The Negative Effects Of Poorly Implemented Partner Relationship Management Strategies Without The Necessary Parameters And Processes In Place
Promotional allowances have been around for a long time. Since the early 20th century, vendors have been experimenting with different partner relationship management strategies (PRM Strategies) in an effort to motivate and persuade their channel partners to sell more efficiently.
And it works.
In 2012 alone, businesses globally spent a reported $69 billion on channel marketing initiatives, and 80 percent of that money was spent on channel incentive programs (e.g., deal registration, special pricing, co-op/MDF, etc.).
Vendors realize the potential of harnessing attainable goals as a vehicle to acquire desired outcomes.
However, since competition to maintain channel partners continues to grow each day, incentive programs inevitably evolved, becoming taxingly complex and meticulous to manage.
Nearly every transaction that occurs within the indirect sales funnel contains some sort of backend rebate.
To help minimize the intricacy of managing so many moving parts, as well as to add accuracy and efficiency into “what is exactly owed to partners,” vendors began implementing ERP and ad hoc software systems into their Partner Portal as part of their partner relationship management strategies.
Although the competencies of these systems have the capacity to accurately create reports and identify erroneously submitted claims, the manual processes and controls in place do not.
Consequently, vendors that had originally thought they were saving money by integrating these technologies, were instead, producing the exact opposite.
Following are examples of the negative effects of defective partner relationship management strategies and poorly implemented programs without the necessary parameters and processes in place:
- Slow turnaround – Vendors are inefficient at responding to partner’s submitted claims regarding rebates and programs; disputed claims become time-consuming, which results in frustrated partners; lengthy reimbursement process
- Channel conflict – Vendors have difficulty monitoring price cutting and competition for partners with registered deals.
- Poor channel insight – Vendor has poor visibility into best-performing programs and partners
- Inadequate flexibility – Vendor doesn’t have the resources to provide flexibility on extensions regarding closing dates on deal registration
- Low participation – Partner opts out of program participation because of obscure parameters and/or infeasible required qualifications
- Overpayments – Vendor lose unnecessary sums of money due to the inability to accurately identify mismanaged and/or erroneously submitted claims
- Accidental deletion – Vendor (un)willingly removes expenses which have been applied against them
The CMR Channel Data Management Platform
Accounting accuracy is at the heart of CMR’s partner relationship management software. Each partner is designated a customized account that methodically bookkeeps funds: available, requested and allocated. Each POS transaction contains unique characteristics that match and enforce program parameters based on the vendor’s manual design.
The end result of this all-inclusive auditing mechanism contributes to successful partner relationship management strategies that help increase partner satisfaction and adoption of program participation, the eradication of overpaid/mismanaged claims, improve visibility into end customer’s behavior, better insight into best-performing partners and programs, etc.