In this Executive Brief we will look at challenges that arise when companies use a Customer Relationship Management (CRM) system to manage their indirect sales process. We will also discuss how Partner Relationship Management (PRM), when implemented correctly, can be used to bridge the gap between vendors and their end customers by managing partner relationships during the first stage of the distribution strategy.

1. EXECUTIVE BRIEF
PRM or CRM?
The Right Choice
for the Indirect
Sales Channel

2. In this Executive Brief we will look at challenges that arise
when companies use a Customer Relationship Management
(CRM) system to manage their indirect sales process. We
will also discuss how Partner Relationship Management
(PRM), when implemented correctly, can be used to bridge
the gap between vendors and their end customers by
managing partner relationships during the first stage of the
distribution strategy. Let’s get started by defining CRM and
PRM:
Customer Relationship Management (CRM). A system
of record for managing customer information, typically
used by direct sales teams. It is used to organize and
automate sales processes, direct lead traffic among the
various members of a sales team, and track revenue
opportunities from lead generation to a closed sale. After a
sale, it is used to maintain a relationship with customers,
assigning and managing requests for service and support.
Partner Relationship Management (PRM). A system of
record for managing sales partners, designed to support
broader areas required to engage, manage, and develop a
network of sales partners.
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INTRODUCTION

3. ANATOMY OF A DISTRIBUTION STRATEGY
When vendors market their products through
an indirect sales channel using a network of
resellers (distributors, VARs, dealers, etc.),
the sales process from manufacturer to end
customer usually consists of two (or more)
distinct stages:
• Stage One. Between the vendor and its
channel partners.
• Stage Two. Between the channel partners
and the end customers.
Many sales organizations use CRM systems to
manage their interactions with customers and
automate their sales process. But while CRM
systems are almost universally accepted as
the best tool for managing direct sales, they
were never intended to be a solution for
managing indirect sales through channel
partners.
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4. HOW CRM FALLS SHORT IN THE CHANNEL
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CRM systems have their place in the modern enterprise, but in the indirect sales channel, CRMs are not up to the task of
handling the complex task of maximizing profit and growing sales through distribution partners. Here are three reasons
why:
1. CRM systems lack core functionality for channel management. To increase mindshare with partners and to
effectively manage channel conflict, indirect sales channels must be managed through a bi-directional process. This
process assigns qualified leads to the right partner and allows partners to register leads through an approval process.
It’s important to note that CRM systems aren’t equipped to handle user based communications such as training and
certification records, how market development funds (MDFs) are dispersed, and specific marketing data.
2. Unifying channel partners on the same CRM is cost prohibitive. Having a manufacturer get all its channel
partners to agree to use the same CRM system can be helpful, but the costs of implementing the system across the
board can be astronomical. As previously described, CRMs lack key functions needed in channel management, so the
ROI can be relatively low when using one to manage channel partnerships.
3. Non-captive channel partners have their own CRMs. A non-captive channel partner represents several different
brands. They naturally choose to focus their efforts on the brands that will give them the most sales success in
return for the smallest amount of difficulty. To demand a non-captive partner to use a specific CRM, a manufacturer
would risk losing mindshare, driving their selling efforts towards competing brands. When using two different CRM
systems the risk of channel conflict is increased, and the flow of valuable sales information between the manufacturer
and channel partner is delayed, or non-existent.

5. THE IDEAL SOLUTION FOR INDIRECT SALES:
PRM INTEGRATED WITH CRM
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A key aspect for any PRM implementation is the ability to integrate
lead management workflows from the vendor’s CRM into the PRM.
The best PRMs integrate with CRMs to provide:
Deal registration and approval. When a channel partner
registers a deal in the PRM, the manufacturer will receive
notification and can either approve or reassign it. This is critical
for avoiding channel conflict.
Lead distribution. As vendors generate their own qualified leads,
they need an effective way to distribute these leads down to the
right channel partner to execute the sales process.
In both examples, a bi-directional integration between the PRM
and CRM allows the vendor to have a consolidated view of their
entire sales pipeline, while being able to closely track the progress
of leads and opportunities in the sales channel.

6. 6
PRM is the ideal solution for optimizing the indirect sales channel because it allows channel partners to choose their own
CRM without depriving the manufacturer of valuable sales and lead information. Furthermore, a PRM puts vendors in a
better position to gain partner mindshare through the following four best practices of channel management:
1. Collaboration. This area allows vendors to work closely with their sales partners at various phases of the sales
process, and to close more business.
2. Marketing and Communications. PRM systems can differentiate among partners’ roles in the channel and provide
accurate and effective marketing tools and communications content that is specifically relevant to them.
3. Training and Certification. Leading PRM systems provide a sophisticated learning management capability to
support sophisticated training programs, with the ability to track the progress of channel partner employees
throughout the training and certification process.
4. Performance Management. Reporting and performance dashboards allow vendors to accurately track various levels
of partner success, including sales performance, training complete, MDF/incentive participation, and overall
engagement.
PRM not only gives manufacturers and their partners a way to share sales and lead information across different CRM
systems, but it makes it easier for both sides of the partnership to do business together.
LogicBay’s PRM technology is bi-directionally integrated with Salesforce.com, MS Dynamics, and HubSpot. It is our goal
to work with clients – regardless of the CRM they currently have in place – to ensure an integration strategy that is
successful for them, and their partners.

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