To meet the challenges and expectations of end users and customers—as well as dealers themselves—the indirect distribution model has undergone a transformation to adapt to online and digital business processes. Technology systems to help manage the channel are increasingly delivered through a Software-as-a-Service (SaaS) model. What was once known as Dealer Portals, has evolved into Partner Relationship Management (PRM) platforms focused on the expanding needs of manufacturers that sell via dealers and distributors.
This whitepaper provides a practical framework for managing indirect sales channels and how Partner Relationship Management (PRM) technology and best practices can be applied to help build, scale, and optimize the sales channel.
Since 2003, LogicBay has been successfully working with manufacturers that sell through dealers and distributors and found that companies go through four stages of development as they grow and optimize an indirect sales channel. Notably, their needs evolve as they mature from one stage to the next.While each distribution channel is unique, there are a number of common challenges every manufacturer faces when selling through independently owned and operated resellers. To help provide some clarity to this topic, we created a Dealer Network Maturity Model that provides a map of the various stages of dealer network development.
The various stages include:
After you assess the current state of your dealer network, and considered the key challenges encountered when managing a distribution channel, it makes sense to start talking about how to move forward effectively.
A PRM is designed specifically for engaging, managing and developing channel partners. It can be looked at as both a technology solution and a business philosophy.
While there is no universally accepted definition for what constitutes a complete PRM solution, the core functionality should address each of the six challenges that are most often encountered when managing a distribution channel.
A solid planning framework helps companies examine all of the issues that contribute to providing effective support to channel partners.
The Channel Sales Effectiveness Framework demonstrates how planning must drive the enabling strategy. All of our recommendations cascade down from the top of the pyramid. You will notice at the bottom of this pyramid - the Customer Point of Sale - this is where your partner reps’ skills and motivations, and where end user views can be evaluated. It’s amazing how much you can learn when you sell with your partner either on conf calls, but especially in person. The rest of this framework pyramid illustrates all the touch points, stakeholder interests, and technologies that figure into your requirements.
On the left is where you will find the “must have” tools and plans and best practices. You can see where the tools, plans and practices are targeted – Vendor Executive, Vendor Channel Organization, Partner Executive, Partner Sales Organization, and Customer Point of Sale. PRM is the enablement and communications platform that binds everyone in the Vendor and Partner tiers into an effective partnership.
Remember, the process of planning is as important as the final plan itself since a good planning process invites input from all stakeholders.Embrace the abandonment of the ‘status quo’. Implementing different and more scalable systems is never easy. Understand that with change comes opportunities for growth. View improving your channel performance as a journey, not a destination. The sales channel will mature, expand, and evolve over time. Make sure your PRM solution (along with any internal integrated systems) will be able to implement workflows that change over time. Plan for tomorrow’s success, not just for today’s challenge.
Keep in mind the ROI of implementing a PRM. Today, PRM systems used by some of the world’s largest global vendors can be deployed by small companies and emerging franchise systems. Early implementation of a PRM can eliminate the need to invest in point solutions that quickly reach their maximum utility once the channel grows. This provides cost saving opportunities. The other side of the ROI equation relates to the many ways a PRM can help improve the effectiveness of dealer support to drive more revenue.Have a plan to manage the change process. Implementing a PRM-powered channel management program requires effective change management. Oftentimes companies are implementing PRM in the Scaling or Optimizing stages, or if they find themselves in the Re-setting Stage. Regardless of which stage you’re starting from, proactive change management cannot be ignored as a component part of the implementation of a PRM-powered channel program just as in any other time an organization changes the way it does business.
Click the icon below to read more and access the full version of our PRM Best Practices Whitepaper - (it's not too long and an interesting read!)
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