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”

• 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

Best Practices to “CRM Your Channel”

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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.

Best Practices to CRM Your Channel

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Figure 2: Real-Time Channel Partner and Customer Performance Visibility

Figure 3: Consolidated Direct and Indirect Channel Visibility in Salesforce

Figure 4: Channel Partner Inventory Visibility in Salesforce

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.

Another way to identify potential resellers and end-customers 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 5: Identifying New Channel Partners and Customers

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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.

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, end-customer 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 9: POS Automatically Matches to Registration

in Salesforce

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 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.

The first step is to forecast the run-rate business. Run-rate 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.

Figure 11: Forecast Channel Sales Using the Same Tools as Direct

Sales 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.

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