Unraveling the Data Dilemma
POS Data and Partner Performance
Channel Management Insights speaks with Bob Shecterle, InfoNow Vice President of Marketing and Product Management
Anyone in IT knows the acronym GIGO. This concept of garbage in/garbage out also applies to channel management. If vendors collect the wrong point-of-sale (POS) information — or insufficient amounts of the right information — they can find it more than difficult to manage their programs based on channel sales activity efficiently and effectively.
In addition, vendors may have a hard time evaluating these programs while they’re in progress and at their conclusion. And instead of strengthening channel relationships, vendors may actually frustrate their partners and threaten their participation in future programs.
How can vendors make their programs for everyone in the channel? And what role does POS data play in achieving this goal? InfoNow Vice President of Marketing and Product Management Bob Shecterle shares his insights.
CMI: Why is it important for vendors to collect POS data?
Shecterle: There are a variety of reasons. Driven by the need to expand sales into new geographies, get products to market more quickly and reduce sales costs, vendors today are realizing a rapidly growing percentage of revenue from an increasingly complex channel. As a result, it’s not enough to just manage channel processes; vendors must find more effective ways to optimize channel performance. But optimization requires visibility … the same visibility into channel relationships and activities that vendors have for direct sales. Timely, accurate and complete channel POS data is the key to achieving channel visibility and, ultimately, performance optimization. Vendors that effectively collect, identify and enrich POS data have increased visibility into what’s happening in the channel. They know what partners are selling, to whom and at what price. They have better control over internal sales commissions, so they can pay partners properly and in a timely fashion. Properly analyzed, POS data can also identify true end customers, uncovering buying trends early, to more effectively plan products and decide on pricing.
POS data also plays an important role in managing channel inventory. Vendors must have the ability to better manage their channel inventory, including tracking current levels, identifying where inventory is at every point in the channel and limiting exposure to obsolete inventory. Accurate channel inventory information also helps identify and eliminate gray-market activity, products sold into one part of the channel but sold outside the intended route.
CMI: What problems are inherent in collecting POS data?
Shecterle: When vendors collect POS information, it must be timely and complete, including all relevant information such as product identifiers, serial numbers, ship to/bill to information, sales price, etc.
But if vendors don’t have standards for data and data elements, they get a wide variety of information quantity and quality that varies in collection frequency from partner to partner. Therefore, as much as possible, vendors must identify key data elements, establish consistency across partners and get each partner on a reporting schedule that makes sense for that company. For some it may be daily, but weekly or monthly may work better for others.
Of course, regardless of reporting standards, vendors won’t able to dictate requirements to all partners. As a result, flexibility in managing disparate reporting formats, types and consistency is key.
For instance, vendors often encounter partners using different technologies to report POS data. Larger companies may have EDI [electronic data interchange], while others may use Excel spreadsheets or e-mails. Vendors must have a means to handle these multiple technologies, since they can’t force partners to report in a certain way.
In addition, vendors have to deal with variability in identifying information. On different reports from a single partner, there may be variability in the company name, or the address may vary (with some records showing street address, city and state and others having only the city and state). Vendors must be able to identify and rationalize all customer information.
CMI: How often should vendors collect and review this data, and why?
Shecterle: The more frequently, the better, so vendors can get a real-time view into what’s happening in the channel. Greater frequency also helps vendors understand trends and adjust inventory and pricing accordingly. However, the frequency they can achieve varies based on the size and sophistication of their partners.
CMI: How can vendors use POS data to determine which partners are — or are not — performing up to their expectations?
Shecterle: One of the key things vendors must do is set performance standards and goals in terms of data frequency, quality and completeness. Being able to collect and identify POS information correctly helps vendors create partner scorecards, so they know who the high achievers are, where they need to invest time, who needs remedial training and whom they should drop from their channel program.
|Best Practices for Channel Data Management|
CMI: Can they also use this data to improve partner relationships and performance? If so, how?
Shecterle: One of the barriers partners encounter in participating in sales and marketing programs is the length of time it takes for them to receive compensation for reaching performance goals. Vendors that can quickly pay money or credits eliminate this time-consuming wait.
In addition, by providing partners quick feedback, vendors can help them improve their overall partnership performance. As a result, they can give them recognition for what they’re doing well, by giving them better discount levels and inviting them to participate in additional marketing programs.
CMI: How can vendors use POS data to improve their market development fund programs and their performance?
Shecterle: They can show partners how they’re performing on a timely basis. Vendors can calculate payments and credits without partners submitting claims for a “claimless” process. They can understand how programs are working in real time, see milestones and thresholds, and offer additional incentives to partners as appropriate.
At the end of the program, they can accurately measure its effectiveness. Plus, they can use historical POS data to create a model of any future program and fine-tune it before it’s released.
CMI: How can vendors use this data to improve other types of channel programs?
Shecterle: With this data, vendors can match sales back to the program rules and criteria, measure how individual partners are participating, make payments and credits in a timely fashion, reduce manual record keeping, and understand the program’s ROI. Vendors can use this data with any program based on channel sales activity, tying it to different kinds of programs to help in their creation.
CMI: What benefits do partners realize from vendors’ collecting and using their POS data?
Shecterle: It reduces the partners’ time interacting with vendors to reconcile disputed claims, and it helps them manage their own markets. They get more accurate information from vendors about their performance, saving them time, money and aggravation. They also more accurately understand their market share with vendors, and the clout they have with them as a result.
CMI: What are the advantages and disadvantages of managing the process in-house as opposed to an outside source like InfoNow?