Under huge pressure to compete in a crowded marketplace, the challenge for consumer electronic companies is to develop leading-edge products that appeal to increasingly discerning customers. It is also to effectively dovetail communications with partners in order to drive footfall into retail stores and create a satisfying shopping experience. One that will result in sales and repeat business. The trouble is that although these companies have invested in software solutions to help them increase productivity, improve customer engagement and/or realise cost savings, a significant number still remain in the dark when it comes to accurately tracking indirect sales data.
Businesses that sell through third party channels obviously need to get the right products to the right store, at the right time. Yet many don’t have a full picture of the distribution chain once products have left the warehouse, let alone know if they are managing sales partner networks in the most efficient way. They need immediate access to information to respond to customer demands and equally to react to market conditions. Lack of transparency between parties, around channel data, is an enormous problem. Whilst companies are well aware that they need to tighten links with supply and sales chains, getting information about what has been sold – so decisions can be made about what needs to be re-ordered or even manufactured – is often an uphill struggle. Errors in the information provided can also be extremely costly as a result. Although they have been used to working ‘one step removed’ from the customer, the problems they are encountering with channel data growth will only get worse. The proportion of total indirect sales has been acknowledged by most to continue to rise over the next two years.
For Bose, there was a gap in the supporting details to show how new products launches had been received, whilst sales managers also now demanded centralised reports beyond the internal reports that were typically collected on an ad-hoc and individual basis. It was important that Bose worked closely with its channel to get their agreement to share intellectual property via a central reporting system. Time and resources on both sides were valuable and it would be capturing even the finest details that would determine the longer-term success of the initiative.
Since CDM implementation, Bose reports that product launches are managed more effectively, and the allocation of deliveries, when we have limited stock, is far more controlled. Decisions are now made on statistical sales evidence rather than simply the size of the reseller, or when the order was placed. Furthermore, marketing analysis can also be completed in more detail, whilst almost real-time data sets substantiate the reports and proposals that are shared at executive level.
Benefits have also been seen in other areas of the business. Rebates and incentives are managed more effectively; top level data is used in quarterly business reviews and shared with executives as part of a wider channel report.
The importance of trust
Unfortunately, this is far from the norm. The Channel Data Management Barometer report in 2017 (an independent survey by completed by Zyme) showed that more than half (52 perc ent) of the 166 organisations interviewed had to simply ‘trust’ that the information channel partners had provided about sales was accurate. Without such access to accurate channel data, consumer electronics companies and other businesses that sell through the channel will therefore tend to err on the side of caution when it comes to partner payments. Either over-paying incentives and rewards to some, or leading to others missing out. In addition, 93 per cent of respondents said that they treat incentive payments as a cost of doing business, rather than seeing them as an investment to manage longer term return. This is obviously not how they were intended to be used and the end result is that the lack of control and visibility here has resulted in 61 per cent of companies admitting that, in the last 12 months, financial rewards for the channel have had to be capped because of previous over payments made in error. What’s more, poor channel data makes it harder to manage inventory, which in turn makes it difficult for vendors to keep operating costs at a competitive level. It also represents a significant missed opportunity to work with the channel to create, and deliver, a positive shopping experience that builds customer loyalty.
It is clearly less than ideal to run a business on insufficient or incomplete data so it is not surprising that board members and stakeholders are no longer prepared to simply trust that channel-submitted data is deemed to be ‘good enough’. The fact that 43 per cent of interviewees confessed they had shared data with the Board in which they were not completely confident is not a glowing endorsement that systems are in fact ‘good enough’. For 42 per cent to admit that inventory tolerance levels were based on inaccurate data is also not commercially viable. It’s unacceptable that 80 per cent of respondents felt commercial opportunities had been lost because of limitations in their ability to collect, collate and analyse channel data. For only 19 per cent of companies to be confident that they had a 360-degree view on inventory at all times is hugely disappointing.
It is a logical step forward for consumer electronics companies to want to put granular level transactional data, and complete visibility into channel sales, at the top of the agenda in 2018. The goal must be on reducing errors and improving the entire channel data management process. Momentum is undoubtedly building behind the move to deliver greater automation and there will no doubt be continued investment in solutions that enable vendors to improve data accuracy by seamlessly collecting, cleansing and curating channel data.
This is where an end-to-end Channel Data Management (CDM) platform can make a real difference. A platform that can deliver much needed visibility by automatically taking the partner’s raw sales data, identifying the most important information and presenting it through analytics dashboards integrated into the vendor’s own business systems. Automating as much of the process as possible will save time and costs on both sides of the sales function, and enables close to real-time data sharing to become a reality. It essentially turns data into a live dialogue that all parties can benefit from.
Using CDM to process millions of transactions to validate, calculate and manage incentive payouts for a wide range of incentive programmes – from Marketing Development Funds (MDF) and co-op funds, to deal registrations, referrals and others – will be a huge bonus for many, bringing almost instant ROI. More than $1 trillion is estimated to be spent by high-tech companies on MDF and rebates for channel partners, in an effort to increase sales in targeted geographies. However, a recent SiriusDecisions survey (The Pulse: The State of Channel Partner Incentives 2016) reported that 42 per cent of respondents were only able to measure incentive performance at a partner type/tier level, and just 16 per cent could measure incentives at a geographical/regional/country level. Harnessing big data technologies to tackle this issue is the obvious solution. It should help vendors to target partners with the right programmes and incentives, eliminating demotivating delays caused by failing manual processes. If you can increase partner participation, while decreasing costly overpayments, it’s a huge win-win.
Decision grade data should also contribute to overall business growth next year. It will enable vendors to put much greater focus on profiling and segmenting channel partners, on the basis of growth potential as much as earnings to date, whilst also being more focused around delivering training and incentives programmes relevant to business goals. This will not only provide more detailed levels of understanding of which partners are most profitable or core to the business but it will also – importantly – identify those that are not. It will make it easier to separate those that are delivering a good return on investment (ROI) in relation to both the MDF funds allocated to them, and the success of marketing initiatives overall. It could increase insights of ‘fledging’ accounts that have the most potential for growth.
At a time when competition for partner loyalty, energy and focus is at an all-time high, and despite all the challenges relating to channel data accuracy and visibility, it’s reassuring to know that 78 per cent of the survey’s respondents actively wanted to understand more about channel partners and channel marketing expenditure. There is no room for complacency on the part of vendor and there is a readiness to address the issues relating to services-based sales data.
That really is good news. Because whether a business is shifting boxes or offering cloud services consultancy, delivering actionable insights really does lead to a more accurate view of the sales channel. Pressure to improve margins, and create a more productive sales force, becomes more of science with justifying data to support it, rather than simply a goodwill message of support. Channel partners increasingly expect to receive a tailored and highly personalised working relationship with vendors, and for all their efforts this is understandable. By sharing a platform that can improve the way in which both sides work together to secure sales, and build compelling and measurable reward programmes, has to be the best way forward.
Nick Andrews, General Manager EMEA and India, E2open
- US stocks flat after early gains on retail sales data
- Harnessing the power of data by visualization
- Facebook user data is publicly offered in Vietnam
- June's auto sales continue to dip: VAMA
- Requiring data to stay on retail track
- AI and Big Data at ICAEW 2018 Regional Thought Leadership Roadshow
- Data analytics and artificial intelligence boost business operations
- Global markets wrap up: Asia slips on weaker Wall St, soft China data; dollar steady
- Amazon sales surge, but spending bites into profit
- Facebook corners global advertising by selling user data?
- Vietnam plans more share sale from dairy giant Vinamilk: official
- Fitbit leads wearables, Apple Watch sales slip: Survey
- VAMM reported rising sales in first half of 2017
- Antibiotics sales in Vietnam double over 9 years, exacerbate superbug epidemic
- Guidance of indirect investment abroad
- Saigon bourse provides real-time data of foreign investor movements
- PetroVietnam denies bleeding red ink on crude oil sales to China
- Hackers selling stolen Twitter log-in data
- HCM City Real Estate Market: Indirect Discount for Apartments
- Ford Fusion autonomous research vehicles use LiDAR sensor technology to see in the dark
Companies in the dark with indirect sales data have 1710 words, post on www.itproportal.com at January 7, 2018. This is cached page on Europe Breaking News. If you want remove this page, please contact us.