March 2016 Feature

The Real Potential of PRM

When partner relationship management software gets teamed up with predictive analytics, the sky’s the limit for channel revenue growth

by Hobart Swan

DeSocio-smRelayware’s Chief Revenue Officer Jim DeSocio says he’s just as guilty as anyone else in his position. He was there in executive sales positions, even executive channel sales positions, when companies were throwing all kinds of resources at their direct sales teams—training them in sales methodology, teaching them the art of nurturing a lead and closing a sale, giving them lots of incentives and lots of internal support. But the people out there selling at the partner level? They got zilch. The prevailing wisdom, DeSocio recalls, was that channel partners could take care of themselves. After all, it was in their own best interest to go out and educate themselves. They’d be fine.

Fast forward a few short years and DeSocio, and an increasing number of his peers, have turned their thinking around 180 degrees. The big opportunity these days, particularly with so many companies moving more aggressively into the channel, is to direct those same resources at the partner level.

Prior to joining PRM-developer Relayware in early 2015, DeSocio was EVP of Field Ops, Sales, Professional Services and Business Development at XRS (Xata Road Science), EVP of Sales and Business Development at Antenna Software, and EVP Global Operations at Lawson Software. An expert in enterprise resource planning (ERP) and electronic resource management (ERM) systems, DeSocio has built and run very large channel organizations for large companies. As such, and given his position with Relayware, we thought Jim would be the perfect person to talk with about the present and future of partner relationship management (PRM).

Q: Vendors’ thinking about the importance the channel sales force has undergone some dramatic changes of late. Why is that?

It’s funny that people train the heck out of their direct sales people so they can succeed in a very competitive world, but then think their channel can drive revenue without the same kind of investment. So, yes, you’re right. That kind of thinking is changing—especially, as you say, now that many vendors are turning more to indirect sales.

Q: Why are vendors moving in that direction?

For one thing, it’s because a direct sales force is extremely expensive and risky. You’re making a big investment of people, time, effort, and opportunity management into a sales model that, in many ways, doesn’t fit the current B2B buyer’s journey. Sales these days tend to be much more driven by referral than by traditional marketing, and channel sales people tend to be much closer to buyers than are internal sales team. They visit buyers. They know them. And if they are properly educated and trained, partner sales reps can leverage that familiarity with end users to bring in more revenue.

Q: So PRM systems are all about educating sales people at the partner level?

That is certainly a key aspect of what they do. As a PRM company, Relayware has invested a lot of resources into building learning management systems (LMS) that give channel sales people a direct path to becoming well educated about vendor offerings.

Q: The sort of things you might expect to find inside a partner portal?

Well, yes and no. For a few years now, portals have been promoted as a way to keep channel sales people up to speed on vendor technology. But there is rarely a method to the madness: the partner or partner salesperson enters the portal, finds all kinds of training materials, white papers, and other information, but really has no idea how to engage with all that content. The introduction of LMS (learning management systems) into the portal puts all that content into a clear learning framework sales people can follow to become educated on—and certified in—a vendor’s products and services.

With good PRM companies, the learning management systems they put in partner portals are comparable to the majority of the learning management systems on the market today. But they will be specifically geared to train and certify the channel.

Q: How important is product certification these days?

It’s becoming much more important. Vendors need to constantly touch their partner sales teams, telling them about new courses to take or that they need to update their certifications. If a partner has an average of 1 or 2 people certified for a given product, we’ve seen PRM raise that to 5 to 7 people. And the more people who are certified, the more the partner is going to sell, because their team knows the product better. And the more they’re selling your product, the less they’re selling your competitors products.

Q: So you said that partner education is a key aspect of what PRMs do. What else do they do?

We do a lot of things. First of all, PRM systems can help vendors stay engaged with their channel partners. Let’s face it; partners can sell anybody’s security packages. But you want them to sell yours. To maintain partner mindshare, vendors have to continuously engage with partners. A PRM system makes it easier for vendors with hundreds or thousands of partners to maintain that engagement and keep partner sales reps educated and motivated to sell their solutions.

To maintain partner mindshare, vendors have to continuously engage with partners. Click To Tweet

PRMs also make it easier for vendors to market to their partners—to let them know what you’re doing, what’s new, what’s changed, what’s exciting about your product as compared to your competitors products. Today’s partner relationship management is about a lot more than just creating a portal. Good PRM is about helping vendors communicate with partners on a day-to-day basis, drawing them into your partner ecosystem, and providing them with the LMS processes, the content, and the skills they need to succeed.

Q: So that is the carrot pulling vendors in the PRM world?

Well, I think what’s drawing a lot of companies in is that they’re starting to see the ROI of PRM, made possible by the intersection of PRM and predictive analytics.

In addition to providing learning management systems, certification programs, and partner marketing programs, one of the big things top-tier PRMs do now is gather data. In particular, PRMs gather data on what sales people are learning through the portal, the resources they are using, and their success at selling. Which sales people are taking an interest in downloading information? Which ones are actually taking the courses and watching the videos that are provided to them? What are the day-to-day behaviors of the most successful salespeople? Which sales campaigns work? Which don’t?

We also work with CCI to help vendors understand what kinds of incentives work best to motivate sales reps. What rewards make them want to get the training and education they need, follow approved procedures, register deals, and make other vendor-preferred behavior changes.

Overall, PRMs are getting very good at collecting the data that provides visibility into the nitty-gritty of what makes sales happen in the channel. With that information, the PRMs can then take the next logical step and start predicting what kinds of sales behaviors lead to the best sales results. And that leads to the development of data-driven best practices.

Q: Is there enough data to serve as the basis for these supposed “best practices”?

When you consider the size of most large vendors’ channel programs, you can see how quickly this kind of data can be accumulated. Let’s say a vendor has hundreds of its partners on a PRM platform that sells the same solution. That’s a lot of data, the analysis of which can lead to great insight. Imagine if, when a specific type of sales opportunity is logged, the vendor’s partners know exactly which case study or white paper to give the customer, which specific campaign will work best, and what kinds of social media posts will give the customer confidence in the vendor’s solution. Over time, with data collected from hundreds if not thousands of partners, PRM systems can get very good at showing partners exactly how to organize their sales resources to close deals.

Enterprise PRM is all about tracking data—big data—and then turning it into actionable items. That’s the real future of PRM; creating a set of best practices that can help vendors build the perfect partner profile, select the right partners, and then work intelligently with those partners to beat the competition.

The real future of PRM: creating best practices that help vendors build the perfect partner profile Click To Tweet

Q: So it sounds like a PRM can do a whole lot more than just manage partner relationships.

It can. A PRM can help companies build best sales practices, improve partner education and certification and, with all of the churn among partner sales teams these days, help partners quickly get new employees on-boarded and up to speed… like automatically sending new employees an email welcoming them the company and informing them of the courses they need to take to be certified (and once they’re certified, the courses they need to take after that.)

Consider too that one of a vendor’s best partners might have 15 sales reps, only three of whom have actually sold any of the vendor’s products recently. PRM gives the vendor the tools to make those other 12 reps successful too. It’s not just making your partner companies more successful; it’s using data to make individual sales reps within a partner’s organization more successful too.

A final benefit of PRM has to do with the old 20/80 rule: 20% of your partners drive 80% of your revenue. PRM helps you identify your best partners, and what they are doing that make them so successful. If you can use that information to move middle-tier partners to the upper tier by telling them what your best partners are doing on a day-to-day basis, that can translate into millions and millions of dollars in new revenue.