In high-tech manufacturing alone, about 60 percent of sales come through indirect sales partners, according to senior analyst Karen Smith of Boston-based Aberdeen Group. Maintaining close, collaborative relationships with these intermediaries--including systems integrators, distributors and value-added resellers (VAR)--is important, and an emerging breed of application software called Partner Relationship Management (PRM) can help.
PRM applications allow manufacturers to increase mind share among their partners while giving them greater visibility into partner operations. The systems use extranets, or password-protected Web sites, to provide partners with the information they need to make a sale. PRM applications also incorporate lead management systems that track each lead from assignment through sale. Once manufacturers know which partners are closing the most sales, they can target marketing assistance to the high-potential partners.
Vendors specializing in PRM include San Francisco-based Allegis, Cambridge, Mass.-based ChannelWave and Austin, Texas-based Partnerware. Traditional CRM vendors such as Pivotal, SalesLogix and Siebel also offer partner management tools.
As PRM systems mature, the functions these vendors offer are starting to converge. At a minimum, you can expect:
• Partner Profiling--a Web-based database containing reseller information such as certification status, product specialties and office locations, which both partner and manufacturer can update.
• Lead Distribution and Tracking--feeds leads directly into the system via Web forms or imports them from CRM
systems and trade shows, then distributes them manually or automatically, based on business rules, and tracks whether or when a sale was made.
• Literature Fulfillment--allows partners to download the latest product information, including prices and specifications.
• Soft Dollar Accounting--automates the process of requesting and authorizing the money a manufacturer sets aside to give back to the channel partner for use in marketing activities.
In addition to the basics, some PRM systems facilitate more advanced collaboration, allowing manufacturers and their partners to co-develop marketing programs and come up with joint business plans. Linking partners and manufacturers even further, some PRM systems allow partners to configure and order products online, check status of previously placed orders and track service requests and warranties.
Collaborating to Boost Revenue
Tamara Pringle, director of market development for PRM vendor Allegis, likes to boil down the arguments for investing in PRM to three key words: reduce, maximize and increase. "With PRM, you can reduce channel costs while improving channel effectiveness, maximizing channel revenues and profits, and increasing customer satisfaction," she says.
Aberdeen's Smith agrees. "Tighter integration between manufacturers and teams of partners reduces costs and increases efficiency," she says. How much? Allegis says that its long-time customer--computer monitor maker ViewSonic--has saved $2 million in marketing costs since investing in a PRM system, with which it tracks and apportions marketing development funds.
Captaris, a Kirkland, Wash.-based provider of unified communications and mobile business solutions, is another Allegis customer looking to boost revenue through closer collaboration with partners. Founded in 1982, Captaris has 450 employees--of whom about 50 are salespeople--and offers such products as CallXpress unified messaging solution, RightFax fax and communications servers, MediaLinq electronic document delivery services and the Infinite Mobile Delivery product line.
About 90 percent of Captaris' sales come through its 3,000 channel partners, of whom 2,000 are consistently active. However, before investing in Allegis technology in mid-2000, Captaris had what it called "channel pains." "Information sharing was difficult," says Christina Parisi, channel programs administrator for Captaris. "We communicated with our partners via fax, e-mail and multiple Web sites." In addition, the company was not satisfied with the way it recruited and registered its VARs or how it exposed them to new product information. Finally, Captaris needed a place to send and track leads to achieve closed-loop lead management. "Our goals were to increase partner satisfaction and population, build a partner database, increase revenue and decrease support costs," Parisi says.
Captaris' PRM journey started in 1999 when the company began evaluating PRM technology. After looking at several PRM vendors, Captaris selected Allegis in September 2000. The first phase of Captaris' PRM implementation started in October 2000, with a limited launch in December. After bringing in top-level partners first, Captaris opened up its PRM site, which it branded as PartnerPath, to the rest of the channel in January 2001.
PartnerPath has brought Captaris several key benefits. To start with, partners now have a single point of contact with the supplier. Before the new technology, Captaris had five Web sites and three extranets. "Partners couldn't remember the passwords for all these sites," Parisi says. The new site has replaced all but one of these extranets. And, Parisi says, "it will be a happy day when I turn that site off as well."
The PRM system is also helping Captaris manage its VARs. In the past, when a new VAR registered with Captaris, it was often for one time only. Once that end customer had been served, Captaris might lose the VAR. "Now, when partners register, their information goes into PartnerPath," Parisi says. "An e-mail goes automatically to a key internal salesperson who gives the VAR a call. There are times when the new VAR gets a phone call within five minutes of signing up. This system is great because we can keep partners interested."
With the new system, VAR profiles are available for all internal salespeople to see. "Information used to be locked up in our CRM system or someone's e-mail box," Parisi says. "We couldn't update or export it." Now partners can update their own profiles, and Captaris employees can see correct information. "We can see things like what makes a VAR successful. We know which ones need training or business help. We can not only decide which ones to retain, but we can also target VARs for new products based on attributes of the lead and the partner."
PartnerPath also offers partners resources. New information is made available depending on the profile of the VAR. Partners can get such basic tools as price lists directly, without contacting a call center agent. "Our day-to-day tasks have been reduced," Parisi says. "This frees up our internal salespeople to collaboratively sell with partners."
Collaboration is enhanced by having one place to process leads. "At any one time we have 5,000 open leads," Parisi says. "You can see how much work it was to manage these manually. Now we no longer drop leads, and we have true collaboration. Partners can update leads so internal staff see what happened to them, and [vice versa]. The system has started to pay for itself. Partners understand that it is a great tool for them, and they love it."