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Partner Relationship Management Brings Indirect Channels into CRM | |
 What
is Customer Relationship Management?
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These days eCommerce is top of mind in just about every business. And rightly so because the Internet offers an efficient means of marketing and selling all types of goods. Yet most enterprises continue to rely on indirect sales
channels to reach certain markets, add value, and deliver a complete solution. Can Internet technology be used with equal effectiveness to recruit, manage and support channel partners?
Absolutely! In fact, industry leaders are already doing so, quite successfully. In the first quarter of 2000, Front Line Solutions interviewed 35 channel managers and executives at companies using the Internet to incorporate partners into their eBusiness strategies. This approach, known as Partner Relationship Management (PRM), is a compelling new trend.
The goal of PRM is to create long-term competitive differentiation with indirect sales channels. Can the Internet cut costs? Certainly, but the real benefit is transforming traditional channels into networks of ěePartners,î where Web-based applications enable channels to deliver more value, faster and at less cost. PRM early adopters have implemented a wide variety of Internet-based applications. Some focused on partner management and measurement systems based on a robust ěpartner profileî database. Others invested in smart ěchannel portalsî to give a more personalized experience to channel extranet visitors. And still others implemented automation tools to improve sales processes or streamline order management through eCommerce systems. The initial results are promising. PRM project managers report increased channel sales productivity, enhanced partner ěmind share,î and in some cases, dramatic cost savings too. Over the long haul these businesses expect ePartner initiatives to increase partner loyalty and competitive differentiation while streamlining channel operations. Case in point: Bang & Olufsen, a manufacturer renowned for its high-end audio-visual systems. And not just among audiophiles. The Danish company has also earned a reputation for cutting-edge industrial design. As such, its products appeal to a very knowledgeable, sophisticated customer, calling for an equally sophisticated sales approach among the companyís 2,500 retail partners worldwide. ěThe channel is critical,î said Jens Harder, senior manager for retail systems. ěOur retailers must have the right skills and information to speak to this audience, to make sales and to ensure quality of service.î To give its dealers better access to product information, plus reduce the resources required to process orders, Bang & Olufsen invested heavily in a PC-based configurator but found the system difficult to maintain and support. The effort was refocused on an Internet-based solution. The company is looking for payback in less than two years, based on a 50% reduction in its ordering staff along with increased sales resulting from service improvements. Thatís fine for complex retail sales, but what about reseller channels typically found in the high-tech industry? Consider Tivoli, a software company intent on making it easier for channel partners to do business. An independent division of IBM, Tivoli specializes in data storage systems for routine backup as well as disaster recovery. The company takes a consultative approach to sales, carefully evaluating customer requirements, then proposing an end-to-end solution that delivers the best return on investment. ěCustomer needs are changing and there is more specialization in the market,î said George Mele, director of worldwide storage management sales. ěThe VARs [Value Added Resellers] we work with must do more than provide access to the product. Therefore, itís important for us to select the right partners, keep them trained, and deliver the information they need.î Tivoli selected a PRM ěchannel portalî solution to provide a more intuitive way for users to find information based on their specific needs. ěThe theory is, the easier the system is to use, the more hits there will be. Easier to use means easier to do business with. Business should grow as a result, as the good word-of-mouth attracts other VARs.î PRM is spreading to many other industries too, including telecommunications. From its distant roots as a rural telephone company in turn-of-the-century Kansas, Sprint has grown and evolved into a world leader in telecommunications, capable of providing leading-edge digital voice and data services on a local, national or global basis. The Kansas City, Missouri-based corporation places particular emphasis on integrated business communications solutions. ěWeíre selling the total end-to-end package,î said Kim McMinn, senior director of distributor marketing for the Sprint Business division. ěThat means we must reach all department heads, not just IT.î For a number of years, Sprint has been using channel partners to help open new markets but found it difficult to coordinate the channelís sales efforts. ěBasically, we had no database of partner information. We couldnít profile them, couldnít track their activities and couldnít get timely feedback on the effectiveness of our programs.î Sprint Business implemented a PRM system to consolidate partner information and help manage marketing information and incentive programs. Kim said that the company expects to see gains in revenue brought about by the increased integration of field sales activities with Sprint Businessí lead-generation programs, plus the generally greater ease of doing business. As mentioned earlier, PRM is very much a part of the overall CRM framework which should support employees, customers, and partners. As one of the more recent developments in the CRM market, itís not surprising that many of the initial PRM systems are being provided by startups specializing in this niche. However, CRM market leaders are increasingly offering PRM capabilities as part of multi-channel software suites. |
