How to Use KPIs to Monitor Setting up strategic partnerships with contractors

Strategic partnerships with contractors are a smart growth move for building materials distributors. Done right, they deepen loyalty, increase repeat business, and improve jobsite service. But to manage what you build together, you need to measure what matters.

KPIs (Key Performance Indicators) are how you track the health, value, and effectiveness of your contractor partnerships—especially as they scale. Without KPIs, your “strategic partnership” can become a vague handshake deal with no accountability.

Here’s how to use KPIs to monitor, strengthen, and refine contractor partnerships—from setup through growth.

✅ Step 1: Define Partnership Objectives First

Why it matters:

KPIs only work when they reflect clear goals.

Common Partnership Objectives:

Increase contractor retention and wallet share

Improve delivery speed and jobsite satisfaction

Reduce backorders and errors for high-volume partners

Streamline order workflows and communication

🎯 Before you measure performance, define what success looks like—for both parties.

📊 Step 2: Select KPIs That Reflect Value and Accountability

🔹 1. Revenue and Volume Growth From Strategic Partners

What it tells you:

Is the partnership generating real business impact?

Track revenue by contractor account

Measure year-over-year growth in sales, orders, or delivered tonnage

Set baseline goals and review monthly or quarterly

🔹 2. Order Accuracy and On-Time Delivery Rate

What it tells you:

Are you meeting service expectations and minimizing jobsite disruption?

Measure on-time, in-full (OTIF) percentage for each partner

Track error rate in picking, packing, and loading

Use this data to strengthen logistics or adjust delivery windows

🚚 Reliable fulfillment keeps partnerships strong.

🔹 3. Repeat Purchase Frequency

What it tells you:

Are your partners coming back consistently?

Track orders per month or per project cycle

Monitor time between purchases to spot potential churn

Segment by contractor size or specialty to identify trends

🔹 4. Customer Satisfaction or Net Promoter Score (NPS)

What it tells you:

How do contractors feel about the partnership?

Run brief surveys after deliveries or project completions

Use NPS or CSAT to measure satisfaction with service, support, and product availability

Track trends and respond to feedback

🔹 5. Credit Usage and Payment Performance

What it tells you:

Are your partners financially healthy and reliable?

Monitor days sales outstanding (DSO) for strategic accounts

Set credit thresholds and flag overdue accounts

Balance loyalty with risk mitigation

💳 A great partnership includes financial transparency.

🔹 6. Partner Engagement Metrics

What it tells you:

Are your contractors actively engaged with the program?

Track use of your contractor portal, mobile app, or digital order tools

Monitor attendance at partner events or training sessions

Measure participation in early-buy programs or co-branded marketing

📲 Engagement signals commitment on both sides.

✅ Step 3: Share KPIs With Internal Teams and Partners

Why it matters:

KPIs only drive improvement when they’re visible and actionable.

What to Do:

Build dashboards for sales reps, branch managers, and leadership

Share quarterly scorecards with each partner to review progress

Use data to drive joint planning sessions and adjust service levels

📣 When both sides see the data, alignment gets easier.

✅ Step 4: Use KPI Trends to Improve the Partnership Program

Why it matters:

KPIs don’t just track performance—they help evolve the strategy.

What to Do:

Identify top-performing partnerships and replicate their success

Flag at-risk partners early and respond with re-engagement strategies

Use feedback and trends to refine benefits, support, or delivery models

🔁 Great partnerships are managed like key accounts—with insight and intent.

🧠 Conclusion: KPIs Turn Contractor Partnerships Into a Competitive Advantage

Strategic partnerships with contractors can transform your business—but only if you track the right metrics. With clear KPIs in place, you’ll know what’s working, where to improve, and how to turn loyalty into long-term revenue and operational efficiency.