What Channel Are You Watching
There have been a number of studies recently passing through my inbox that laud the benefits of using channel partners to increase reach with best margins. I would say the evidence is pretty sound that utilizing channels is an effective way to maximize growth while keeping cost of sale in check. However, simply deciding to push more revenue through your partners does not a good strategy make.
How do you plan to manage channel conflict? How do you plan to keep your partners loyal? How will you know if you are using your channels for the right market or product? For many of my clients leveraging channels has been a key step toward more effective attainment of business goals, but the most successful of them has built a defensible plan are using their CRM technology to maximize results.
Planning is a good idea generally speaking, but the involvement of channel partners in representing your business to prospective customers probably requires some extra forethought. Recently a client of mine decided to exploit a channel that had, up until very recently, been reviled as the arch enemy. The 180 shift in policy was taken in order to take advantage of a window of opportunity to develop a new market. My client pounced on the chance, but did not think through all the variables, including two key issues in particular. One was not thinking through a means for efficient order capture. As a result the call center became swamped causing order errors, billing delays, and generally driving up the cost of order. The market got penetrated but at a lower than planned margin.
As second issue was the about face with the long-term competitor. Sales people were expected to collaborate with the enemy in a change that literally happened over night. The problem was in not communicating the change properly. As a result, the expected collaboration took much longer to develop than expected further delaying the originally proposed margin benefit of the new program.
Part of the planning process should include how to capitalize on CRM to achieve the best outcomes. Involving your channel partners in your CRM program will help to reduce the risk of channel conflict, help assist the promotion of partner loyalty, and provide the best chance of performing the analysis required to determine if your channel approach is achieving the best results.
It all sounds good in theory, right? It does have one significant challenge. For the most part your partners have to be willing to utilize your CRM system. If you think user adoption was hard with your SFA deployment, wait until you roll out your new PRM system. Ultimately you have much more leverage over your own employees than you do with your partners. But if you build it, it is possible they will come, with the right incentives. For example, send them leads on your partner portal, but require that they register their deals in order to get their leads. Let them pull down sales reports from that same portal, but remind them that those reports require entering sufficient opportunity information. I have clients who are doing both successfully.
Partners will work for you, but it does require executing on a good plan.