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Best Practices to “CRM Your Channel”
What does it mean to “CRM your channel”? It means
to apply the same Customer Relationship Management
(CRM) tools and disciplines used with direct sales
organizations to indirect sales organizations in the
channel. Manufacturers have traditionally attempted to
manage their channel partners’ activities using their own
manual or legacy systems. Unfortunately, these systems
don’t integrate with the various CRM solutions that have
proven their value and become standard in most large
companies today. This lack of integration is a problem
for those vendors selling through a multi-tier distribution
system, and who derive a majority of their business from
the channel. When the channel is the predominant path
to their customers, how can these vendors leverage the
time, money and effort they have put into their CRM
solutions by applying these solutions to the channel?
Getting Channel Data into Your CRM
Getting channel data (such as point-of-sale, inventory
and sales-in, sales-out data) into your CRM can be
accomplished using Channel Data Management (CDM)
software from third-party vendors like Model N. The
more important issue concerns the benefits that can be
gained by doing so. Following are some key benefits
and best practices that stem from integrating channel
data into your CRM system. The examples shown use
Salesforce.com, a leading CRM solutions provider. But
the principles explained here can apply to almost any
CRM system on the market today.
Key Reasons to “CRM Your Channel”
Make Better Business Decisions
The first step in effectively using channel data is to get
it into the hands of the decision-makers, such as CAMs,
who are working directly with your channel partners. If
Salesforce is their primary system for sales information
and reports, it makes sense to put the channel data they
need directly into a system they already use.
Accurately getting channel sales data into Salesforce
involves matching point-of-sale (POS) data to the
account objects in Salesforce. This sounds easy, but it’s
quite complex. The account hierarchy in Salesforce rarely
matches your master customer/partner hierarchy, nor
does it match incoming POS data.
To solve this problem, you need to create a custom
Salesforce hierarchy and match your POS data to that
hierarchy. This structure keeps the POS data aligned with
what the salespeople are using in Salesforce, regardless
of the corporate hierarchy. For example, the corporate
hierarchy might have all Bank of America sites rolling
up to one state, say California. But the field organization
may be managing Bank of America sales at the city or
postal code level (San Francisco or 94109, for example).
You have to organize and match up the data based on
how the field is organizing it.
Once you have the channel data organized to match
your Salesforce hierarchy, it’s possible to make a
broad range of dashboards and reports to show the
key information that the field is using to make channel
program decisions. Figures 2, 3 and 4 illustrate some
good dashboard examples.
• Help Channel Account Managers (CAMs) and sales
executives make better business decisions
• Identify and recruit new channel customers
and resellers
• Quickly Identify out-of-warranty products
• Automatically close deal/design registrations
• Forecast channel sales in the same manner as direct
sales in Salesforce
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Identify and Recruit New Channel Customers
and Resellers
Whether to replace under-performing partners or
to grow into new or developing geographies, most
manufacturers are continually looking for new channel
partners. Distribution channel partners are a good
place to start. They have historic data on what products
resellers focus on and have sold, and can help identify
good potential resellers and end-customers.
Figure 2: Real-Time Channel Partner and Customer
Performance Visibility
Another way to identify potential resellers and endcustomers is to look within your own POS data.
Emerging resellers and end-customers who are already
buying your products may be difficult to spot. They may
buy from multiple distributors to spread their credit
profile, or they may spread their purchases across
multiple geographies. These actions make identifying
them difficult unless you automatically roll-up POS data
for each customer across distributors and geographies
using sophisticated matching logic.
Figure 5 demonstrates how such an approach would
work. In Salesforce vernacular, these customers and
partners would be called “unmanaged,” since they do
not currently have a Salesforce account assigned for
them. Once they are identified and qualified, it’s easy to
add them to your “managed” Salesforce account set by
creating a “new account.” An example of creating a new
account for Cyberdyne Systems is shown in Figure 6.
Figure 3: Consolidated Direct and Indirect Channel Visibility
in Salesforce
Figure 5: Identifying New Channel Partners and Customers
Figure 4: Channel Partner Inventory Visibility in Salesforce
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Figure 6: Creating a “New Account” from an Unmanaged Account
Quickly Identify Out-of-Warranty Products
Recurring maintenance agreements can be a significant
portion of a vendor’s revenue and an even higher
percentage of profits. Many vendors miss out on
potential revenue by not getting their partners to renew
these agreements in a timely manner.
Many vendors continue to support customers whose
products are no longer under warranty because the
vendor doesn’t have the data available to determine if
the product is still eligible. Having this data available in
Salesforce offers two advantages for reducing costs and
increasing revenue:
• Knowing which customers have a valid warranty
• Knowing which customers are candidates for
maintenance agreement renewals
A best practice to manage warranties is to include
the product serial number when POS data is loaded
into Salesforce. Vendors will then know the product
sold, what partners sold it, the date it was sold, what
serial numbers were sold and to which end-customer.
Whenever a customer or partner asks for warranty
support, the vendor’s customer service team will have
all the detail needed to know if the product is still
under warranty and if there is an active maintenance
agreement in place.
Figure 7: Identifying out of Warranty Products
Another benefit to this approach is the ability to provide
leads to partners when maintenance agreements
are about to expire. Partners receive leads based on
maintenance agreements sold 10 or 11 months prior that
are coming up for renewal. Metrics and incentives can
be put in place to encourage partners to renew these
maintenance agreements. Additionally, vendors will
gain the ability to redistribute their maintenance renewal
leads if the partner does not close them within a defined
time frame.
Automatically Close Deal and
Design Registrations
Deal or design registrations (the name differs depending
on your industry) are one of the key metrics that vendors
use to measure their partners’ demand creation activity.
They also measure how well partners protect design
efforts with a preferred price from the vendor.
A lot of time and effort is put into developing registration
programs and trying to measure results. Unfortunately,
POS data is often not matched to channel registrations.
When matching is attempted, it is often done manually in
a time-consuming process.
The best practice is to automatically close the registration
loop and match POS data to open channel registrations.
This is done by pulling in approved registrations from
your partner portal and creating “opportunities” in
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Salesforce. Your partner portal can be built in Salesforce
or in a number of other applications. Figure 8 shows an
open opportunity waiting in Salesforce for POS data to
come in and match it.
Once all the POS items for a particular opportunity have
shipped, the opportunity can be configured to close and
the shipping status automatically changes to “complete.”
Figure 10 shows an opportunity that has closed based
on all the product shipping. In this particular case, the
partner sold a bit more than expected and a negative
unshipped amount is shown.
Figure 8: Open Registration Waiting for POS Data to Match
Once the registration is loaded into Salesforce, the
best practice is to create rules to automatically match
this POS to open opportunities. These matching rules
can contain a combination of partner name, endcustomer name, date range, product or SKU, special
price or debit ID. Once developed, the rules are used to
automatically associate POS data to an open registration
so registration results can be fully seen and analyzed.
As noted in Figure 9 below, when POS data is reported
it will automatically match to an open opportunity in
Salesforce and update the shipping status, opportunity
stage, probability and shipped amount.
Figure 10: Closed Registration – All POS Shipped
Automating this closed-loop registration process has a
number of significant benefits. One benefit is to increase
partner loyalty and the likelihood that partners will
push your product. Another is to provide marketing
with timely feedback to determine if their channel
marketing programs are effective in producing ROI for
the registration program. Closing the loop on channel
registrations also improves channel forecasting.
Forecast Channel Sales in the Same Manner
as Direct Sales in Salesforce
By automatically closing the loop on channel partner
registrations, vendors can manage channel sales
forecasts much as they do direct sales forecasts in
Salesforce. Salesforce offers a number of tools to
support this effort.
Figure 9: POS Automatically Matches to Registration
in Salesforce
The first step is to forecast the run-rate business. Runrate business includes ongoing channel sales that are not
based on large, registered opportunities. The best way
to forecast run-rate business is to develop a projection
based on a combination of historic and recent sales
trends, adjusted for seasonal fluctuations. This method
is usually fairly accurate, especially when the number of
partners and transactions is large.
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Open deal registrations are then added to the run-rate
business to get a complete channel forecast. Similar to
direct sales, opportunities usually close in the month or
quarter expected. By automatically closing registrations,
you can see which opportunities remain open. You
can then forecast registrations using probabilities for
open unshipped, open partially shipped, and closed
registrations. Figure 11 shows how registrations based
on expected close date, value and probability can be
reported in Salesforce.
After calculating channel run-rate and registration
forecasts, the sales organization can combine the
channel forecast with their direct forecast into a unified
company forecast, all in Salesforce.
In Conclusion
Salesforce is the dominant CRM application used by
sales organizations to gain visibility into direct account
activity, sales opportunities and results. It’s important to
leverage that investment by including channel visibility
into the tool that channel and sales managers already
use on a daily basis. Better visibility into channel partner
and customer sales performance, emerging partners,
warranties, registrations and forecasts gives sales
executives and their management teams real-time
information with which to make better decisions and
drive channel growth.
Figure 11: Forecast Channel Sales Using the Same Tools as Direct
Sales in Salesforce
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Best Practices to CRM Your Channel