Consumers are always at the center point in any business landscape. The growing proliferation of technology has empowered them significantly. With better access to information and more options available than ever, consumers have become increasingly particular about their preferences. They know what they want and what not, and how it should be presented to them. Anything that falls short of their preference is rejected outright.
These challenges are being addressed by enterprises through salesforce automation, Customer Relationship Management (CRM) systems, and adoptions and integrations various modern technologies. The recent boom in data science and business intelligence (BI) has also been readily lapped up by companies in order to leverage data for the deeper insights. However, business requirements are evolving more rapidly than ever due to emerging channels and changing preference of consumers. Companies therefore often find their technology stack lacking some or the other tool that can be of advantage to them. Channel Data Management (CDM) is a great example of the same. While the significance of consumer data has received the right weightage from the business heads, second-party or third-party data has been elusive for enterprises to a considerable extent.
The need for CDM
While the focus on data is undoubtedly at an all-time high, businesses have not been able to harness all types of data that they have (or can have access to) including channel data. Technology vendors have been typically responsive, which led to the innovation of CDM solutions. CDM systems enable marketing and sales teams to have deeper and wider visibility into their indirect sales channels, that is, the business done by their network of resellers and distributors.
In the foreseeable, future Data can be expected to become more and more critical a factor in gaining competitive advantage. Therefore, businesses will be compelled to take into consideration even those data that they have been ignoring due to various constraints. With CDM systems being one of the latest entrants into the B2B technology landscape, technology heads at enterprises (big or small) need to know everything about the technology. It will help them to select the CDM platform that best suit their business requirement.
How is CDM helpful?
Enterprises have been traditionally handling indirect sales channels, such as resellers’ and partners’ business, using their own experience and anticipation. Although data has been used for the purpose, but that data is usually sourced informally from channel partners. The current situation is actually no one’s fault, as closing deals is more important than sales data for channel partners. Due to this, their typical passive approach towards sending sales data means that organizations usually get data monthly or quarterly rather than daily or weekly. Hence, the insights they derive from the data are based on the past performance rather than the current.
As a result of this, manufacturers who have built a more complex network pf dealers and distributors have not been able to have deeper visibility into their indirect channels. Getting accurate data in a timely manner has been among the biggest challenges that manufacturers have faced with channel management. The rapidly-changing sales environment has been worsening the situation. Their lack of understanding of their customers due to poor visibility into their inventory and sales channels is further compounded by inaccurate partner incentive and sales compensation models. Moreover, most business organizations focus on the top-performing resellers, and thereby neglect the scope of increase in sales potential resellers offer.
CDM harnesses the advancements in the cloud technology and analytics in order to address these challenges. These innovations make data collection and reporting easier in today’s global environment. Hence, CDM systems are capable of delivering dynamic insights and information in real time, thereby facilitating more insightful and high-prospect decision making.
CDM systems aggregate in-depth and more accurate data from the entire chain of sales channels, rather than concentrating on just the best-performing resellers. As a result, it enables manufacturers to identify elusive opportunities of increasing sales. It also enables them to better understand where marketing programs and incentive programs are yielding the best results. It is especially advantageous in emerging markets, which typically offer poorest visibility.
CDM platforms enable manufacturing companies to keep track of information on consumers who have bought or are buying their products. With this information at their disposal, they can improve their product development, market segmentation as well as promotional campaigns. The robust and granular data collection and standardization capability of CDM tools make it possible for companies to accumulate both reseller-level and store-level data. It is this collection of data that offers real-time product information to companies, enabling them to optimize inventory and avoid inventory write-offs stock-outs.
Features to look for in a CDM System
Like any other technology innovation, businesses must know what to expect from the solution before purchasing it. If the significance of leveraging channel data rang a bell in the mind, rushing to get a CDM system on board would not help. All technology vendors will claim that their offering is the best and provides the widest range of services. However, enterprises need to be well aware of what to look for in a CDM platform. A few things are highlighted hereunder:
- First-party and third-party content: The CDM platform should feature a global directory of customers and partners to facilitate accurate identification of customers and partners, and assigning transaction to them. The inclusion of third-party content adds geographic and demographic aspects to the data analysis.
- Data validation: One of the most critical requirements that CDM systems should fulfill is rigorous validation of both field-level and file-level data on the basis of predefined business rules and standard data model. It is necessity to maintain accuracy and completeness, which are essential for effective consolidation and analysis of data.
- Robust analytics: Availability of data matters less if the solution does not have analytic capabilities. The pre-built analytics feature of the CDM solution should incorporate best practices in channel management in order to enable companies to manage their channels better through innovative metrics.
- Security: This point probably does not need to be elaborated. A good CDM system should provide satisfactory and uncompromising security system, which should have been audited and documented well. In addition and equally importantly, the solution should offer assured disaster recovery. It should therefore be regularly assessed, tested and backed-up.
- Flexible data transfer: A good CDM solution should support multiple data formats to provide flexibility in partner connectivity. In addition to supporting all popular formats such as Excel, RosettNet, EDI and flat files, the platform should also allow transfer in preferred protocol rather a particular one. This flexibility is crucial for partner adoption and ensures that marketing and sales teams have full range of data rather than that of only the top performers.
- Partner compliance: Partner compliance has to be the top priority for any CDM platform, along with recommendations on data reporting best practices for contracts. Also, it should have a proven methodology for partner compliance tracking and improvement in terms of completeness, timeliness and quality of data.
- Unrestricted scalability: Companies should opt CDM systems that have cloud-based multi-tenant architecture, and does negatively affect users when new customers are added to it.
- SLA: There should a clear and rigorous service level agreement (SLA).
- High-end performance: Another critical requirement that does not need to be elaborated. Obviously, best-performing solutions should be the most preferable choices for companies.
- Worldwide reach: Worldwide reach is obviously essential for a CDM platform to be useful.
Scope of CDM
Although a CDM system may seem directly related to only marketing and sales teams, once it is deployed and is fully functional, various teams can benefit from the data. Channel data helps finance team to estimate reserves and recognize revenue, while supply chain team needs it for inventory management optimization. The data from that same CDM platform ensures timely renewal of service contracts. In short, the scope of CDM system utility is wide and just limited to marketing and sales practices. The IT department of an organization that is going to adopt a CDM platform should chalk out a plan in advance for providing access to data to finance, risk and compliance, supply chain, and other teams that may require channel data.