Partner Relationship Management: a Strategy, Not a Technology

Guest Post by John Panaccione, CEO, LogicBay

We often get asked “What is Partner Relationship Management (PRM)?”  Good question!  It’s a loaded term.  To many, PRM is a technology class focused on indirect sales channels, like your international distributors.  A sort of first cousin to CRM, which is focused more on direct sales channels.

Based on our experience in working with leading brands over the past decade, I submit to you that PRM is actually a business strategy for managing an indirect sales channel first, a technology second.  To use the horse and cart analogy, the horse is the strategy.  The cart is the technology that’s specifically designed to support that strategy.

There are five broad areas that drive a PRM strategy for any manufacturer:

1. Have a Plan. Then Continuously Improve It Based on Partner Input.

It’s hard enough managing a direct sales force.  Try managing an indirect channel spread across many independently owned dealerships, franchisees, distributors, VARs, etc. (we’ll just use the word “dealer” to describe the different forms of indirect sales partners).

From the vendor level to the dealer level all the way down to the customer level, it is critical to have the proper plans in place that allow you to manage relationships throughout the channel. At a bare minimum, internal documentation such as a channel business plan and a sales and support plan need to be in place. Most manufacturers have this box checked off at their level. Partner-level business plans are frequently neglected.

We emphasize a partner application process that takes all of these factors into account to help ensure that your plans are aligned with those of your partners from the beginning. As your business model evolves and the needs of your partners change, it’s important to re-visit these plans and make adjustments to your strategy over time.

Take the time to listen to your partners – frequently.  Find out what they need from you to sell your products more effectively.  Your partners have the most direct contact with your end customers so their feedback is critical input to your evolving business plan.

SEE ALSO: Best Practices for Sharing Data with Your Distribution Partners

2. Make Selling for You as Easy as Possible.

Partner Relationship Management (PRM) is all about making it easy for your dealers’ sales teams and their management to do business with you.  It’s that simple. How do you do that?  Well, for starters, don’t require them to log in and out of disparate systems that don’t talk to each other.  Push information to them when and where they need it – and only then.

Ask yourself, if you’re a salesperson and you work for one of your dealers, how easy is it to get ramped up on selling your products in the first place?  How easy is it for you to share sales leads that you generate through your marketing strategy with your dealers’ sales reps?  Conversely, how easy is it for you to “see” leads generated at the dealer level?  How easy is it for dealers’ reps to access the latest marketing material for the products they sell for you?

Do they always have the latest pricing and discounting information on any given day – and are they confident that they do?  If they need to access experts at your level to move a sale along, how easy is it for them to find that expert and collaborate with them?  You get the idea.

With a small direct sales force with an internal sales management layer, it’s easy.  If you sell through an indirect sales channel, you’ll need to rely more on technology designed specifically to “make it easy”. Effective PRM makes it easy for dealers to do business with manufacturers or vendors whose products they represent.

3. The Magic is in the Mix. 

If there’s one thing we’ve seen over and over again is the “app-du-jour” syndrome.  When it comes to improving performance of a dealer channel, we see companies put more weight into certain components that collectively drive dealer performance over others.

For example, some companies are training-biased.  The thinking goes “if we train our dealers better than our competitors, they’ll sell more of our stuff.”  For others, it’s all about incentives – “let’s shower them with incentives, spiffs, trips, and other awards to reward the winners.”

Many focus on marketing – providing Market Development Funds (MDF) to support the dealers marketing efforts locally and leaving it up to the dealers to use this money wisely.  The latest fad is collaboration and “business social networking” – get members of your channel to socialize and collaborate more, and they’ll sell more.

History has shown us that if you’re going to manage an indirect channel, you have to do all of these things well – but in a balanced way.  Training and certification, marketing and communications, incentives and rewards, social collaboration, measurement, lead management – all of these elements combined in a balanced and integrated way are needed to effectively manage an indirect sales channel.

4. Think of PRM Technology as a “Channel Operating System”. 

We like to use the analogy of mobile phone technology as an example of how PRM fits in the indirect channel ecosystem.  First, the mobile phone technology evolution has caused disruptive and enduring positive changes to how people work together, communicate and collaborate together, and generally conduct business together.

The strategy of employing mobile workforces has evolved due to the technology behind it.  PRM is no different – the technology behind PRM has enabled productive and more efficient ways of working with indirect sales partners.  Second, there are thousands of mobile “apps” out there.

However, they only run seamlessly with other apps within a standard technology framework – Android, iOS, Windows Phone, Blackberry and other lesser-known variants being a handful to pick from.  The value of the underlying operating system is that it makes the core device work in the first place, and provides good-enough “out of the box” apps to make the device useful (email, phone, contacts, clock, etc.).

Likewise, PRM technology should serve as the “Channel Operating System” within which critical must-have core features are included, but with the ability to seamlessly integrate third party applications at the option of the user.

It comes back to the “make it easy” principle.  Make it easy for organizations to adopt great point solutions, but within a technological environment that keeps things organized in a user-friendly and scalable way.

5. Cost!

Unlike CRM where you typically have a finite and manageable number of licensed users, in the indirect channel it’s quite common to have a comparatively large number of users who need access and licenses to software that they need to do their job.  One thousand sales people is a huge sales force.

However, it’s not uncommon that indirect sales forces get into the tens of thousands over time, especially if what you’re selling requires you to support thousands of service technicians as well (i.e., automotive/heavy equipment).

The math involved with licensing a large number of users in the indirect channel tends to be a limiting factor with many technologies that are in the market from two practical dimensions.  First, keeping track of licensed users of any application is hard enough in the indirect channel since those users don’t work for you directly.  They come and go frequently across your dealer network.  Second, the cost itself gets prohibitive.

Even the many apps priced at sub-$10 per user per month add up quickly and they typically only address one specific need.  Relying on a plethora of apps that don’t talk to each other is easier said than done in our experience, and very costly.

PRM technology tends to not only be engineered for scale, but priced for it too.

PRM software helps you manage and scale your global distributor network.