Channel Marketer Report

Channel Data Management

Investments In Channel Programs Lag Despite Measurable Impact On Revenue

While the 2020 State of the Partner Ecosystem report by Crossbeam, a collaborative data platform provider, clearly confirmed that partner programs have a measurable impact on vendor revenue, it also indicated that many companies are not fully supporting their channel initiatives.

More than 90% of the respondents to the survey said partnerships have measurable impact on revenue. Partners were also credited with providing entry into new markets, supporting client retention, and expanding marketing capabilities

Nonetheless, 78.6% of respondents said that getting additional resources for their channel program is a challenge. For example, fewer than a third of respondents said that they have implemented a partner relationship management platform.

The difficulty that channel leaders have in getting critical resources often reflects their inability to quantify a financial case for investing in the tools and processes necessary to manage their channel business, said Dave Hafermann, Principal, Go-to-Market/CRM Solutions at Vistex, a marketing solutions and services provider. “Too often, these cases are made anecdotally. But it doesn’t need to be that way.”

Channel managers can make a clear case by measuring and understanding the cost of inaction plus risk of non-compliance. “It’s likely that channel managers already have the underlying data available that is needed, and with the help of finance and/or compliance teams can build a case that justifies the investment on cost savings alone – particularly if they have a large amount of revenue flowing through the channel.”

“If you have a lot of revenue flowing through your channel even low rates of inaccuracy in revenue attribution can quickly add up millions in ‘unassigned” revenue,’” he said. “So, the ability to quantify where you stand with respect to attributable vs. unassigned revenue can form the basis of your case to get the tools you need to get to a better place.”

Dave Hafermann, Principal, Go-to-Market/CRM Solutions, Vistex

The ability to accurately attribute partner revenue is not only key to understanding partner performance, “it also drives many of the benefits (and payments) partners derive from the vendor’s channel program,” he continued. “Best-In-Class vendors sustain 95%+ accuracy of partner revenue attribution via automation, and ultimately attain 98%+ with surrounding process & controls.”

Because successful channel programs are highly data driven, “having accurate data is essential in order to properly set targets, deliver benefits and reward partners for performance,” he continued.

Three key technologies must all work in concert to help to capture and maintain channel data accurately and at scale to deliver sustainable partner revenue attribution, Hafermann said. They include:

  • Partner Relationship Management (PRM): enables management of partner relationships and tracking of partner activities and interactions
  • Master Data Management (MDM): enables unique identification and accurate definition of partners within the vendor organization
  • Channel Data management (CDM): enables standardized POS capture, validation, enrichment, aggregation and attribution of partner revenue across the vendor’s distribution channel

The benefits that these tools provide for vendors include:

  • Understanding who their partners are and how they interact with them;
  • Classification and segmentation of partners to understand their capabilities and how best to support and grow partner relationships;
  • Measurement of performance to determine which partners are most and least valuable, and;
  • Determination of partner eligibility and access to resources and tools based on the value a given partner provides.

For partners, these solutions help them understand how they can maximize their relationship and opportunities with the vendor. They build trust that their performance (and benefits) are accurately determined. And they minimize internal costs for managing participation in the vendor’s channel program.

The “icing on the cake,” said Hafermann, is that once channel leaders are able to develop and sustain an accurate, data-driven channel program infrastructure, there are substantial incremental topline benefits that are likely to follow as well.