Benefits of a PRM Versus CRM Solution
While vendors know the importance of maintaining relationships with their customers, they seem to fall short in understanding the value that their channel partners provide. Relying more and more on the indirect sales channels for revenue, managing these partners effectively can be very frustrating. Most companies implement a customer relationship management (CRM) solution thinking that it will suffice. However, companies remain mostly ignorant of the capabilities of a partner relationship management (PRM) solution; its business benefits, and the significant differences in comparison to CRM.
Though insight as to what a CRM solution is has grown, many business leaders still think that a CRM system is just a place for customer data to support sales and marketing. We are seeing more leaders taking a holistic view of CRMs as an integrated business solution. They are describing it as a business strategy focused on the needs of the customer. While better understanding is developing, there is still only a handful of companies getting the most out of their CRM solutions, and truly seeing a return on their investment.
When a business decides that it wants to engage a PRM solution, their IT department may look towards implementing a CRM system, inadvertently believing that the processes involved in maximizing partner value are the same as those involved in customer value. Even though both systems are designed to enable life cycle management, they are fundamentally different. A CRM manages the interaction between vendor and customer, while a PRM manages interactions across an entire, complex ecosystem. It requires the alignment of business processes across the entire chain—from the vendor, through multiple partners, to the customer.
All CRM and PRM solutions should have the ability to handle sales automation, account management, contact management, lead funnels, forecast management, as well as reporting. Additionally, they should offer marketing automation and communication, campaign management, list management, data management, along with solid analytical reporting, and dashboard tools. These are all essential functions that are as necessary for a partner management system as they are for a customer management system. Beyond this, PRM begins its divergence from CRM.
With a direct business model vendor, the sales manager works with their sales representatives to manage accounts on a one-to-one basis from proposal, to negotiation, to closing of the deal. With an indirect business model vendor, the channel manager works with multiple channel partners and their respective sales reps, who in turn work with various vendors to provide a collection of products as a solution to the customer. Below are some differences between the two solutions:
Contract renewal management between vendor, partner, and customer is different, and more complex than direct, one-to-one contract relationships.
Lead and opportunity management in a direct sales process does not take advantage of the leveraged-network effect of the channel.
Incentive and compensation programs work very differently with channel partners as compared to direct sales.
Sales training, technical training, and ongoing education require different approaches for indirect and direct sales teams.
Business Benefits of a PRM Solution
Stream Partner Onboarding - If you have large channels, or if you are in a company that is trying to expand your channels, chances are you bring new partners on board constantly. Using a manual process wastes lot of internal resources, while a properly configured PRM solution is more efficient.
Education Management - By fully integrating learning into the overall channel management process, a PRM provides the ability to create, launch, and manage a well-defined learning plan that’s tied to specific roles in the channel. This significantly increases the efficiency with which you manage your partner base, as well as the learning and certification processes associated with it.
Marketing & Communication Support - A PRM solution provides a company with an environment and tools to manage its channel marketing documents, communications, and other marketing assets within one dashboard. This ensures that every user in the system gets the right information at the right time, allowing them to do their job more effectively.
Increases Partner Satisfaction - If you’re not taking care of your partners, your competitors most certainly will. Partners do not have unlimited resources, so when you offer them a more efficient and beneficial way to do business with you, they will naturally look to you to provide them with solutions for their customer base. This will increase your partner satisfaction rate and your growth potential with that partner base.
Incentive Management - Partner incentives are an essential element in driving the performance of partners. If you are selling through channels, you probably offer some kind of incentive plan. How do you keep everyone motivated and happy? A PRM solution will enable you to gauge how your channel partners interact with your business. Tracking this progress will significantly enhance the return on investment for your market development funds, allowing you to reallocate funds based on what’s working or not.
Product Introduction - New product introductions are the mainstay for company growth. Having a well-designed PRM solution recognizes that by giving channel partners the ability to provide real-time feedback on products. This ensures that launches can go off without a hitch.
Sales Productivity Tools - PRM solutions give the means to communicate, educate, motivate, and measure its channel performance. Furthermore, a full-service solution can capture the company’s sales process, train and prepare its channel partner's salespeople for success, monitor compliance, and measure results.
CRM and PRM Co-Existence
Any company that has invested in a CRM solution is unlikely to want to go back to the drawing board in order to deploy a PRM system. Can a business integrate their existing CRM system with a new PRM system? The answer is, yes.
Integrating CRM and PRM allows organizations to bring all participants in the channels together into one virtual database, while preserving the integrity and uniqueness of customer and partner systems and tools.
Some vendors will use a CRM solution as a sales automation system for direct sales reports, an enterprise marketing automation tool for business environment analysis, and an execution tool for campaign and lead management. Meanwhile, the PRM solution manages all channel sales automation, channel marketing, program automation, and provides an intelligent, interactive platform for the partner portal. PRM also provides valuable channel analysis, reporting, and decision-making support. Consequently, it's widely used for product marketing, and those involved in supply-chain management. CRM and PRM co-existence and integration has become commonplace, and in many respects, an optimal solution to many significant business challenges.
Every partner has their way of doing business; processes between partner and vendor are rarely aligned. This makes reporting and measuring channel results virtually impossible. The entire process chain, from the vendor, to partner, to customer, needs to be aligned. Since CRM solutions were not designed to handle this level of complexity, a PRM solution can manage indirect business relationships, closing the gap between all participants.
Though there are notable difference between CRM and PRM, both CRM and PRM have their place, and both business models—direct and indirect—require their respective systems to obtain peak performance.
If you are new to the partner relationship management world and you're trying to figure out how to successfully deploy channel marketing automation, contact our analysts here at CMSC Media. They will be happy to direct you to a solution that is right for you.