by Martin McNally

Director of Product Marketing, CCI

 

Are you taking your channel program global? Or, are you merging multiple existing programs across countries? Either way, congratulations are in order. Godspeed too.

 

How is your company coverting its program blueprint from a goal to a successful, sustainable reality? How are you reconciling the desire for standardization / normalization of process with local business needs, be they company-driven or regulatory requirements? Regardless of design and objectives, are you ready for extreme change management?

 

CCI has some thoughts on the matter. Check out the white paper- Financial Considerations for Global Channel Programs and comment below with your own stories. We’d love to keep the conversation going to address and evolve all aspects - including the risks and rewards of each.

 

by Martin McNally

Director of Product Management, CCI

 

Looking for a fresh perspective, I typed “PRM defined” into my search engine the other day. Its reply was “Did you mean: crm defined?” So much for a fresh perspective.

 

The assumption that CRM and PRM are one in the same may or not be accurate, depending upon your definition of PRM and your business needs for such a solution. The larger stretch and true misconception is believing that a PRM solution enables management of your partners. It does not. PRM significantly under serves those who run or participate in indirect sales programs.

 

The simple fact is that PRM does not encompass 100% of what’s needed to run your channel program. Regardless of definition, key functionality is missing from PRM software and reliance on these solutions results in an incomplete and ineffective channel program. As evidenced by the bundling of CRM and PRM by software companies and industry analysts alike, PRM is really focused on tracking and managing relationships, and solely from the vendor’s perspective. It does not address the sales and marketing activities endorsed by vendors and performed by channel partners. PRM does not afford the parties any means to bi-directionally communicate, plan, collaborate or execute. Nor does it provide financial controls necessary to administer complex reward or Co-op/MDF programs. But that’s not their fault; even the industry as a whole has a hard time defining what PRM is supposed to do.

 

The CRM/PRM big boys have a lot to offer, to be sure, but not for the channel. They are not specialists and do not offer functionality necessary to meet the business requirements of channel management. Beyond managing channel conflict and sharing sales tools, as enabled by PRM providers, vendors need to give their channel partners targeted vehicles for promoting and selling the vendor’s wares. Tracking opportunities and managing related incentives are key components of a successful and active channel program.

 

If you expect your PRM tool to do it all, you will be sorely disappointed. Without a more targeted solution to manage the breadth of your channel program, a vendor does not build partner mindshare and loyalty, both of which are required for the vendor itself to attain increased market share.

 

Until CRM stands for Channel Relationship Management and PRM includes Program, each with the focused capabilities to sand behind the claims, I will search elsewhere to find an accurate and comprehensive representation of channel management. Whether fresh or stale, CRM, and by extension PRM, is no substitute.

 

Recently, I attended the TPMA annual conference. For the uninitiated, TPMA is an acronym for Trade Promotion Marketing Association-a consortium of trade/channel marketers in the Consumer Products industry. There were some interesting observations about the conference which proves again that "the more things change, the more they stay the same". Below is a listing of some of the insights disseminated throughout the conference, my apologies for not referencing specific speakers as these insights are sampled across many.

1. For consumer marketers, the trade promotion budget typically represent 50% of the over all marketing budget-or more (a high of 60% and a low of 35% as polled). Despite most packaged goods marketer LOSE as much as 20% on trade programs when comparing overall costs to any lift in volume. I can say that this was reported via a prominent Packaged Goods marketer headquartered in Cincinnati (you connect the dots)

2. It's no doubt that trade promotion effectiveness can still be a strong differentiator. Those manufacturers who have established best practices and insightful analytics have the edge-and are setting the benchmarks for the rest of the industry.

3. People really make the difference, not the software or system. Manufacturers should focus in strategy, and insights to build a library of best practices-and out source back office administration.

4. Less that 1% of trade promotion is spent online-this is interesting as many B2B marketers may not agree with that, but again this is a consumer products group. The challenge here is the lack of insight as to how to effectively measure the impact of online success. This is largely an issue with packaged goods marketers.

5. Trade promotion is a global phenomena, with more than 60% of the programs/spend happening outside the US. Overall, the challenge is developing the infrastructure, program guidelines, and best practices to conform to a global standard.

6. Trade Promotion program design is an art as much as a science. 2 B2B speakers (?!) presented their programs which had similar objectives, similar channels, and yet very different structure.

7. However basic, the key metrics common to most Trade Promotion programs are:

• Budget to spend
• Net incremental sales
• ROI - consumption or shipment based
• ROI - variable and fixed margin
• Incremental spend

8. As with other product/channel types, social media is all the buzz. But like sex as a teen-ager, more people are talking about it than doing it. Retails however, see the value in social media as a relatively low cost means of capturing consumer insight and feedback. No true leaders are emerging from a TPM perspective-yet.

Interestingly, if you remove the point about social media, all the "Hot topics" from this years conference were similar to the topics held by this very organization 20-years ago. Yet despite all the advancements in go-to-market strategies and technologies very little has changed. In fact, the theme of the conference was "Collaboration in a digital age". Perhaps the power of technology has its limits?