IDC Hits The Right Note With ‘When CRM Isn’t Enough’

I read an interesting blog post today by Gerry Murray, research manager at IDC, on the need for PRM. He made three very powerful points that should resonate with any company selling through an indirect sales channel in this challenging economic climate:

• Manage your partners throughout the partner lifecycle
• Activate and optimize your entire partner eco-system
• Use the most appropriate tools, systems and processes to get the job done

We all know that the key to growth is new customer acquisition and increasing customer propensity to recommend and re-purchase. These rules apply similarly to driving growth through an indirect sales channel. However, all too often, manufacturers build their channel development strategies around the first step alone – new partner recruitment. The assumption being that more partners equals more revenue. It doesn’t. Active partners are what counts but more importantly, yield per partner is actually critical. Gerry’s research supports this.

Reviewing the facts included in his post, the math is simple. A 10% increase in active partners to just 41% combined with a 10% average yield increase across the board equates to a compound 46% revenue growth. The secret to achieving that growth comes from executing on the second part of the strategy – increasing the partners’ propensity to recommend and sell your products and this is the hard part. You have to execute consistently and well throughout the partner lifecycle (find more details on the lifecycle here)

I agree with Gerry that this cannot be achieved by using a CRM system alone and it’s for this reason that almost all of our customers have invested in a PRM system to work alongside of and closely integrated with an existing CRM system to create a holistic sales and marketing platform.

Given the poor state of the economy and the cost of running a direct sales model or implementing an indirect strategy poorly makes partner performance optimization a number one priority for businesses. PRM when combined with an effective, well thought out strategy is the answer.

¶ Posted July 28th, 2010 † Mike § PRM ‡ No Comments |