For anyone is sales, CRM is a way of life and companies such as Salesforce have built billion-dollar businesses around managing customer relationships. But what about PRM? Like CRM, Partner Relationship Management – or PRM – has been around since the late 90s but unlike CRM, it is designed specially to manage sales through indirect channels.
The fact the PRM is gaining momentum and becoming a growing focus of attention is not surprising as it is estimated that some 75% of B2B sales are made through indirect channels. Furthermore, a recent Impartner survey shows that nine out of ten hiring managers are finding it difficult to recruit direct sales professionals. As a result, companies are increasingly turning to indirect channels to deliver sales and business growth.
What is more surprising is that that many vendor companies still rely on spreadsheets, home grown portals or a hotchpotch of point solutions to manage their channel programmes. Others have tried traditional CRM systems, but these CRM platforms were designed for the direct sales force and those strengths capabilities don’t translate well into the channel. The flat architecture of direct sales—where one lead is assigned to one internal sales person—can’t support the complexities of multi-tiered, multi-national partner relationships reflected in most channels.
The PRM market is also evolving and maturing to meet the needs of today’s channel. Early PRM was all about opportunity management, lead distribution and deal registration, while the partner portal quickly evolved to meet the requirements of knowledge transfer and content management. But today’s PRM solutions also include support for MDF, training and certification, incentive programme management, onboarding, communications, channel-specific business intelligence and analytics. There is also a growing ecosystem of interoperable ‘martech’ systems that bring together other elements of channel marketing and automation.
PRM systems are designed to service the complex, multi touch points of the typical channel sale. Every company invests in its channel – but without insight and knowledge, it’s a case of flying blind. For example, how do you know who your top performing partners are to reward them, and which partners continually dwell at the bottom and should be cut?
Most vendors have highly capable and highly paid channel leaders who can recruit partners and work with them to create value strategies. But too often they are tied up doing routine work to track partner recruitment or MDF, rather than driving business. By automating the operational basics, this talent can focus on creating strategic relationships with partners.
Two questions continually rise to the top of every CFO’s conversation when reviewing the success of a partner program; how much did you spend on MDF and what did you get out of it? Just as frustrating is to find that money was budgeted for partners and wasn’t spent, because of unnecessary barriers or visibility. MDF engines should make it easy to see and track MDF spend and just as important, make it easy for partners to use their funds and help amplify the investment in marketing.
If you can’t see what your partners and direct sales teams are doing to protect a deal properly, you are likely to end up with channel conflict, legal exposure and partner attrition. But if instead you want to attract and motivate the best partners, your partner portal better match the promise. Research suggests that up to 86 percent of partners make their decisions to work with vendors, based in large part, on their partner portal.
And when it comes to onboarding, creating a good first impression around quality of experience will shape the relationship moving forward. The faster, more automated and more frictionless the process is, the better experience your new partners will have and the more quickly they will ramp to productivity.
In a competitive business climate where qualified sales professionals are costly and in short supply, companies more than ever need to build and support strong relationships with their channel partners or risk being left behind. PRM has certainly come of age and it’s time for vendors to stop struggling to manage partner programmes on spreadsheets and take a serious look at PRM.
Dave R Taylor is CMO of Impartner.