PRM versus CRM: Why You Need Both!
Posted by Todd Grant on Fri, Nov 04, 2011 @ 12:34 PM
They both enable a more productive sales flow and they both have RM in them, meaning Relationship Management, so they must be the same…..right?
Not at all, there are distinct functionality differences between PRM and CRM platforms. The latter were designed, developed and implemented with only the direct selling environment in mind. PRM systems on the other hand are launched to manage indirect channel relationships where the OEM is at least one-step removed from the end customer.
The space known as PRM surged 10 years ago and went dormant for a while when CRM was on a huge upswing. Now, it has become apparent to those companies that launched enterprise-wide CRM systems that those systems are deficient in many ways when it comes to managing an extended sales enterprise particularly independently owned and operated businesses such as channel partners, dealers/distributors and franchisees. While the likes of Salesforce.com, SAP, Oracle and many others are adding partner support modules to their customer management functionality, many believe strongly that there is a place for a specialist PRM solution with robust functionality specifically for the purpose of managing partner relationships and that the PRM solution should be integrated with CRM platforms.
Conventional CRM systems enable the collecting and sharing of data, not only throughout the entire selling sequence from lead to deal close, but also for managing client relationships post-close across other enterprise business processes. PRM, on the other hand, is designed to manage a complex ecosystem comprising legally independent partner organizations. This one-to-many model, often with multiple layers and different types of re-seller partner revolves around aligning business processes, work-flows and goals across what is called the extended sales enterprise. This complex environment requires system functionality that is role-based and very sophisticated in order to accommodate a value life-cycle that is bi-directional, from OEM, to channel partner, to end-user customer and between every entity in the value chain and then back up to the OEM.
Here are some distinctions that make PRM different and stronger for managing indirect channel relationships:
- The ability to launch powerful online communities that foster collaboration and knowledge transfer between all parties in the extended sales ecosystem
- Role-based marketing. Communicating person-specific messaging based on the person’s role, their region, the re-seller model, the brands they sell etc… etc… In other words, what each person sees in a PRM environment can be controlled administratively by the OEM
- Learning management including comprehensive training and certification (including on-line and offline training support) so that the OEM knows who’s ready to sell and service effectively
- Sophisticated Content management functionality
- Performance management including managing incentives
- An ability to integrate all existing partner-facing systems into one platform so that the re-seller partners have one access point with a single sign-on
- An OEM dashboard exposing in real-time (much of this data can be pulled in from the company’s CRM platform) how well or not so well dealers are doing to meet the OEM’s objectives
At the end of the day a PRM is all about making it easier for a re-seller partner to do business with a manufacturer; whereas a CRM provides greater visibility deeper into a sales process.
Every partner has their own way of running their business; processes and business goals are often misaligned. This makes reporting and measuring channel results incredibly difficult if not impossible. CRM systems were not inherently designed to manage this level of complexity. To truly manage indirect business relationships, enterprises need a PRM system to close the loop between all participants.
Is there a difference between CRM and PRM? Yes. Should companies have both CRM and PRM? Yes again. Because both sales business models--direct and indirect--require systems specifically designed to obtain peak performance.