Segmentation of investment partners for growth potential can be better done through a four-step process that analyzes more than just a company’s surface specs, focusing on growth potential, rather than just valuation.
Segment Your Partners Based on Potential for A More Complete Investment Profile
What if you could make more informed choices when determining which partners will generate the greatest returns? Channel executives can benefit from having greater data at their disposal when making decisions on potential investments and target partnerships.
Marketers, for years, have been using increasingly scientific methods to segment their target market into the highest potential customers. These advanced segmentation methods have been based on attributes like customer behaviors, attitudes, strengths, needs, motivations, and other factors. The same techniques can be applied to vetting partnerships as well.
Certain business partners represent much higher growth and market potential than others. Traditional measures for determining a partner’s “worth” used metrics of total revenue or number of salespeople. But in today’s complex market, those simplified numbers do not necessarily reflect the value of a given brand. A more meaningful measure of worth combines several different variables, unique to each company, to calculate a partner's true value to your channel team.
Some of the obvious ways to analyze the desirability of a partner for your brand include total revenue, sale of competitor’s products and market position. But that data only tells a portion of the story and may not be the best predictor of growth potential. When attempting to identify the best candidate partners to invest in, consider these predictive factors such as market opportunities, business, sales and technical capabilities, and commitment level. See the illustration below that include specific criteria for each of these categories.
Each of these “potential predictor” categories can help you select partners that have expertise in the solution area you offer, and/or have a strong track record for your brand. But how do you go about obtaining this data in an organized, repeatable process.
Channel teams can be more systematic in how they gather data, profile partners, and analyze data, when determining the most desirable partnerships to invest in. Channel Manger tools provide a range of partner profiling, scorecarding, segmentation and analytic tools to help your channel organization find the most deserving partnerships for investment.
Four Steps to a Full Investment Picture
Our four-step process uses our automated channel management tools for segmenting and analyzing predictive variables.
Step 1: Collect Behavioral Data on Partners
This is data related to the outcomes of a partner’s actions to support your brand in the market. It includes sales performance-to-plan, pipeline performance-to-plan, accreditations or certifications achieved. These are outcome metrics that track the results of actions a partner has taken.
The Partner Performance Dashboard helps a channel team collect these key program metrics. The process engages the partner in a set of steps to build belief in the goals set and a commitment to achieve the goals. These performance metrics (i.e., percentage performance-to-plan) can be predictive variables that help segment your partners into more attractive target groups. Below is a snapshot from the Successful Channels Partner Performance Dashboard.
Step 2: “Interview” Your Prospects
Other predictive variable characteristics of high value partnerships can be found using the Successful Channels hosted partner questionnaire. Assessment interviews using this questionnaire can be done in a work session between the channel manager and partner and can assess the partner’s current status and build an action plan to improve their capabilities.
The Partner Capabilities Scorecard Questionnaire (illustrated below) allows for an easy Q&A format for generating data from responses, directly from the source, allowing the information to be seamlessly scored within the system.
The completed partner profile / scorecard questionnaire generates an overall scorecard report on the partner, with a score of 1-100 and stoplight indicators for easy-to-read performance readings on each metric.
The Capabilities Scorecard report below shows both the partner’s score for each variable and the score of its peer partners on this metric. These rankings can offer great insight into the potential of partnerships. This workflow makes it particularly simple to gather the data and provide partners and channel managers with an easy way to review and build improvement action plans based upon their scores.
Step 3: Effectively Segment
The new Successful Channels “Partner Ecosystem Mapping” system allows you to take both behavioral and questionnaire data to build segmentation scenarios of your partners. This can help to determine which are predictive of growth potential. This new feature allows you to select a variety of matrices and using data from Steps 1 and 2 to plot out your partners on each matrix. This on-the-fly segmentation provides an instant analytic engine to target investments with individual partners that represent the greatest potential return. Below you can see an the output from an ecosystem mapping.
All levels of your team, from regional channel managers to global level leaders can create multiple views simultaneously to classify partners by different attractiveness metrics and act on their highest potential partnerships.
Step 4: Review Across Partner Segments
Along with the above segmentations, additional profile reports are also available to further analyze your channel ecosystem. These include partner ranking reports based on Steps 1 and 2 along with category and topic reports.
Overall Partner Performance Ranking Report
Partner Profiling report by category and by topic
With this easy four step method and Channel Manager CRM and PRM-integrated tools, building and optimizing partner ecosystems and channel investment planning has never been easier. Scientifically rigorous, but amazingly user-friendly, these tools make selecting partners with the greatest potential value easily within reach.