16th November’22: Businesses can be classified into different categories depending on how far removed they are from the end consumers. Some businesses are B2B (business-to-business) which sell their goods or services directly to other businesses, which then take their output as raw material, or consume their services (software, machinery, or manpower) to transform raw materials into finished products. Some businesses are B2C (business to consumer) or D2C (direct to consumer) which provide their output (goods or services) directly to the end consumer.
This article focuses on the third type which is B2B2C or B2B2B2C businesses that use partners in their value chain to get their goods into the market. Some examples would include consumer goods, FMCG, FMEG (fast-moving electrical goods), Agri, etc. They SELL their products to their partners, like distributors, dealers, wholesalers, retailers, etc. This helps them reach the end consumers efficiently. These businesses are distribution-led. They distribute their products across the value chain in order to reach the end consumers. Most(90%+) of the business is recurring in nature (also called run-rate business), done with the same partners, who place orders at fixed periods when their inventory depletes. Partners.
All functions inside a business are equal, but some functions are more equal than others. Examples are sales and marketing, which are the lifelines of any business, contributing directly to the top line, finding and serving new and existing customers constantly, and giving life to every other function inside a business. It is essential that sales and marketing have the tools they need to keep the wheels of business in motion. An increase in the productivity of sales and marketing driven by useful tools can have desirable results on revenue, which is the second-most important metric for most shareholders (the first being Profit).
A very important tool in the hands of the sales and marketing teams is the CRM (customer relationship management, and related suite of products). CRM helps these teams to store and manage customer information (master data like contact details) and related transactions (data like orders, invoices, payments, etc, which come from the ERP or accounting systems). However, most traditional CRMs fail to serve distribution-led companies’ sales and marketing teams.
Most traditional CRMs are designed for project businesses (exactly opposite to run-rate businesses). They have standard objects like Organisations, Contacts, Leads, Opportunities, etc, which are not designed keeping the requirement of run-rate businesses in mind. Hence when distribution-led businesses buy these CRMs, they need to heavily customize them to make them useful. This significantly increases the project budget and reduces ROI. Customizations also make the software prone to technical glitches which hamper the user experience and lead to errors (and bills for change requests).
Sales and marketing teams at distribution-led companies need a CRM that can help them motivate and enable their channel partners to sell more. Rather than being Lead and Opportunity led, they should be business targets and metrics-led. The CRM should not be just an internal tool for entering data and generating reports, it should be a tool where sales and marketing teams can collaborate with channel partners and help channel partners with the visibility they need to do their business better. Partners should be able to see their data and communicate their challenges via robust feedback or ticketing mechanism. While all this happens, the cost (both software licenses and implementation) should not be prohibitive. A user-based licensing fee that traditional CRMs charge is very prohibitive for most companies since they have thousands of distributors that need access to information. Giving all of them a license would be detrimental to project ROI.
The need of the hour is a channel sales and marketing CRM that focuses on run rate business and its complexities – managing channel partner master and transaction data, marketing new products to channel partners, communicating information about the latest schemes and programs to channel partners along with progress on existing programs channel partners have enrolled themselves in. If you are looking for a channel sales management tool that can make your channel execution 10x easier, write to us at email@example.com or CONTACT US here.