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Partner Relationship Management (PRM) is a business strategy for developing effective
partner relationships between companies and third party organizations (partners)
that sell their product(s) or service.
With channel partnerships becoming the preferred type of indirect selling in a variety
of industries, PRM is changing how business is done. Now companies can educate, motivate, guide, and measure the effectiveness
of individual partners on a regular basis to maximize the productivity of their
sales channels.
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What should PRM do for you?
A well planned and executed PRM strategy will increase partner loyalty for the company
and deliver real value to the partner.
A recent study suggested that almost half (46%) of vendors have sponsored programs
or other activities designed to increase partner loyalty but few have the ability
to measure the results of their programs and how they impact that partner loyalty.
There are four key requirements to consider when developing a PRM system:
- What do your partners and their salespeople need from you to make
them successful?
- Use that information to develop a strong business strategy for working
with partners.
- Combine that business strategy with the latest information technology
to deliver a PRM system that automates communications and processes.
- Ensure that your system will deliver real value to your partners.
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What elements make up a solid PRM system that delivers real value? |
Education
and Communication
Companies need to commit to rolling out their PRM system with a solid program for
partners which includes clear messages and effective training.
The ability to make a channel partner productive is directly proportional
to the effort you put into training the partner. Remember that partners do not have
many of the advantages of your direct sales force. They generally do not have the level and quantity of contacts within your
organization to get useful information from marketers, engineers, and other salespeople. Extra effort must be made to prepare
them to effectively sell your product.
A PRM system can deliver product training and other education when it's convenient
for the partner and their individual salespeople.
They simply access the system at a time that is best for them to learn the
material.
No need to schedule on-site,
or after hours training sessions at partner offices.
The net result of using PRM for this function is lower cost education with
higher retention rates.
Your PRM system should also have document storage capabilities for critical information
that should be at the fingertips of the salesperson. Partner salespeople need top quality selling tools such as competitive analysis
reports, sales scripts, and white papers, along with the usual brochures and product
sheets.
Frequent and on-going communication is important to the health of your partner relationships.
With today's business moving as fast
as it does, companies need to constantly inform their partners with new product
information, company news, industry updates, etc.
A good PRM system will help you elevate your message above the 'industry
noise level' to keep the focus on you. |
Sales
Tracking and Incentives
Partner salespeople are not like an internal sales force, they won't necessarily
sell your product just because their employer is your partner. It can be easy for them to switch to your competitor at a moment's notice,
but they will maintain their focus on selling your products through the use of strategic
incentives that provide them with both compensation and recognition.
Your PRM system should allow partner sales people to register their sales electronically
for faster validation and reward issuance.
Rewards themselves can be measured in 'points' or dollars as long as the vehicle
for delivery encourages them to spend their rewards within the system. Points Accounts and Reward Cards are excellent examples of incentive rewards
that build loyalty and are financially measurable.
By allowing the salespeople to use their points or rewards in your PRM system there
is a reason for salespeople to constantly access the system. Again, these principles keep the focus on your company - not your competitor. |
Reporting
and Measurement Tools
The effectiveness of your channel relationships should be measured on an on-going
basis and your PRM system should be the backbone measurement tool for that purpose.
PRM Systems should provide the company with a variety of useful reports to gauge
the effectiveness of their sales channels and individual partners.
These reports should go well beyond the 'sell through' reports that companies
generally receive from their partners.
In fact, they should details sales down to the salesperson level.
A good PRM system should collect sales data to validate the sale prior to the reward
payment. Beyond the issue of validation, that information should compile a powerful
database of customers and product information to provide a basis for the measurement
of each partner's sales productivity.
Your PRM system should allow you to self-manage and customize reports for your products,
partners, and financial needs. |
Is a
PRM System for you?
Any company that sells their products through dealers, agents, distributors, or
retailers could derive benefit from a PRM system. Whether you have a large number
of partners, or have partners across a wide geographic area, the implementation
of a PRM system will allow you to effectively manage your channels.
When considering the scope of your PRM system, decide what parts of the package
give the highest value-add to your company, and which give explicit value to the
partner that encourages them to use the system. This powerful combination will increase partner loyalty, channel effectiveness,
and, ultimately, your sales revenues. |
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