The importance of selling through alternate distribution channels has been a hot topic in discussions about sales strategy with hundreds of Chief Sales Officers (CSOs) during the past year. Many companies realize that without effective channel sales, they cannot adequately service their market. As one CSO put it, "Today it is not a question of what channel, it's every channel!"
Yet while companies talk about how important selling through a distributor network is, often this critical part of the sales strategy is left out of customer relationship management (CRM) plans.
The question "Why not include channel partners in CRM projects?" normally elicits two answers: It is too expensive and it is too hard. Yet early adopters of Web-based solutions for channels have been reporting significant successes over the past year. To find out why these projects were initiated and uncover the key factors in their success, Bob Thompson, president of Front Line Solutions, recently conducted a benchmark study. His firm, along with WvH Marketing & Advertising and OnTarget, researched how 33 companies were successfully leveraging technology to support their channel partners.
Thompson recently shared the results of the study with me, and in this month's column I want to pass on some of his insights to you.
It's All In Your Mindset
When Thompson and I met, the first thing he wanted me to understand was the mindset you must have for projects that involve channel partners. "When it comes to selling through channels, [companies'] sales in are a result of their partner's sales out," Bob explained to me. "So, they realize they have to look at this initiative from the channel's point of view. We have been using the term Partner Relationship Management (PRM) to separate these initiatives from traditional CRM, to help open companies' thinking to consider things from the channel's perspective as well as their own."
Front Line Solutions' survey initially asked participants what their PRM initiatives' goals were. While increasing sales revenues is a key goal for these projects, they don't stop there. Additional objectives such as streamlining processes, improving communications and improving service were also important issues participants focused on.
When Thompson then asked the project teams to overview the critical factors that helped make these PRM projects successful, six elements surfaced that were common across the best implementations.
Executive Sponsorship: Several respondents pointed to senior management support as a major reason for their success. With executive sponsorship came high expectations, which caused all team members to put out extra effort. In addition, having an executive champion made it much easier for the teams to get the adequate level of resources--time, people and money--to do the project right the first time.
Cross-Functional Team: Developing a comprehensive PRM program typically involves the cooperation of multiple areas within a company: marketing, sales, support, finance, manufacturing and distribution. The best projects tend to realize this up front and put together a cross-functional team from the start. This way they identify any "turf war" issues and solicit buy-in from all the areas of the company early on.
stakeholder Buy-in: Ultimately, the fate of your PRM initiative is in the hands of your channel partners. Because of this, successful projects focus on getting buy-in from the ultimate end users. These projects solicit advice and feedback from channel representatives, and ensure that the project plan clearly defines incentives for the partner.
Business Needs Drive IT: The teams surveyed recommended that companies let clear business needs drive IT choices, versus starting with a piece of technology and then going in search of a problem. Several firms recommended that companies take the time to really understand how the sales process works (or doesn't work) today from all perspectives involved before choosing IT. Once you discover holes in the sales process, you will be in a much better position to make smart IT choices.
Right Vendor Selection: Just because a vendor has a great CRM solution does not mean that vendor can meet your PRM needs as well. Channel partners tend to resist investing a lot of effort in learning how to use PRM systems. Simplicity and ease of use are much more critical in PRM than in CRM applications. Also, channel partners tend to want to cooperate, but only up to a point. Therefore, PRM systems need to provide them with the ability to share only the information they want you to have about their accounts.
Pilot and Phased Implementation: Doing a phased implementation is essential. While your ultimate PRM system may be very robust, if you try to roll out too many functions at one time, your channel partners may not be able to assimilate all the capabilities you have provided. Also, for each phase of the project, survey respondents recommended that you pilot the system to ensure that the functionality and user interface pass the "real world experience" test, and to make sure that the system will scale.
Bob Thompson is convinced that 2000 will be the breakthrough year for these initiatives. Templates for success are emerging. PRM-focused systems are available commercially. Partners themselves are ready to embrace tools that help them work with their customers more effectively. While in the late 90s PRM projects were a competitive edge, they are now becoming a matter of competitive survival.
For more information on the Front Line Solutions study, contact Bob Thompson at www.frontlinehq.com