Despite most consumer electronics organisations deploying state-of-the-art software systems to help them increase productivity, improve customer engagement or realise cost savings, a significant number remain in the dark when it comes to accurately tracking indirect sales data. And are missing commercial opportunities as a result.
Many don’t have a full picture of the distribution chain once products leave the warehouse, let alone know if they are managing sales partner networks effectively. This lack of transparency around channel data is an enormous problem. Companies have found themselves, traditionally, being forced to rely solely on the data submitted by channel partners – regardless of its levels of accuracy. A recent independent survey completed by Zyme, in fact, showed that more than half (52 percent) of the 166 organisations interviewed had to simply ‘trust’ that the information their channel partners had provided was accurate.
In turn, this level of doubt creates a whole host of other problems. Not least is the over-payment of incentives and rewards to partners, which is standard practice due to continual confusion. Without specific information, suppliers err on the side of caution – overpaying their sales partners. A staggering 93 percent of the respondents said that they treat incentive payments as a cost of doing business, rather than seeing them as an investment to manage longer term return.
The worrying reality is that the majority of organisations still don’t have firm control of their channel data so can’t know if funds are being allocated incorrectly, or which partners may well be missing out. A quarter of organisations were concerned about incentive overspend on partner programmes due to problematic data collection and recording issues, while 37 percent worried about incorrect payments being paid to channel partners that would need to be identified, and corrected, later. Creating more pressure on resources to conduct back-checks.
A further problem created here is that 61 percent of the companies admitted that, in the last 12 months, financial rewards for the channel have had to be capped because of previous overpayments made in error. Hardly motivating.
Just having ‘trust’ in channel-submitted data is no longer enough to satisfy board members or stakeholders. They want facts and details.
This is where Channel Data Management (CDM) comes in. And to be successful, it has to be run on a cloud-based system. We designed a platform that can offer channel visibility by automatically taking the partner’s raw sales data, identifying the most important information and presenting it through analytics dashboards that are integrated into the vendor’s own business systems. Automating as much of the process as possible we can save time and costs for both sides of the sales function, and enabling almost real-time data sharing makes it a business dialogue that all parties can benefit from.
Because it’s cloud-enabled technology, there is no complication around upgrades, no expensive consultants onsite and every user within the business can access the data on demand. Immediate benefits to working collaboratively in this way include the ability to manage channel partner incentives efficiently, to automatically calculate and validate rebates and track any credits earned by partners. It can also manage data checks at key points during the process, pushing queries seamlessly back to partners if necessary, thus ensuring incentive payments to partners aren’t affected.
However, the IT channel is no longer a straight transactional play any longer. The continued adoption of both private and public cloud services among customers means the channel’s sales engagement is much more complex. Resellers are also becoming cloud service providers. Distributors can also be cloud aggregators. It’s a massive leap away from the capitalised, large upfront transaction to a services-based revenue flow, with opportunities for new revenue even coming in the post-sales delivery of the solution.
Vendors with cloud, software-as-a-service or other offers that don’t require physical distribution may need to connect multiple data sources to meet the same data profile requirements. However, cloud service providers can then use the data collected via CDM to manage their supply chain, build their inventory policies, drive incentive programmes, and shift their sales compensation models.
There is good news. 78 percent of the survey’s respondents actively want to understand more about channel partners and channel marketing expenditure, which demonstrates that vendors are ready to address all the issues surrounding analysing services-based sales data.
Because whether shifting boxes or offering cloud services, delivering actionable insights leads to a more accurate view of the sales channel which in turn improves margins, and creates a more productive sales force.