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What's in it for Me?
Methods that will help encourage channel partners to buy in to the benefits of CRM.
For the rest of the August 2004 issue of CRM magazine please click here
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When it comes to channel management, many are quick to equate success with the quality and quantity of leads that pass through a given point within a given time frame. But true partnerships are not built on leads alone. What follows are five strategies that will help encourage channel partners to buy in to the benefits of CRM, make using it a part of their day-to-day business processes, and as a result, strengthen the ties between company and partner. And that's truly a win-win situation. 1. Make partners active participants As with internal users, involving partners from the outset will show that their requirements, concerns, and input into the CRM and channel management initiatives are important. "One of the key things that our customers have done that makes them very successful is that they bring their partners into the discovery phase of their CRM system," says Chris Heidelberger, president of ChannelWave. Heidelberger suggests involving not only key partners, but also several accounts with the most potential--doing so, he says, may encourage them to increase their business with you. Integrating channel partners throughout the sales cycle is also crucial to their CRM adoption. "The partner has always been treated as the sort of stepchild of the family," says Axel Schultze, president and CEO of BlueRoads. Their integration into the sales and marketing processes, he says, allows partners to assess their role in terms of the big picture, and to assess how they can use their position to provide useful advice: "It shows them that they can be treated seriously....Once there is an engagement process, there is an almost direct sales environment." At Sophos, a provider of corporate antispam and antivirus solutions, a wide breach in communication existed between partner sales reps and Sophos sales reps. Tracking and measuring leads was difficult, and "there was a disjointed set of terminology we were using with our partners," says DeMarie Malnar, director of channel marketing for Sophos. "What we considered a lead and what they considered a lead may have been different." Malnar often found herself relying solely on her sales reps to determine what had closed and where things were headed.
With the help of BlueRoads, Sophos streamlined information to give internal and external sales reps universal visibility. "It was interesting to see the reaction of our channel, which was, 'Thank you for listening to us,' " Malnar says. "Not only were leads coming their way, but the lead registration piece was critical for them, giving them that sense of protection." The ability to share pipelines and educate partners has contributed to speedier sales cycles for Sophos and a firmer grasp of precisely when and where its partners require help. A true differentiator in channel management is to increase the degree of participation partners can have in updating and managing their accounts in a shared system. Partners are more likely to use a tool that allows them to dig into their own accounts or their customer accounts, retrieve and create documents to put into the system, and fully participate in the system--for instance, by sending a message via workflow rather than email. In essence, partners "are much closer to the core of the onion," says Mike House, general manager for Exact Software's e-Synergy solution. Avnet, a large distributor of products in the electronics industry, uses value-added resellers (VARs) as its distribution channel. Avnet's Web site, along with its access to tools, is a critical piece of its strategy for supporting its partners. "We share leads, orders, invoices--all the way through the cycle," says Dave Stuttard, vice president of applications at Avnet. "One of the biggest challenges you run into is how you do delegated administration." Using SalesLogix, Avnet's VARs now have complete visibility into the people using the system. "More important," Stuttard says, "[the VAR] can also control the access...to manage the security of our Web-site tools." Subsequently, Avnet's partners are no longer receiving duplicate information, and can leverage their own knowledge and expertise accordingly. Tighter integration between the company and its partners has equated to an improvement in data quality and productivity resulting in more than $2 million in revenue opportunity, and a 20 percent time savings across the board. 2. Segment properly Not every partner need have the same level of information and access. Assess the value of each relationship, and allocate your resources in view of that. According to Angela Bandlow, director of solutions strategy for mySAP CRM, it is crucial that companies grasp the concept of partner life-cycle management, taking into consideration what kind of company a partner is and what level of partnership it can ultimately provide. Bandlow recommends segmentation based on criteria like training and the type of products a partner is authorized to sell. Solutions like ChannelWave allow companies to tier partners via silver, gold, and platinum access levels. Although platinum partners may drive much of the partner-generated revenue, for the remaining 80 or so percent these systems can play a substantial role when users leverage the knowledge available in the system, according to ChannelWave's Heidelberger. 3. Recognize the stage of the product New products may bring new partners who may need different levels of access and information than do current partners. "The first thing you need to take into consideration is, where is your product in its life cycle?" Heidelberger says. "It's really important for people to understand whether they're building a new market, harvesting a market that's already reached maturity, recruiting a new channel, or starting from scratch." Reviewing key value drivers for each product via its respective channels becomes necessary to understand the link between a product and the partner programs it needs to support it. Take Pacific Coast Feather (PCF), a 100-year-old, family-owned business that manufactures and markets basic bedding products, as a prime example. "We've grown tremendously in the past 20 years," CIO Gwen Babcock says. "So we are continually looking for growth opportunities." To maintain its steady annual revenue increases of 10 to 20 percent, PCF spotted a ripe opportunity in the small- to medium-business (SMB) market, and realized it had to expand customer service via the Internet. Most of PCF's business is conducted through traditional retail channels like department stores, specialty stores, and catalogs--and most order transactions are handled via EDI. But Babcock found that these new SMB partners required a different approach. They were not EDI-compatible, and needed a lot of phone calls and personal, day-to-day contact. To improve communication with and service for these partners, PCF set up a B2B Web site using mySAP CRM, providing automated order placement, customer-specific pricing, and shipment tracking through that site. "We've been able to grow and expand into those channels without having to increase our overhead costs to service them," Babcock says. In addition, customer service staff who would otherwise be tied up doing manual data entry now can focus their time on marketing and analytics activities. Small-business owners have flooded the company with positive feedback on the depth of access to information, and on the ease with which they are able to place orders on their own time. PCF now looks to quadruple revenues from its SMB channel, and has already seen growth in the Web site's customer base. PCF also plans to develop an Internet channel to better service the hospitality industry, another potential gold mine for the company at this stage. 4. Provide worthwhile incentives What makes an incentive work is that partners see its value. The "right" incentive for one partner may be leads; for another it may be access to certain information; for another it may be both. Providing what each segment of partners need how and when they need it is a powerful incentive. What is essential to successful CRM adoption among partners is "making at least some part of your site mission-critical to your partners," says SAP's Bandlow. Some experts say that if receiving and tracking leads and other information is tied to compensation, partners will be more likely to get involved with the CRM initiative. But while some companies use leads as a carrot, others use them as a stick. "If they don't play, they won't get the leads," Exact Software's House says, noting that some companies set up their systems so that if partners don't provide the required information, the lead will be passed on to another company. Financial incentives can work exceptionally well as a bonus to information and leads. Partners need to be "getting discounts and incentives, as opposed to just an information portal," Bandlow says. 5. Don't force it Companies must enable partners to maintain a sense of self. "Never, ever try to convince partners to use the system," BlueRoads's Schultze says. Let partners decide for themselves what information is most relevant and interesting in terms of leads, opportunities, and product information. "At least 80 percent [of partners] are busy enough to say, 'This is my area of interest, this is not--now leave me alone,'" Schultze says. Toshiba Canada Office Products Group (TCOPG) sells various Toshiba products, and distributes these products through an independent dealer network, a direct distribution branch system, and a large office-equipment distributor. "Communication required by the channel to be able to sell and service the equipment was huge," says Mark McCullogh, marketing director for TCOPG. "It also required huge amounts of time to distribute and redistribute that information." The inefficient process became increasingly complicated as products became more IT-centric. With the support of ChannelWave, the company was able to provide its dealers with 24/7 access to product information through a system called OPG Online--a direct link into Toshiba Canada OPG's order entry system. "If it's not on OPG Online, you can consider it nonexistent," McCullogh says. Dealers, he says, have a newfound confidence that they can extract precisely what information they need, when they need it. Partners feel empowered to work on their own terms, and TCOPG has reaped the benefits: The company has reduced channel management costs by 30 percent, cut communications costs by 50 percent, maintained 95 to 100 percent usage by the company's dealer base, and achieved faster, more accurate order processing and delivery cycles. Contact Editorial Intern Emmy Favilla at efavilla@destinationCRM.com
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