Channel management solutions are necessary to facilitate the relationship between the software vendor and the channel partners. In the IT industry, software publishing enterprises are the ideal market in need of channel services to boost sales revenues.
In the IT industry,
software publishing enterprises are the ideal market in need of channel services to boost sales revenues. Channel management solutions are necessary to facilitate the relationship between the software vendor and the channel partners. Channel managers are tasked with developing the partnership and streamlining the sales process by channels.
In channel management these tasks are essential:
• Handling relationships – There are generally three parties involved in channel sales: the vendor, reseller or partner and the customer. The margins, credit limits, product price list, terms, etc, must be set. Proper pricing is crucial. It must not be set too high or too low and neither should the margins that affect the final price consumers pay for. Aside from pricing issue, the products have to match the resellers. High value products for example need to be assigned to VARs or Value Added Resellers who have previous experience in selling these kinds of products.
Conflict management comes into play especially between partners. One of the most prevalent challengers in channel sales is too much competition. Sometimes even the vendor would pull the rug out from under a partner when it sees an opportunity to reap the profits for themselves. Stealing leads are frowned upon but not unheard of in the industry.
• Product management and order approval – When leads push through, then the vendor must have the capacity to deliver the product to the end users. Included in this task is the delivery of license key since the product is software applications. In international markets, like Asia or Europe, the prices on the software may differ to reflect the market. It is imperative that resellers be recruited from countries where the product is being sold because they would be more efficient in selling the product since they know the language and has presumably built their reputation locally.
• Payments processing – There must be standard operating procedure for generating invoices and handling payments. One of the biggest hurdles in channel sales is on time payments from customers. It is important to reconcile the accounts or else it is a loss for both the vendor and the partner.
• Report Generation - These are unavoidable tedious paper work for channel managers that consume valuable time. They are required however, so companies can gain valuable insight to how they are progressing as far as channel sales goes.
A Partner Relationship Management or PRM tool can provide solutions and help in with these tasks of channel management. PRM offer features that would make the job of channel management a lot easier:
• Set partner levels or tiers – Vendors with hundreds of different channel partners would be at a loss on how they can differentiate the low-performing resellers from the high-performing resellers. With a fully automated system, resellers’ performance are transparent and based on the information, resellers can be awarded silver, gold or platinum status.
• Training, support and marketing materials – With a comprehensive PRM channel management solution, partners will have a valuable resource for product information, and marketing materials to use in generating sales.
• Automated reports – Manual tallying of sales is eliminated because the report is automatically generated. Channel managers and resellers will be allowed to focus on a more important task which is selling.
• Channel management conflicts are averted because with features like lead registration, partners will avoid competition with each other for the same business.
