Integration Aids Channel Management

Tell someone today you purchased your computer over the Internet and you probably won't get those baffled looks you got years ago. In fact, several industries took this direct-sales approach to avoid the complexities that exist with managing sell-side channels, like the associated costs, tight margins, and channel conflict. "But that didn't work, because what they found was, the customers valued the channels," says Chris Selland, Aberdeen Group's vice president of sell-side research. And according to a recent Aberdeen report, companies need to improve their sell-side programs. The report "Sell-Side Channel Management: Benchmarks and Best Practices," conducted in conjunction with CRM magazine and based on a survey of more than 150 executives who oversee sell-side channel operations, found that companies are progressively accepting the complexity of their sell-side channels instead of attempting to eliminate it. Although more than 94 percent of respondents reported that they had at least one intermediary between their product and the end consumer, only 55 percent of respondents said they had some ad-hoc integration and 39 percent said they were not integrated with partners at all. "The reality is that a very large percentage of companies don't necessarily sell directly to the end consumer of their product or service, so what companies really need to do is figure in 'What does [my] sell-side channel look like?'" says Selland, who authored the report. What Selland describes as "a little bit surprising and in some respects disappointing," however, was many companies' sluggish outlook: "The past couple of years it's been more, 'As long as we don't stink as much as the competitor we're OK,'" he says. Selland suggests that to optimize sell-side channels companies can do three things: accelerate their efforts to integrate data and processes initially with their best and most trusted partners; use incentives to align channels and drive desired behaviors (recognizing that increasingly empowered buyers will try to cultivate channel conflict); and align sell-side strategies toward the goal of "response optimization," that is, aim to respond as quickly and effectively to as many revenue opportunities as possible. "It's not about picking the right PRM package, it's about working through what the business issues are, then figuring out what you want to do about it, and then reinforcing the technology."