THE
ELECTRONIC TIE
THAT BINDS:
CHANNEL PARTNER
COMMITMENT

Issue No 32

The Old Model

Almost ten years ago, we wrote an IF View on Nurturing Reseller Commitment which featured Lithonia Lighting, the World's largest manufacturer of lighting equipment.

In that IF View, we said that Lithonia recognised that it was its channel partners who had the product knowledge and customer contacts to get its products specified. Lighting equipment is a generic product, almost unidentifiable once it is installed.

Lithonia invested $20 million on computer links with its channel partners. Through these links, channel partners could, among other benefits, order, get design help and get updates on order status.

As good as the Lithonia IT links are, they are being replaced by a much more sophisticated tool - one delivered via the Internet.

Channel partnering is becoming increasingly complex. Keeping track of channel partner needs, program planning and funding, channel partner skills inventories, accurate lead targeting and information flow are only a few areas that manufacturers need to track.

The New Model

Product differentiation decreases with increasing technology. Often the only differentiator among products with similar functions is how they're distributed. A key factor in distribution is dedicated, motivated and committed channel partners.

Price cutting or extra financial benefits are not a viable route to channel partner commitment. Electronic commerce links that are carefully thought out, well managed and totally responsive, are the ties that will bind in the future.

Implementing the New Model

Allegis, a San Francisco based corporation, is an Applications Service Provider, whose specialty, Channel Partner Relationships Management (PRM), operates over the Internet.

PRM systems help to integrate channel partner activities through improved communications, program co-ordination and performance assessment.

Such PRM systems use secure extranet technology to connect manufacturers with their worldwide channel partners resulting in channel partners' instant access to information and tools which leads to high channel partner adoption rates at low costs.

A PRM system uses the Internet to integrate channel partners into one extended enterprise. Allegis' software includes a Best Practice Monitor which is displayed in a library of do's and don'ts for both manufacturers and channel partners. Other PRM functions should:

• Enable channel managers to know their best partners, send them appropriate sales leads and highly targeted messages within the network.
  
  
• Enhance collaboration with channel partners to align manufacturer/partner goals and ultimately create channel partner specific marketing programs, fund allocations, leads and other incentives.
  
  
• Enable channel partners to define, communicate and manage programs in progress throughout their channels and provide them with templates to identify program activities and tasks, manage funds identified for individual program activities and measure program success.
  
  
• Help cut funds management red tape that often debilitates channel program success.
  
  
• Help measure channel funds investments ROI.
  
  
• Help channel managers and sales partners to quickly identify the most successful programs so they can maximise them in broader venues and ultimately instil institutional learning.

PRM software allows manufacturers to turn their marketing channels into a real competitive advantage via e-Commerce strategy. PRM is a tool for the new age of channel partner relationships.

PRM is the tie that binds because it lowers the cost of doing business for suppliers and channel partners while making it very easy for channel partners to do business with suppliers.

As partners and channel levels increase, so does complexity

IF View may be reproduced provided IF Consulting is acknowledged.