliver value?

To understand and grow your ecosystem, you first need to evaluate it to identify opportunities for optimization. Improvement starts with a strong ecosystem scoring model.  

Spur Reply’s scoring model uses the ‘6 C’s’ framework, which evaluates the following:

Contribution: We refer to contribution as “sales velocity” and it’s generally measured by revenue both directly and indirectly (“influenced”) contributed by the partner.

Capability: Capability refers to “skill level” and is typically measured by certifications, accreditation, or specializations.

Coverage: Relating to market focus, you can evaluate coverage by looking at customer wins by segment or geography.

Commitment: Also known as, “competitive alignment,” we measure commitment with a variety of different growth rates, whether that’s revenue, new logos, or expansions, to name a few.

Consumption: Consumption ties back to customer lifetime value and is measured with metrics like churn, annual recurring revenue, or net revenue retention.

Credibility: The sixth ‘C’ is “customer satisfaction,” which is generally measured through customer survey responses or reviews to demonstrate a partner’s credibility.

Together, the 6 C’s give us a framework to define and measure the most relevant value drivers for any vendor’s partner ecosystem, opening up a world of opportunities to refine their partner strategy. Oftentimes, vendors we work with lack a holistic partner scorecard, have a hard time defining “partner value,” or simply don’t understand how partner scoring has evolved. 

This framework equips us with the right insights to better educate and understand our clients, allowing us to make informed decisions and recommendations. 

The 6 C’s not only gives a vendor a holistic view into partner performance, but the approach is also highly flexible in that it allows vendors to customize their partner scorecard based on the strategy, unique makeup of the ecosystem, and the specific needs of the firm. 

Deciphering the most important areas of your ecosystem to invest in

As mentioned in the previous section, the resale relationship has historically been measured on contribution and capability. It creates a simplistic picture, but one that is easy to analyze. You can plot partners on a 2x2 and easily see where you may need to invest in, recruit, or even prune non-productive partners from your ecosystem. Coverage and commitment have also been important measures for years but generally aren’t a focus for these older scoring models. 

In recent years, however, we’ve seen the importance of consumption and credibility measures increase as vendors shift their focus to driving technology adoption and post-sales customer outcomes. 

As we consider the 6 C’s framework with clients, we encourage them to look at their efforts and filter through the outcomes they are trying to achieve. Is it a sales program they’re creating? Or is it about driving commitment and growth around specific products and activities? Is the goal to drive consumption or are they more focused on helping partners better serve customers?

By evaluating, scoring, and weighting each of these elements, you get an accurate picture of your partners’ revenue capacity. You can then rate them into peer-level groups and rank them by capacity rating. As your business or ecosystem changes, you can adjust your model and weighting to accommodate the shifts. 

Three common challenges you can address with the 6 C’s framework

At Spur Reply, we often find our clients are dealing with one of three common challenges within their ecosystems and we regularly use our framework to address them. Here are the three issues and how we approach them:

Challenge #1: Limited visibility to ecosystem capacity

The first common customer challenge we find is a lack of partner capacity planning, which is important for providing insights into partner performance and potential gaps in the ecosystem. 

Think of partner capacity planning like making sure a team has the right players for a winning season. For technology vendors, it means assessing whether their partners have the skills, resources, and reach to meet sales goals. Partner capacity planning involves identifying any gaps in partner capabilities and developing strategies to bridge those gaps, ensuring they can meet sales targets and deliver a positive customer experience. Ultimately, it's about optimizing your partner ecosystem to maximize revenue and growth.

Insufficient partner capacity planning is a common roadblock for technology vendors, often leading to missed revenue targets and inefficient resource allocation. When vendors lack visibility into their partners' capacity—their available resources, skills, and bandwidth—they can't strategically align partner engagement with market opportunities. 

This can lead to overburdening high-performing partners or underutilizing those with untapped potential. An ecosystem scoring framework addresses this challenge by offering a data-driven way to assess and monitor partner capabilities. It provides insights into which partners have the capacity to take on new initiatives, expand into new markets, or invest in skill development. This knowledge empowers vendors to make informed decisions about partner selection and resource allocation, maximizing the effectiveness of their ecosystem programs.

Here are some phrases that might signal need for this type of effort, including concerns about partner performance, questions about resource allocation, a desire for data-driven insights, or most commonly, general uncertainty about capacity planning and the value it can provide.

Phrases signaling need: Partner capacity planning

Concerns about partner performance:

  • “We're not seeing the results we expected from our partners.”
  • “We need a better way to track partner progress against goals.”

Questions about resource allocation:

  • “Do we have the right partners in place to meet our objectives?”
  • “How can we identify skill gaps within our partner network?”

Desire for data-driven insights:

  • “We need better visibility into partner performance data.”
  • “How can we use data to optimize our partner relationships?”

Uncertainty about capacity planning:

  • “How can we identify partners with the potential for high growth?”
  • “What tools can we use to forecast partner performance?”

Partner dashboards as the key to unlocking capacity planning

Understanding your partner capacity is crucial—but it's just one piece of the puzzle. Effective partner scoring takes that capacity data and combines it with other key performance metrics to paint a complete picture of your partner ecosystem.

A robust partner scoring system addresses challenges in your ecosystem head-on. It provides a data-driven framework to:

  • Objectively assess partner performance
  • Identify top performers and areas for improvement
  • Prioritize investments
  • Drive accountability

Imagine driving a car without a dashboard. You wouldn't know how fast you're going, how much fuel you have left, or if there's an engine problem. Partner performance dashboards are like that dashboard for your partner ecosystem. They give you critical insights into how your partners are performing, where they're excelling, and where they need support.

Partner dashboards become instrumental in operationalizing the insights from a scoring framework. They provide a transparent view of partner performance and capacity, allowing both vendors and partners to proactively identify and address capacity constraints. 

There are several reasons why partner performance dashboards are invaluable, especially if you're currently lacking capacity planning and partner scoring:

  • First, dashboards consolidate key metrics from across your partner program into a single, easy-to-understand view. At a glance, you can see how your partners are contributing to revenue, pipeline, customer satisfaction, and other important goals.
  • Dashboards also inform data-driven decisions and can alert you to potential problems before they become major issues. For example, a sudden drop in a partner's sales or customer satisfaction could indicate a need for intervention.
  • Finally, sharing relevant dashboard data with your partners fosters transparency and collaboration. This data allows them to see how they're performing against benchmarks, identifies areas for improvement, and motivates them to strive for higher levels of performance. When we conduct partner interviews for our clients, this is one of the most common requests. Partners want additional visibility to help them manage and grow their business.

In short, partner performance dashboards are not just a nice-to-have; they're a necessity for any technology vendor that wants to maximize the value of its partner ecosystem. By providing visibility and data-driven insights, dashboards empower you and your partners to make smarter decisions, optimize relationships, and drive mutual success. Partner scoring and capacity planning are not one-time exercises, but critical pieces of building an informed ecosystem strategy year after year. With strong dashboards, you will have the foundation needed for successful ongoing scoring and planning.

Challenge #2: Suboptimal or ineffective partner incentives

The second common challenge we hear about from clients is that partner incentives aren’t optimized to drive desired behaviors.  

Imagine a game where the rules are unclear, the scoreboard is broken, and the rewards are random. Would you be motivated to play? 

Probably not. Yet, this is often how dealing with partner incentives feels.

When partner incentives aren't optimized, it creates a ripple effect of problems:

  • First, you might see misaligned behaviors. If incentives don’t align with strategic goals, it can lead partners to focus on the wrong activities. They might prioritize short-term wins over long-term value or chase easy deals instead of complex solutions that drive customer lifetime value.
  • Or you may encounter wasted resources. Money spent on ineffective incentives is money down the drain. It doesn't drive the desired outcomes and can even demotivate high-performing partners.
  • Next, you have partner dissatisfaction. When partners feel their efforts aren't recognized or rewarded fairly, their enthusiasm wanes, and they may look for greener pastures.
  • Or finally, you may have missed opportunities. A poorly designed incentive program can prevent you from attracting and retaining top-tier partners who could significantly boost your business.

But how can a partner scoring framework help solve this challenge? Think of it as a map (or a book of cheat codes for that previously mentioned game). A framework provides you with a proven path to designing the incentives your ecosystem needs. It provides the data and insights necessary to:

  1. Identify high-impact activities: By analyzing partner performance data, you can pinpoint the activities that truly drive revenue, customer satisfaction, and other key objectives. This allows you to design incentives that reward those specific high-value behaviors.
  2. Tailor incentives: Not all partners are created equal. A scoring framework helps you segment partners based on their strengths, weaknesses, and potential. This enables you to create tiered incentive programs that cater to the unique needs and motivations of each partner type.
  3. Measure and optimize your efforts: A scoring framework provides a continuous feedback loop. You can track the impact of your incentives, identify what's working and what's not, and adjust as needed to ensure your program is always optimized for maximum effectiveness.

At its core, this challenge is about ensuring incentive investments are optimized to drive partner engagement and desired activities while improving return on investment (ROI). In essence, a partner scoring framework transforms incentive design from guesswork into a science. 

Here are some phrases that might signal a need for partner incentive optimization, including concerns about partner engagement, questions about incentive effectiveness, desire for program improvement, or uncertainty about best practices:

Phrases signaling need: Partner incentive optimization

Concerns about partner engagement:

  • “Our partners aren't motivated to sell our products.”
  • “We're struggling to get our partners to prioritize our solutions.”

Questions about incentive effectiveness:

  • “Are our current incentives actually driving the right behaviors?”
  • “We're not sure if our incentive programs are delivering the right ROI.”

Desire for program improvement:

  • “We need to revamp our partner incentive program.”
  • “We're looking for ways to optimize our channel incentives.”

Uncertainty about best practices:

  • “What are other companies doing for partner incentives?”
  • “We need help benchmarking our incentive programs.”

Setting the table for incentive planning

Partner scoring with the 6 C’s framework can help you shape your mix of incentives used to drive high-value partner behaviors.

Partner incentives likely fit into one of five buckets:

  1. We call the first bucket transaction proficiency. These are incentives that reward a partner based on the mechanics of the deal. This could be an incentive to sell a product or win a specific customer on a targeted account list.
  2. Capability development incentives are usually offered when you launch a new product. These incentives are all about getting a partner ready around a specific solution. They may include offsets for training people or rebates for winning their first deal with the new product.
  3. Demand generation incentives are usually part of a deal registration system and help offset a partner’s cost of sales. An example is supporting partners that run proof of concepts. The goal of these incentives is to reward partners for finding and closing opportunities.
  4. Performance attainment incentives are rewards for hitting specific, usually time-bound, targets such as growing by X percent or selling Y volume on a quarterly or annual basis.
  5. And finally, customer commitment incentives are rewards for driving adoption and customer outcomes, such as rebates based on on-time renewal or activation rates.

As you can see, there is a natural alignment between the 6 C’s and each of these incentive types. 

When determining which incentives to use, start by looking at a distribution of scores across each “C” measure. Then look at where a territory, partner segment, or individual partner lays in relation to the rest of the partner ecosystem. These insights will inform your decisions on where to focus incentive dollars. 

For example, if one of the 6 Cs scores poorly at a territory level, you know you need to stimulate that behavior. Inversely, if a key area scores well, then you can probably save your money for that category. Additionally, if you have global or cross-territory responsibilities, you can rank the territories by their capacity scores to determine into which markets to prioritize your efforts.

A strong partner scoring model is important because it gives you two things. First, it gives you a good framework that shows you how to recognize where you need to prioritize your investments.
Second, and perhaps more importantly, it gives you a data-driven model you can use to develop a strong business case for executives and finance about where your organization should concentrate those investments and why. 

Challenge #3: Misalignment in partner program strategy

Lastly, our third commonly faced customer challenge is misalignment in the partner program strategy.

Imagine this scenario: a technology vendor launches a new partner program with high hopes. They expect a flood of new partners, increased sales, and delighted customers. Yet, months later, the reality is starkly different. Partners are disengaged, sales are sluggish, and customers are left confused. What went wrong?

Often, the culprit is misalignment in the partner program strategy. The program's objectives, incentives, and requirements may not align with the vendor's overarching business goals or the ecosystem’s capabilities and needs. 

Some common concerns we hear from clients that signal a closer look at their partner program strategy is needed include program ineffectiveness, a lack of clear requirements, misalignment with business goals, and a desire for a structured design approach.

Phrases signaling need: Misaligned partner program strategy

Concerns about program effectiveness:

  • “Our partner program isn't delivering the results we need.”
  • “We're not attracting the right kinds of partners.”

Misalignment with business goals:

  • “We're not sure if our partner program is contributing to our growth objectives.”
  • “We need a partner program that drives revenue/market expansion/customer outcomes.”

Lack of clear requirements:

  • “We're struggling to define the requirements for a successful partner program.”
  • “We need help clarifying our partner program's value proposition.”

Desire for a structured approach:

  • “We're looking for a proven partner program design framework.”

Again, this is where a robust partner scoring framework comes into play. It serves as a compass, guiding the design and execution of a partner program aligned with both vendor and partner objectives. 

Partner scoring will allow vendors to:

  • Identify and recruit partners whose capabilities and goals align with the vendor's strategic objectives
  • Drive mutual success, creating win-win partnerships where both the vendor and partners achieve their business goals
  • Tailor program requirements and incentives to maximize partner motivation and performance

A misaligned partner program strategy can derail even the most well-intentioned initiatives. Without a clear connection between program objectives and broader business goals, a structured approach to design and execution, or the right requirements, vendors risk demotivating partners and missing growth targets. With the right strategy in place, vendors can execute a partner program that not only meets their goals but empowers their partners to succeed.

Why Spur Reply

You should now have a better grasp on what partner scoring is, why it matters, and how you can generate quick wins for your ecosystem strategy. 

Measuring the quality of your go-to-market ecosystem is crucial for sustained success. Using the 6 C’s framework as a starting point will give you the roadmap you need to strengthen your performance. With a defined approach to partner scoring, you can ensure your ecosystem remains resilient, adaptable, and capable of delivering holistic solutions that meet the demands of modern buyers.

Spur Reply provides a broad spectrum of ecosystem services tailored to individual client needs. We bring deep business and technology expertise to each project to maximize impact, offering practical, targeted solutions to help you see results that matter faster. We help our clients maximize ROI, accelerate revenue growth, and enhance ecosystem value. 

If you know you need to get started but don’t know where to begin, you can reach out to us here and someone from our team will get in touch.