Originally Published: September 21, 2021

When you start to build out a channel program for your business, it’s crucial to understand each part of the process. There’s no such thing as a bad question at this stage. For example, many channel newbies may wonder about Partner Relationship Management (PRM) software and how it comes into play.

What is Partner Relationship Management Software?

According to Channel Mechanics, a PRM is:

A combination of software, methodologies, best practices, templates, and workflows that manage and automate the business processes and relationships between companies and their channel partners. Some refer to PRM as Channel Management or Channel Automation software.

That’s a succinct definition for PRM software, but let’s flesh this out further:

The best PRM software platforms aim to drive mutual sales growth for suppliers and their indirect selling partners by:

  • Organizing and orchestrating data
  • Storing and sharing assets
  • Tracking indirect sales transactions
  • Qualifying indirect sales partners for program incentives and promotions
  • Facilitating ordering and provisioning of provider solutions to partner-sourced end customers

Typical capabilities of PRM tools include:

  • Storing shared resources in a content management system (CMS)
  • Integrating with customer relationship management (CRM) software and popular third-party applications
  • Distributing provider-sourced and partner-sourced leads
  • Tracking allocation and use of marketing development funds (MDF)
  • Tracking and attributing promotions for select partners, partner types, and product lines
  • Analyzing financial performance, such as detailed pricing and sales data
  • Housing a library of partner sales and marketing materials
  • Centralizing KPIs, partner data, and administrative functions on a dashboard
  • Enabling deal registration for partners to claim leads
  • Training and certification on how to sell, order, provision, and procure provider services
  • Processing and fulfilling orders

PRM Software is Not the Same as CRM Software

Your company’s partner relationship management (PRM) software and customer relationship management (CRM) software are not interchangeable platforms in your tech stack.

CRM is a technology platform meant for managing your organization’s relationships and interactions with existing and prospective end customers. It assists with contact management, sales management, the productivity of individual salespeople, commissioning enterprisewide, and more.

Make no mistake, a CRM platform is a mission-critical tool for every business but doesn’t have the functionality of a PRM platform. A high-quality PRM enables vendors to automate and scale the following functions:

  • recruiting and onboarding new partners
  • enabling existing partners through communications, sales, and partner marketing support
  • qualifying and registering partner deals and incentives

While your CRM and PRM are separate systems, they are complementary and should be integrated, so vital sales data from the CRM connects and feeds into the PRM – giving your company a complete picture of your partner program’s return on investment (ROI).

ZiftONETM, for instance, integrates with leading CRMs such as Salesforce and Microsoft Dynamics 365, which was just announced in June 2022.

4 Pricing Considerations When Selecting PRM Software

One of the first questions most PRM buyers ask is, “How much is this going to cost?” This question has a complicated answer, but we’re going to share some guidelines for considering its ultimate cost.

Channel programs come in all shapes and sizes, so your approach to managing your partner community may differ greatly from another supplier’s approach. Accordingly, a PRM isn’t a “one size fits all” buying decision. Most channel programs start out small with only a handful of partners and an expectation of growth. At this stage, most partner programs can be managed using existing assets, such as a website, spreadsheets, and a CRM. There’s no need to think about investing in a PRM if your existing tools and a little manual effort will get the job done.

A rule of thumb is to start thinking about a PRM platform when you have more partners than fill up a single page of a spreadsheet, or usually about 20 partners. Once you get past a handful of relationships, partner management becomes more complex. To do a good job of it, you’ll need a system to automate most of the work.

PRM Software Considerations

1. What Type of Channel Partner Program Are You Managing?

Is your partner program supporting resellers, referral partners, or services providers? Who will generate the leads – you or your partners? This will determine if you need marketing automation, lead distribution, and/or lead registration. Will your partners facilitate transactions, or will they refer opportunities to your sales team? The answer to this question will establish your need for price books, deal registration, and perhaps special pricing and configuration support.

2. What is The Scale of Your Program?

How many partners are in your program? Is it tens, hundreds or thousands of partners? Perhaps more importantly, what do you anticipate it their numbers will be in the next few years? Investing in a PRM is a big decision, and you want to ensure that whatever system you choose will support your needs today and in the future. Typical enterprise software replacement cycles are between four and seven years, so your planning ought to go out at least that far. You don’t want to make a cost-based decision today that will force you into a costly replacement decision just when your program starts to grow.

3. What is The Geographic Scope of Your Channel Partner Program?

Where are your partners and their customers located? Will your need to support multiple languages and/or multiple currencies? Will you manage geographic regions with separate teams, and will they have different partner requirements and tiering? Will the goods and services vary by geographic area? Will you need to segment your content and marketing materials by geo? All of these considerations go into evaluating PRM software. Even a small channel program can face these complexities, forcing you to consider PRM platforms that would otherwise be aimed at much larger organizations.

4. What is The Engagement Level of Your Partners and The Scale of Business They Will Be Transacting with You?

The level of partner engagement and revenue contribution directly impacts your PRM journey. Some programs have lots of partners that rarely interact with their suppliers – sometimes called the “long tail.” Others have lots of partners that are active, but the value of their activity is low – perhaps they refer to small accounts. The average selling price for your offering and the average contribution from your channel partners will influence your level of investment in a PRM and the sophistication of your platform needs.

Most programs generate 80% of their revenue from about 20% of their partners. These are actively engaged partners with the scale to move the needle. The other 80% of the community has a hit-or-miss track record. Are you buying a PRM to support the revenue-producing 20%, or do you plan to use your new platform to more efficiently engage the 80% or both? The implication of the answer to this question will impact how you cost-justify PRM software licensing fees.

Outside of pricing considerations, you’ll need to evaluate the different types of PRMs available to you. Stay tuned for our next piece on the range of PRMs on the market. Gathering a holistic view of PRM tools will help you determine the best system for your unique needs.

Zift is honored to be ranked a leading provider of Partner Relationship Management by G2, the largest software marketplace with unbiased, validated buyer reviews.

With ZiftONE, you can align your channel marketing, sales, and operations like never before.

We’d be happy to show you how our platform and team can help your channel partner program. Contact our team to learn more today.