• Channel Data Management is the Real Problem with the Channel

    Many organizations that sell through distributors have failed to find out until it is too late, that the quality of channel POS data effects all downstream reporting, and decision-making processes. This can harm channel relationships; reduce partner loyalty, channel growth and revenue. It’s time to admit that Channel Data Management is a problem and we need to look into more efficient ways to turn channel data into “channel intelligence”.

    How do manufacturers, distributors & resellers deal with this problem?

    Many organizations have tried to put expensive band-aids on the symptoms instead of solving the problem. They buy solutions hoping to gain better insight into why revenue leaks are occurring with rebates, ship & debit, sales compensation and incentives, not to mention increasing grey market activity. Some companies prefer to build data-warehouses and then buy reporting tools that promise to give them a better view into their channel data. But even with these tools, many companies are still searching for clarity and trying to stop bleeding revenues caused by bad, delayed or incomplete channel data. In reality, these tools simply do not give them a complete or accurate view into their channel because the tools don’t change the quality of the data.

    What’s the real problem with channel data management?

    In many instances, the real problem is simply bad channel data. Distributors and partners are often inconsistent in reporting their POS or inventory data to their partners. Additionally, they report data in many different formats (i.e., email, spreadsheet, FTP, or EDI files) that often require extensive manual processes to cleanse, enrich, validate, and normalize before the data can be used. Even companies that hire 3rd party BPOs are at risk because many of those companies also process the data manually. And we all know that manually processed data is often rife with mistakes and once the data is processed (inclusive of undetected errors), it gets loaded into systems that feed downstream processes and analytics. And these are the very systems that channel executives and managers rely on to make crucial business decisions and determine partner payments, discounts and incentives.

    According to a recent article in the Wall Street Journal, close to 90% of all spreadsheets have errors. Add to this statistic the fact that manual processing of thousands or millions of lines of transactional POS data monthly only compounds the problem. Bad Data is what you are dealing with… Typical “Garbage In, Garbage Out” scenarios can run rampant, lack of data integrity ensues and subsequent errors may not be caught for months, if ever.  Loading error-ridden POS and inventory data into your CRM system is not only dangerous, but can cause major revenue leaks in your downstream processes such as: over/under-reported inventory, double-counted rebates, over/under-paid commissions or incentives, and a lot more. All of which will cost you business, erode partner loyalty and decrease ROI. It’s been said that data quality issues can cost between 10% to 25% of an organizations revenue and that’s a big chuck of change if you ask me.

    If accurate channel POS data is a challenge, what can you do about it?

    Spend the time and money upfront to ensure that your channel data is correct because it will save you hundreds of thousands on the back end. Bad data problems can be easily be fixed by A) defining what channel data you need visibility to and B) ensuring that your data is cleansed, normalized, de-duped and enriched BEFORE integrating it into YOUR CRM system and potentially polluting downstream applications. According to MelissaData, the benefits of maintaining high data quality allows organizations to control and reduce operational expenses by up to 56%, improve customer satisfaction by 57% and increase revenues by 30%.

    As the amount of data available in the world continues to grow, the quality of your data will become even more important. Having real-time access to accurate channel data in a CRM system (such as Salesforce) will be critical to making timely decisions for your channel business.

    Chris Nikas is Senior Sales Representative at Channelinsight.  For more information or to learn Best Practices for Channel Partner Data Collection, read our whitepaper or check out other Channelinsight Resources on our web site.

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