Solutions providers have made a lot of money selling customer relationship management (CRM) software to manufacturers...
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and other companies that want to keep a tight hold on dealings with customers. But partner relationship management (PRM) – which does the same thing for a vendor trying to keep track of dealers and distributors – hasn't been nearly as successful in the high-tech channel.
And companies that do buy it seem to use it to look out for their own interests, rather than to benefit their channel partners.
Unlike CRM – which is designed to help companies increase sales to specific customers – partner relationship management applications are designed to help the partner increase sales.
Partner relationship management started in the late 1990s, but for some reason never really caught on, said Forrester principle analyst R Wang. As vendors continue to compete against one another, he said, more may set up partner relationship management systems to differentiate themselves from competitors in resellers' eyes.
The most important feature for companies that buy partner relationship management is lead management, according to companies that use PRM, among other things, to see which leads are going through the pipeline quickly and which are stuck.
Partner relationship management can also be used as a deal registration system and to create a partner portal where resellers can find resources like sales manuals, training and – potentially – other partners that may complement their services.
Rather than making it a standard element in a partner program, some vendors roll out partner relationship management to their top resellers. GFI Software, a London-based company that develops network administration software, has about 2,000 partners worldwide, but only its top 150 or so subscribe to its PRM system, said the company's vice president and general manager of Americas operations, Kurt Shaver. GFI uses partner relationship management from Salesforce.com.
"The number one reason that we rolled out a partner relationship management system to our partners," Shaver said, "was to have a more efficient lead distribution." That was the cost-justifying feature, he said.
Once that was in place, the company added deal registration. It has also linked its online training with its information on resellers, so that when a partner completes a training course, the system automatically registers it as being qualified for more leads.
Although some companies, like GFI, use partner relationship management software to make their existing lead distribution more efficient, telecommunication vendor Avaya Inc. bought BlueRoads' SaaS PRM software two years ago in part to shake up the very way they went about leads, said the company's senior manager of integrated marketing Denny Head.
Before using BlueRoads, Avaya used a push method for its partners – that is, it identified which partner a specific lead should go to, and pushed that lead to the partner. But BlueRoads offered another approach, which it terms "pull" but Head called a "shark tank" approach. Once a lead is identified, it goes out to all qualified partners on a first-come, first-serve basis. Head said the new system helps ensure that the most motivated sales team gets the best leads.
The ability to push leads out to resellers and oversee how they are handled was also the top selling point for Ottawa-based business intelligence vendor Cognos Inc., which recently purchased Salesforce.com's partner relationship management to complement the Salesforce.com CRM system it had already deployed to its direct sales team.
Like GFI, Cognos has only bought partner relationship management subscriptions for its top-value resellers, rather than all of its 3,000-some partners. Signing every partner onto the PRM system would cost too much, and offering it just to the company's highest-value partners gives those partners an extra incentive to work with Cognos, said Peter Malandra, the company's director of partner strategy and support.
Allowing its channel managers to get a view of their resellers' pipeline helps Cognos quicken the sales cycle for those leads, Malandra said.
It can also help channel managers at the vendor company identify which partners are doing well and which are lagging, Head said. Although he admitted that the extra scrutiny gives Avaya more control over its partners – down to being able to tell how each individual sales representative is doing – the tradeoff is that Avaya is able to give its partners better, more qualified leads, he said.
Although the partner relationship management system Cognos uses includes deal registration that can help cut down on channel conflict – either between resellers and the direct sales team, or between different resellers – Malandra said the primary advantage for resellers is the same as it is for Cognos: quicker sales and better co-marketing.
Malandra said not all of the partner relationship management system's features were huge selling points. For instance, Salesforce.com PRM includes a partner portal, where the vendor can post sales tools and support documents. But Cognos had already had a portal in place that was working well enough, he said.
"Were the partners knocking down my door asking for this? No," he said. But Cognos knew that getting visibility within their channel isn't always easy, and Malandra said the company hopes the partner relationship management system will help with that.