The promotional products industry’s market value keeps increasing every year, and that could only mean one thing for you as a distributor – more room to expand. However, you will encounter lots of challenges along the way, thus you need effective solutions to ensure you stay competitive this year and beyond.
Among your best choices is to partner with a solutions provider to leverage services and tools that can help you run your business more efficiently, but even that has a catch. You want to be sure you are getting the best return on investment (ROI) from your collaboration but you can’t do that if you don’t understand a couple of basics.
This article will, therefore, take you through everything you should know to ensure your partnership is worthwhile.
What Is Partnership ROI All About?
When you combine efforts with a solutions provider to boost the success of your promo product distribution business, you will want to access the technology and knowledge you need to run your operations more efficiently. In this case, therefore, partnership ROI is a measure of the value you get from the partnership with a solutions provider relative to the resources you’ve invested in establishing and maintaining that partnership.
As one of the top solutions providers in this industry, AIA provides an easy way to determine this metric with their promotional product companies ROI calculator. That way, you won’t have to resort to manual processes to find out whether you are getting the value you’re expecting from collaborative efforts such as strategic alliances, channel partnerships, and more.
Key Tips for a Deeper Understanding of Your ROI
If you’re trying to understand partnership ROI better as a promo products distributor, you may want to consider the following tips:
1. Identify Your Partnership Goals
The first step to understanding and gauging partnership ROI is to outline your partnership goals clearly. Ask yourself why you have joined efforts with or sought the services of a solutions provider to improve the performance of your business. You should also take the time to find out whether and how the solutions partner aligns with your mission and vision.
What are they doing to support your strategic goals and priorities? Make sure your goals are SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). They should also align with your partner’s objectives and expectations and depict the mutual benefit of your collaboration.
2. Select Your Partnership Metrics
There is a range of metrics that will come in quite handy in assessing the ROI of your partnership with a solutions provider. Such indicators should be measurable to ensure you can determine how satisfactorily you are progressing towards partnership goals. Additionally, they should be valid, reliable, and verifiable.
In most cases, metrics will be divided into input metrics, output metrics, and outcome metrics. Input metrics are used to measure the efforts and resources being invested in the partnership. Output metrics, on the other hand, help you work out the immediate results and deliverables produced in the process. Finally, there are outcome metrics which evaluate the intermediate and long-term benefits and effects for target audiences and stakeholders.
3. Collect and Analyse the Partnership Data
Next, you will need accurate and up-to-date data to ensure that you are working out the value of your partnership based on factual information. There are lots of ways to collect such data, but most of it should be in the business systems and tools you are using such as your customer relationship management (CRM) systems, order and sales systems, and the other systems that collect data about your processes.
That way, you can figure out whether the solution provider’s promise to enhance your customer acquisition efforts, for example, has become a reality. After collecting or fetching the data, you should analyse and present it in a way that increases comprehensibility. Some of the useful tools in this process will be data analysis software, charts, graphs, etc.
4. Calculate Your ROI
The fourth step to getting a better grasp of partnership ROI is calculating the actual ROI. You can calculate the ROI based on elements such as revenue generation, market expansion, cost efficiency, brand enhancement, risk mitigation, and innovation & product development. The easiest formula for calculating ROI simply compares the value of the partnership’s outcomes to the cost of your inputs.
The formula you use is as follows:
Partnership ROI = Net Return on Investment/Partnership Inputs * 100%
Net Return on Investment = Partnership Outcomes – Partnership inputs
The ROI calculated using this formula should be in the form of a percentage. Therefore, an ROI value of 100%, for instance, means that for every dollar you invested, you gained a dollar in value. As you may expect, however, there are several other ways to calculate ROI, based on your data and the nature or scope of the partnership.
Improving the Value of Your Partnership
After understanding how ROI works and calculating this value for yourself, the next logical step would be to find ways to enhance the value of your partnership. In most cases, if you are working with a goal-oriented solutions provider like AIA who is focused on ensuring your business thrives, they will be the ones to initiate this process.
You will want to team up with the solutions provider to leverage data and obtain feedback from both sides to determine the strengths and weaknesses of your partnership. That way, you can create and implement new plans to enhance and sustain the value of your partnership. Again, tools like SMART goals and SWOT analysis will be of great value here, guiding you in determining the steps and tasks you will need to achieve your goals based on previous results and your current situation.
To ensure continuous improvement, create a model that requires you to assess the value of your partnership continuously or after a certain threshold. That way, you can create an environment that fosters constant improvement by leveraging enhanced collaboration, reliable communication, and frequent evaluation.
Enjoy Great ROI Performance With AIA
You’ve probably heard the adage “If you can’t measure it, you can’t manage it”, before. In this case, we can confidently tweak that to read, “If you can’t measure it, you can’t partner effectively”. Since your promotional products distribution business relies on effective partnerships, you should make sure you’re working with a solutions provider you can rely on.
AIA is such a provider. With a team of industry experts and entrepreneurs who’ve mastered the art of building and supporting distributors’ growth journeys, you are sure you’re in safe hands. So head over to aiacommunity.com and see the distributor’s solutions they have for you. And when you feel stuck, their support team is always ready to hold your hand and walk you through.
