Partners in PRM

Keith Humphreys advises vendors to work on improving their partner relationship management.

A few years ago, analysts created a sub-market called partner relationship management (PRM).

They described it as "a type of web-based business-to-business enterprise software solution that enables suppliers to market, sell and/or service their offering in concert with complementary partners, such as VARs, systems integrators, distributors, agents and alliance partners".

In short, PRM can be compared to good old channel partner extranets.

Today's best-of-breed PRM vendors are small niche players that focus on IT and telecoms, and trying to stay afloat. In fact, their small size is probably one reason why nobody has heard too much about this market.

Another reason is, more importantly, the attitude of many vendors of all sizes that 'IT can build this for me.'

To date, most extranets start life as an item on the channel marketing tick list and only include 'sensitive' information such as price lists and sometimes a few sales tools.

Vendors do not understand that their partners can benefit from such systems and that PRM can become an effective sales tool.

This article is not attempting to explain why the concept 'IT can build this for me' tends to fail, nor is it an explanation of how PRM systems can benefit vendors and their partners.

We are reporting the results from a small survey conducted by EuroLAN Research on behalf of Computer Reseller News that asked tier-one and tier-two resellers about their views on their networking suppliers' channel partner treatment.

What do channel players think of their suppliers' extranets?
The clear answer to this is not much. Out of a scale from one (very low) to five (very high), partners rated their suppliers' extranets with a 'just-about-okay' score. So there is room for improvement.

In fact, even Cisco, which led 3Com and Nortel, has nothing to boast about. It is worth noting that the highest rating was found at Hewlett-Packard, which scored four out of five.

How well do partners believe their suppliers know them?
Not surprisingly, tier-one partners feel they are better understood (with a score of 3.7) than tier-two partners.

What is astonishing, though, is that tier-two partners scored their suppliers' understanding of their business with a very low 2.5.

In fact, many vendors (including 3Com, Allied Telesyn, D-Link and Netgear) scored well below this 2.5 mark. This is clearly not the image a vendor would like to have in this market and reflects the lack of support for, and focus on, the second tier.

Sales and marketing support
When asked to rate the sales and marketing support partners receive from their suppliers, an alarming picture was revealed.

While 'Information' and 'Training and certifications' rated above three, tier-one and tier-two partners gave low scores to vendors for 'leads', in terms of quality, and 'soft-dollar' schemes (all types of marketing funds passed through the channel) in terms of value.

Tier-two partners: the hidden layer
Our results showed a huge gap between tier-one and tier-two partners in dealing with leads. When available to partners, the quality and timeliness of these leads were given a rating of two and below. Also note that:

• Nearly two-thirds of Cisco's and 3Com's tier-two partners do not get leads, and many vendors do not pass leads at all.
• Marketing funds often are not offered or used (80 per cent for 3Com, 50 per cent for Nortel and 40 per cent for Cisco).

In conclusion
Any vendor working through the channel needs to concentrate on what its partners want and need.

While PRM benefits all channel partner relationships, it certainly comes into its own for channels addressing SMEs, such as the tier-two resellers interviewed in this study.

Vendors should focus on improving their channel marketing and deploy robust PRM solutions. They are advised to:

• Streamline and automate their partner processes, therefore making it easier for partners to leverage the support available (for example, closed-loop lead-management systems for more accurate, faster and effective lead distribution, and online marketing development fund management systems).
• Gather, analyse and leverage more pertinent information about their resellers in order to form a true partnership.

Keith Humphreys is managing consultant at EuroLAN Research.