Understanding Partner Relationship Management (PRM) systems: When and why you need one

In the rapidly evolving business landscape, partnerships have become a crucial growth strategy for many companies. Some (such as Microsoft) actually attribute more than 95% of their revenue to their partners. Potentially you are looking at a gold-mine. Having that said, you would be foolish to believe that building partnerships is easy or fast.

There are systems that can help you boost some aspects of it (like PARTNER2B or Partnerplace), but is is still a marathon where a lot of effort is required. As these partnerships grow in number and complexity, managing them efficiently becomes a significant challenge. This is where a Partner Relationship Management (PRM) system comes into play. But before we delve into what a PRM system is and how it can benefit your business, let’s take a look at the typical progression of partner management.

The evolution of partner management

When companies first begin establishing partnerships, they often start with a simple approach—tracking partners using Excel or Google Sheets. At this stage, the number of partners is manageable, usually fewer than a dozen. The simplicity of a spreadsheet is sufficient to record contact details, manage communications, and track basic interactions.

However, as the number of partners grows to a dozen or two, companies typically find themselves outgrowing this manual method. At this point, many turn to Customer Relationship Management (CRM) systems to keep track of their partners. While CRMs offer more advanced features than spreadsheets, they are primarily designed for managing customer relationships, not partnerships. They can manage a few dozen partners effectively, but as the partnership network expands, the limitations of a CRM become apparent.

When a company reaches the point where it has several dozen partners, the complexity of managing these relationships grows exponentially. This is when a PRM system becomes essential. Unlike a CRM, which focuses on customers, a PRM system is specifically built to manage partner relationships, offering a comprehensive suite of tools to streamline and optimize every aspect of partner management.

The power of a PRM system

A PRM system can alleviate the burdens of managing a large and complex partner ecosystem by automating many recurring tasks. Imagine, for instance, that you need to onboard every new partner manually. With a small number of partners, this might be feasible, but as you scale to hundreds or thousands, it becomes a logistical nightmare.

A PRM system can automate the onboarding process, ensuring that each partner receives the necessary training, resources, and support without requiring your constant involvement. Or at least partially guiding your partners, so that you can earn more time to deepen the actual relationships with the partners. But onboarding is just the beginning.

A PRM system can also automate commission management, ensuring that partners are compensated accurately and promptly for their contributions. Again - when you are talking about hundreds of leads, it can become quite challenging to keep track of them. Not only that - you also have to know who you paid, when and how much.

A PRM system streamlines lead management, allowing partners to easily register leads and track their progress through the sales pipeline. Once a lead is won, not only will the partner automatically receive information about it, but you will also know how much and when you should pay him. File sharing, goal setting, and performance tracking are other areas where a PRM system can save time and reduce errors, freeing up your team to focus on strategic initiatives rather than administrative tasks.

By automating these routine tasks, a PRM system allows you to scale your partner program effectively, maintaining high levels of partner satisfaction while reducing the workload on your internal teams. We’ve actually run the numbers and if you have 100 partners, a PRM system such as Partnerplace can increase your teams' efficiency similar to hiring an additional 1,5 people!

Balancing Automation with Human Connection

While a PRM system offers powerful automation capabilities, it’s important to remember that your partners are not just data points—they are people. The success of your partnerships hinges on the strength of your relationships and not the amount of automation you have implemented.

Treating your partners as digital goods, to be managed solely through automated processes, is a recipe for failure. Instead, view automation as a tool to handle repetitive tasks, freeing up your time to invest in building and nurturing the human touch that drives business success.

In other words, a PRM system should be seen as an enabler rather than a replacement for human connection. It allows you to manage the growing complexity of your partner network efficiently while still providing the personal touch that makes your partnerships thrive.

For ex. at Partnerplace.io each partner has their own dashboard where they can see exactly how their collaboration is progressing - who did what and when. When a lead changes status - they get informed. When they change their company description - it gets recorded. Both sides of the equation have a place to communicate, share files, important information, and reach out when they need something. A timeline gives you a transparent overview of the whole partnership journey.

This is an example of automation, that still leaves room for human interaction. What’s more - our system will actually suggest such actions for you, if we see for ex. that you have not been the most active towards a partner.

Conclusion

A Partner Relationship Management system is a crucial tool for businesses that are scaling their partner programs. It evolves from basic tools like spreadsheets and CRMs, offering advanced automation to manage large and complex partner ecosystems. However, while a PRM system can handle many of the repetitive tasks involved in partner management, it’s essential to balance automation with personal interaction.

Remember, the key to successful partnerships lies in the strength of your relationships, and no system can fully replace the human touch. By leveraging the power of a PRM system while maintaining personal connections, you can create a scalable, efficient, and ultimately successful partner program. Feel free to reach out to us at Partnerplace.io to learn more.

Happy partnering!