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Success Hacks — 12 Dec 2022
10 Partner Marketing KPIs to Track
We all know that tracking our KPIs is critical for measuring business success, but is it necessary for measuring the effectiveness of our partner marketing programs?
Doesn’t the increased revenue – or the lack thereof – pretty much speak for itself?
While, yes, revenue metrics are certainly accurate success indicators, they aren’t the only KPIs (key performance indicators) you should be tracking. In fact, by focusing on revenue metrics alone, you’re potentially limiting your business’s chances of sustainable growth and long-term partnership success.
There are actually a whole host of useful metrics that give you valuable, actionable insights into the performance of your partner program. So, let’s take a closer look.
Partner marketing, (also known as partnership marketing or channel sales marketing), is when two brands with aligned goals combine forces to collaborate on a mutually-beneficial campaign. This could be anything from the joint creation of a whole new product, to an affiliate marketing model or content marketing partnership.
Partnership marketing is a suitable venture for businesses in a wide range of industries and niches. It also perfectly complements direct sales initiatives. Whether you’re an SaaS enterprise or an ecommerce startup, forming a partnership alongside your direct sales strategy is not only achievable – it’s extremely beneficial.
In fact, the benefits of partnership marketing are quickly becoming revolutionary thanks to the explosion of ecommerce. Affiliate marketing spending has risen considerably in the last ten years, with more businesses than ever implementing partnerships into their marketing campaigns.
According to Statista, affiliate marketing spending will reach $8.2 billion by the end of 2022.
So, chances are that if you haven’t already started your partnership program, then you’re certainly thinking about it. But are you also thinking about your partner marketing KPIs?
Partner marketing KPIs are quantifiable metrics that you can monitor to track the success of your partnership marketing strategy. This might be done at a campaign, program, or channel level.
You’re probably already tracking your number of partnerships, your deal registrations, and the revenue that they generate, but it’s essential that you think holistically when it comes to assessing partnership success. This means tracking all of the KPIs that make up the intricacies of your program.
If this sounds like a lot of manual work on top of your other partnership activities – well, it doesn’t have to be. By leveraging a partnership marketing management (PRM) solution with advanced automation capabilities, you’ll be free to focus on program strategy and leave the tedious stuff to the AI.
The power of partnership marketing comes from its incredible ability to boost your company’s brand awareness, customer retention rates, market share, and bottom line, all of which increase your capability to drive exponential growth.
But if you aren’t tracking your KPIs, you might never reach those heights.
As the old adage goes: “if you can’t measure it, then you can’t improve it”. KPIs are important because they measure the value of your partnership programs and their potential for long-term success. It isn’t enough to focus on revenue alone – you need to monitor and analyze your channel program from multiple angles in order to accurately gauge what’s working and what isn’t.
If your profits are flatlining or declining, assessing these KPIs will help you pinpoint where improvements need to be made.
And if you’re turning a profit, these metrics will tell you what you’re doing right (and how you can do it even better to promote business growth).
Your KPIs are the guiding lights to your partner marketing efforts and provide your sales process with evidence-based integrity. So, what are the KPIs that you should be keeping track of? Well, look no further.
Return on Investment (ROI), sometimes referred to as Return on Ad Spend (ROAS), is a measurement used to determine the overall profitability of an investment. In partnership marketing, ROI represents the profitability of a partnership marketing investment, usually at a channel or campaign level.
Naturally, ROI is one of the go-to metrics for marketers to focus on. It can give you valuable insights into the success of your marketing strategy, from indicating the profitability of any given campaign to determining whether marketing dollars can be increased towards partnership programs.
The standard method of calculating ROI is as follows:
ROI = benefit / cost of investment x 100.
Pretty simple, right? However, calculating your ROI or ROAS in relation to a partnership marketing strategy is slightly more complex.
A customer’s journey is often more skewed and unpredictable when they’re a partner-generated lead, which makes sales attribution difficult to pinpoint. And with siloed customer relationship management (CRM) systems may not quite up to the job, the standard cost-to-benefit ratio doesn’t always portray a valid ROI.
So, what can we do to get a more accurate picture of our partner program ROI? Here are some things that you should consider and implement into your ROI analysis:
This simple but powerful metric shows you the ratio of clicks to impressions; basically, how many people saw your ad, clicked through to your landing page, downloaded a form, and other onsite metrics.
Your click-through rate is usually expressed as a percentage. For example, if you had five click-throughs and 50 impressions, your click-through rate would be 10%.
Monitoring click-through rates is a good way for your marketing team to source and identify qualified leads. For a partnership to work, the audiences of both brands need to exist in similar target markets (although, of course, they need to be different enough to drive new revenue).
A low click-through rate might suggest that you’re targeting the wrong audience, whereas a high click-through rate indicates that your partner’s audience expresses initial interest.
Knowing how many customers convert after clicking on a tracking link will never cease to be one of your most important metrics.
When it comes to partnership marketing, your conversion rate gives you insights into various aspects of your partnership’s success, from the suitability of your partner’s audience and the relationship that they have with their customers, to the success of your collaborative marketing strategy as a whole.
The formula for calculating your conversion rate is as follows:
Conversion rate = the total number of conversions / the total number of clicks x 100
Cost per acquisition is a valuable KPI for tracking the revenue impact of performance campaigns. It measures the aggregate cost of acquiring a converted customer via a specific marketing channel or campaign.
The formula is as follows:
CPA = Total Advertising Cost/Total Number of Conversions
So, if you spent $1,000 on a social media campaign and the campaign yielded 50 conversions, then your CPA would be $20.
Cost per click relates specifically to how much money you spend per ad click in a PPC marketing campaign. In a partner marketing strategy, this ad might be an advertisement displayed on your partner’s website or an affiliate link they’ve placed in an email.
The formula is as follows:
CPC = Total cost of relevant advertising / total number of clicks.
For example, if you spent $2,000 on a display campaign that resulted in 200 clicks, then your CPC would be $10.
How engaged are your partners with your program?
It’s common to assume that once a deal is made, your partner will go on to engage with consistent enthusiasm. However, this isn’t always the case. Even if you’ve mapped out your partner journey and provided sufficient resources, there’s no guarantee that your partner will engage.
It’s highly likely that your channel partners have established relationships with a range of vendors spanning across their marketing and sales teams. They’ll also have new vendors vying for their attention. Because of this, it’s up to you to be persistent in your efforts to motivate and engage partners across different types, geography, and channel programs.
Keep a close eye on the frequency and eagerness in which your partners engage with your partner program. For example, you might investigate the following questions:
Remember, an engaged partner is a satisfied partner who is more likely to pursue and generate success. You can track partner-specific information through your partner portal or by utilizing marketing automation tools.
Also, don’t be afraid to reach out and communicate. You can measure partner satisfaction through surveys, quarterly business meetings, or informal catch-ups.
Measuring end-customer satisfaction within a partner marketing strategy can be difficult due to the fact that you don’t have direct access to, or visibility of, your partner’s customers. It’s a common practice to let the revenue speak for itself, but this can sometimes backfire down the line and enable your partners to create dissatisfied customers.
Track how successfully your partners are selling, marketing, and supporting their customers, both through customer surveys, social media monitoring, and honest, empathetic communication with partners.
Affise Reach grants you access to thousands of high-quality networks dedicated to providing the best customer service possible. You can even leverage our data transfer CPAPI to automate the sourcing and communications process with confidence.
Another key indicator of partner satisfaction and program success is your channel churn rate.
It can take some time and effort for a new partner to deliver a return on investment, which can put a high price on the onboarding process. If your partners keep disappearing, it’s a reliable indicator that some aspect of your program isn’t performing well.
Measuring partner engagement can help to prevent high churn rates. If you notice that a partner is starting to disengage, try reaching out to your partner’s channel account manager and encourage them to communicate any issues or areas for improvement. You should also be consistently sharing your KPIs with your partner (as well as your KPI expectations).
Effective communication will strengthen your relationship and, hopefully, prevent partner churn.
With Affise Reach for brands, you can source perfect-fit partners who encapsulate your brand’s message and values from the get-go, increasing your chances of partner marketing success.
Earnings per click is a measurement used by partners to calculate the average amount of revenue they can expect for each click they generate.
Earnings per click is one of a partner’s most important metrics, as it estimates their earning potential on a CPA basis and, to a notable degree, also dictates the partnerships they make and keep.
The formula is as follows:
EPC = The total amount of commissions you earn / the number of clicks you obtained with your affiliate links.
If your partner isn’t already sharing this metric with you, encourage them to do so. Tracking this KPI can have a huge impact on your program’s payment structure.
Customer lifetime value refers to the total value of a specific customer over the entire course of their relationship with your business. Your customers with high lifetime values are those who make repeat purchases, have higher purchase averages, sign up to your referral programs, and evangelize your brand by sharing their experiences with friends and family.
High-value customers are cheaper to acquire than new customers. They also generate more revenue and play a vital role in your brand awareness and credibility strategy. So you want to attract as many of them as you can.
When it comes to partner marketing, you need to evaluate whether your partner-generated leads are bringing in any high-value customers. A partner who generates a small number of high-value leads is just as valuable (if not more valuable) than a partner who generates a lot of one-time customers.
Some types of partnerships (like influencer partnerships) are growing in popularity due to their ability to bring in high-value customers.
Affise’s partnership marketing management solution consolidates a host of your essential partnership marketing tools into one robust technology, enabling you to keep all of your KPIs in check. Along with lifecycle management, partner enablement, and partner engagement functions, you can also use KPI automation to optimize your traffic sources and marketing funnel.
Affise helps to bridge the gap between you and your partners. The PRM facilitates effective communication and collaboration, allowing you to accurately evaluate partner performance and monitor the KPIs that matter to you.
When it comes to tracking partner marketing KPIs, it pays to look beyond revenue. With so many interconnected factors making up your program strategy, it’s critical that you gain as much visibility over the process as you can.
Tracking the right KPIs (with the help of an advanced PRM tool) provides you with the data-driven insights you need to make pivotal business decisions at the right times. It might be that you need to work on sourcing partners with more suitable audience bases, or creating a strategy to boost partner engagement. Whatever the case, tracking your KPIs will make sure that you’re never left in the dark.
There might be other KPIs you need to track depending on your partnership type, channel maturity, target market, and a host of other factors. However, the above ten KPIs are pretty universal and should make up the backbone of your statistical analysis.
By keeping a close eye on these KPIs, you can significantly maximize your chances of partner marketing success. Remember, if you can’t measure it, you can’t improve it.
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