If partner relationships are essential to achieving your company’s goals, then engaging them, satisfying them, and supporting them needs to be top priority. With everything else you and your team are juggling, partner relationships can be difficult to maintain, and that is where Partner Relationship Management (PRM) software comes in. It can benefit you and your partners in a multitude of ways.
What is PRM?
A PRM is the abbreviation for partner relationship management which primarily refers to software used to manage partnerships, organize and orchestrate data, store and share assets, and track sales transactions between a company and its strategic alliances. According to Gartner, a PRM “enables organizations with indirect sales channels (such as agents, brokers, dealers, distributors and value-added resellers [VARs]) to more effectively and efficiently manage activities related to sales, lead management, deal registration and opportunity management.”
While the term PRM is used in reference to software, PRM is also used to refer to a methodology or business strategy. PRM is also sometimes referred to as Channel Operations Management (COM) or Channel Ops. To get a better understanding of what PRM is, let’s first break down each element in Partner Relationship Management.
- Partner: The term partner or channel partner refers to the strategic alliances formed by a company with another party (a company or an individual) to sell their products or services.
- Relationship: The relationship aspect of a PRM is the collaboration of partners to help one another achieve their goals.
- Management: Management refers to the act of maintaining, engaging, satisfying, and measuring partner relations.
Why is PRM important?
Now that we have learned what PRM is, let’s consider why a PRM is important for an indirect sales model. The success of the channel sales model depends on maintaining good partner relationships. Companies may have internal sales teams that sell directly to the end consumer, channel sales remains a very popular and necessary sales model. In the channel sales model, companies rely on their channel partners to take their products and services to market. The success of the channel sales model completely depends upon the relationship between the managing company and its channel partners. Companies that manage partner relationships well will naturally see better results.
Quality Over Quantity
Having a channel-based sales model offers various advantages such as reduced go-to-market expenses and time, the ability to scale sales capacity on-demand, quick market expansion, and great opportunities to leverage the synergies of the channel partners. As a result, companies often try to expand their partner network continuously. However, having a large partner network doesn’t guarantee success. A wide partner network is of no use if the company doesn’t have the tools, processes, and manpower to manage it effectively and efficiently.
Engage And Motivate
Most channel partnerships aren’t exclusive. Just as a company may have multiple partners selling for them across different geographical regions, partners may also sell multiple companies’ products and services. In such a scenario, partner relationship management plays a key role in keeping partners engaged and active. When there are multiple companies vying for partner attention, a strategic and effective PRM will help improve partner loyalty and motivation to sell.
PRM’s Improve ROI
Pareto’s 80/20 principle applies to the channel sales model as well. Companies often find that most of their channel ROI comes from only 20% of their channel partners, while the other 80% are cost-centers or extremely disengaged which often causes fall-out in the first few months after partner onboarding. A key component of partner relationship management is measuring partner (channel) performance and engagement which helps companies identify partners who are engaged with the brand and thus performing well while pinpointing partner relationships that need to be reassessed.
Key Elements Of A PRM
PRM consists of various elements including technology, sales, marketing and operations strategies and multiple processes that work together to maintain and improve channel relationships, including:
Recruitment And Retention
One of the key functions of partner relationship management is recruitment. It is identifying, attracting, and signing partners who are the right fit for the company. Determining partners that meet the criteria for a “right fit” is essential. However, merely recruiting the right partners is not enough; engaging, guiding, and helping partner businesses grow are essential to partner retention. Therefore, partner retention tools, assets, and training are essential parts of an effective PRM.
Partner Training And Onboarding
Partner training and onboarding refer to the training and induction of newly recruited partners to familiarize them with the company’s vision, goal, brand, products and services. However, partner training is not limited to new partners alone. Partner training is a continuous process of effective partner relationship management. Companies need to train and retrain their partners to keep them updated on marketplace changes, buyer behavior, and brand goals. Partners who aren’t performing to their potential may be retrained and provided additional support to attempt to improve output.
Business Planning
While it is true that the channel sales model has a more “ready-to-launch” feel because partners are often in similar or complementary businesses, it is still essential to engage in business planning with partners. Even if partners know how to sell the managing company’s products and services, joint business planning will help all parties develop and understand one another’s goals. Business planning should also include collaboration of solutions to potential challenges they might encounter throughout the sales journey.
Lead Management Strategies
Partners are too busy trying to sell and generate revenue, and often, do not have the time to effectively manage the leads that come their way. Fortunately, partner relationship management includes developing lead management strategies for partners that help them nurture and close leads effectively.
Partnership Incentives
Managing partner programs and their key elements such as incentives, rewards, MDFs, and co-ops. Partner incentives, rewards, MDFs, and co-ops are a big part of partner relationship management, and because there will likely be a variety of partners, programs cannot be one-size-fits-all. It has to be tailored depending on various factors such as partner type, partner tier, partner commitment levels, and even the partner market. Effective PRM entails developing partner programs and also consistently managing, monitoring, and tweaking the partner programs so they are mutually rewarding.
Managing Channel Conflicts
When companies have multiple partners, sometimes, they may end up competing with one another creating an unhealthy channel environment. For example, two different channel partners approaching the same lead can result in a channel conflict that may escalate to the corporate level. Partner marketers often have to negotiate with both parties involved and arrive at an amicable solution.
The goal of a successful PRM strategy is to increase partner adoption and engagement consistently. In today’s highly competitive business environment, effective partner relationship management is not just building a channel partner network that stretches across various markets but building a strong network with partners who are engaged and motivated to grow together.
