Partner Relationship Management (PRM) and Why it Matters.Friday May 1st, 2009
It makes total sense, especially for small companies with limited cash and resources. Why spend the time and money to learn a new skill or invest in new technology when your 'partner' has already mastered it or purchased it?
Have you heard of PRM? It stands for partner relationship management. Contrary to how it sounds, it’s not a new type of marriage counseling. PRM is a business strategy that allows a number of corporate entities to team up and benefit from shared information, cross-over interest, indirect sales channels and integrated systems. It makes total sense, especially for small companies with limited cash and resources. Why spend the time and money to learn a new skill or invest in new technology when your ‘partner’ has already mastered it or purchased it?
Although PRM is a fairly new term, the strategy has been used as far back as the 1940s in Japan. Following WWII and the destruction of family-owned monopolies in Japan, “keiretsu” were organized to prevent hostile takeover and better handle world trade competition. These Keiretsu were loose partnerships that helped stabilize the economy through shared resources and splitting costs. The most well-known that still exist today are Mitsubishi and Mitsui.
The “keiretsu” has made its way to the states and is most commonly termed PRM. Companies like Cisco have a horizontal PRM infrastructure, allowing sales strategy, technology and customer service tools to be shared and available to all of its partners. Now their partner channels account for 80% of their sales. How can you be like Cisco? Here are a few ways:
Turn your suppliers, distributors, vendors and partners into your sales team, and vice versa. If you give your network the training, information and tools to sell your products, you’ll be surprised at the increase in referrals, indirect sales and strategic partnership opportunities.
Share your capabilites. Whether it’s technology, administrative tools, software, cash or advice, make sure you are giving your partners the tools they need to be more efficient in helping you.
Share your contacts. Visibility is important, and nothing is better than a friendly introduction. Look for ways to connect your partners with each other, helping to find solutions to their problems and easing their processes, all while extending your network.
Organize together, think together. If you have a great idea, focus on how you can get the ball moving right away. Do this by finding out who is willing to devote their energy, share the costs and help in the development of a project. It’s true, too many cooks in the kitchen is a bad thing, but a strategic partnership is a great way to foster innovation and to stay active, especially during sluggish times.