It’s fine to talk about all the benefits of Partner Relationship Management (PRM) software in the abstract, but sometimes it's important to lay out the business case in order to move forward.
Whether it’s showing the value of PRM to your own executive team, or using it as a selling point when recruiting new sales partners, being able to show some hard numbers pointing to the effectiveness of PRM can be a big help. This starts by looking at the areas where PRM reduces inefficiencies and other barriers to revenue, then by applying those key points to your own financials.
We have identified seven key areas where PRM can impact an organization's ability to increase revenue, reduce costs, and drive a positive ROI.
Seven Key Ways PRM Removes Drags On Revenue
1 – Onboarding New Partners
PRM creates a central repository of information which can greatly speed up the amount of time it takes to bring a partner onboard. In most cases, this can reduce or even entirely eliminate the need to fly reps around the country to handle onboarding.
2 – Streamlining Lead Management
As we’ve discussed before, good lead management is crucial for an effective indirect sales ecosystem. PRM significantly improves the process of collecting leads, distributing them to partners, and tracking their progress towards conversion.
3 – Training Channel Sales Reps and Technicians
Traditionally, this is another area that required huge expenditures conducting in-person training classes and seminars. PRM allows for centralized learn-at-your-own-pace online classes with tracked testing modules. The cost benefits for yourself and your partners are immense.
4 – Avoiding App Clutter
Having a maze of ad-hoc single-purpose software apps can strangle an ecosystem and create productivity bottlenecks at every step. PRM is an all-in-one solution that can replace most or all of your separate software apps with a single portal with everything you and your partners need, simplifying every aspect of day-to-day business.
5 – Keeping Channel Partners Updated And Current
Because there’s effectively no limit to how much information and intelligence can be stored in a PRM system, it can easily become the go-to source for news, new product data, marketing materials, technical documentation, incentive programs, and more. Single-source digital distribution slashes the costs of circulating these materials.
6 – Getting Realtime Feedback
One module of the PRM platform is a real-time dashboard which can be used to give channel managers -as well as potentially managers at the partner level- access to a complete overview of the sales ecosystem. Robust analytics and KPI tracking bring unprecedented day-to-day oversight of the channel. Nothing is left to chance, and problem areas have far less opportunity to slip through the cracks.
7 – Improving Mindshare
As more companies turn to indirect-sales models, that creates more competition within your sales partners. These elements -and more- combine to ensure you have plenty of mindshare at the partner level, and they continually see the benefits of working with you and pushing your products/services ahead of other vendors they may work with.
Estimating ROI Numbers For Your Own Ecosystem
To create a decent estimate of what sort of impact PRM might have on your own revenue, there are three key numbers to consider: The number of leads\opportunities per month, your close rates as a decimal (as in .25 for 25%), and your average deal value. Leads x Closes x Value = the average revenue for a month.
Based on our own years of experience consulting on vendor\partner relations and implementing PRM systems, we can say that a conservative estimate of the increases PRM brings is 10%. The average is more like 20%, and in some cases we’ve seen particularly-disorganized ecosystems see 40%+ improvements in revenue once PRM is implemented.
If you want a more accurate estimate, look at the numbers within your organization for some of the key points mentioned above, such as your current onboarding costs. How much would you save if, for example, you only had to occasionally fly representatives to meet with partners in-person rather than doing it regularly for matters like onboarding and training? How much are you currently spending to create and distribute physical promotional materials that could be handled all-digitally instead?
Factor those numbers into your estimate, and you should have a good ballpark number for the potential ROI on your PRM investment.
Additionally, you might consider consulting with your partners on how much those seven factors cost them, either when working with you or with other less-optimized vendors. That would allow you to create an estimate for the partner-side savings PRM will create, and give you a major selling point when recruiting new partners to your ecosystem.
Looking For More Help With ROI Calculations?
In our exclusive eBook “The ROI of Partner Relationship Management: Making The Business Case For PRM,” we take a deeper look at the numbers side of Partner Relationship Management software, including a simple fill-in-the-blank solution for calculating our own costs.