by Mukund Ramaratnam, VP Strategic Sales at Zyme
Until recently, in order to understand customer buying behaviour and patterns, product companies relied primarily on data collected either from their own internal sales, financial or technical support applications or market research firms. ERP systems and BI tools used by most vendors, however, tend to overlook a critical gap, namely intelligence from the indirect channel; this business critical data is typically captured in a manual process which not only increased the risk of error but also led to inadequate analysis and therefore, false conclusions. Market research data, on the other hand, is not granular, comprehensive or timely enough to make daily or weekly operational decisions.
Today however, for the global brands that put $5 trillion dollars’ worth of goods and services into the hands of global distributors, resellers, retailers and VARs every year, the ability to gather this third party sales feedback from the channel is now critical to future success. Listening to the channel is yet another way to gather customer insight, and address some of the intelligence gaps that have been a challenge for product companies.
Dr. Andrew R Thomas summarised the scale of the issue in getting this type of data capture wrong in his book The Customer Trap: “This results in billions of dollars that go into the channel completely untracked, not to mention missed opportunities for more effective, quantifiable sales and marketing initiatives.”
A 2015 market research study, commissioned by Zyme and entitled “The UK Channel Data Management Barometer” told us that just 25% of respondents were extremely confident in the accuracy of data received from channel partners, whilst a shocking 66% claimed that their understanding of channel performance is held back by the accuracy of the data delivered by partners.
In parallel, the respondents cited that they also struggle with dealing with disparate data sources (90%) and different formats (67%), alongside timeliness of getting data from partners (70%). In turn, these problems then also lead to challenges with compliance and/or regulation (83%), as well as preventing the business from gaining a single, strategic, view across all channels (74%). Scalability issues (73%) and challenges with creating actionable insights from channel data (72%) were also mentioned as hurdles that needed to be overcome.
From all this comes a low level of confidence about data integrity, which will have a direct impact on the ability to assess the success or failure of marketing campaigns and incentives, and improve them accordingly.
Inaccurate data risks misleading sales opportunities. Ensuring accurate and up to date channel data is not only critical for financial transparency but also to improve the customer experience overall. If a customer has an enjoyable, and efficient, buying experience they are more likely to develop a loyalty to the brand that delivered it. So companies need to address this urgently before data loads increase further, both in volume and in complexity.
The solution lies in supplementing CRM, ERP and PRM systems with a direct partner interface in the form of a Channel Data Management (CDM) solution that automates the collection of unstructured channel reports in dozens of languages from partners all over the world. A CDM solution also corrects inaccuracies in sell-through reports (end user, geography, SKU information) using master data files and proven algorithms to ensure compliance and accuracy. Dashboard analytics enables users to visualize large volumes of data for better business decision making. In addition, it enables them to track the strength of their brand online, in almost real time, against their closest competitors. This element of digital intelligence brings with it other compelling business benefits.
“The Consumer Technology Digital Intelligence Report”, published earlier this year states that 73% of consumer technology and hardware companies believe getting digital intelligence right will positively impact their ability to achieve customer focused goals in the next 12 months, and gaining insight here is timely. Two thirds (67%) say they are already under pressure from the business and its stakeholders to understand more details on end-customer behaviour in order to improve online sales, and align marketing priorities accordingly.
Embracing digital intelligence will be critical to those businesses that want to maintain a reputable profile online. In the early stages success for a business is often about growing awareness but in the longer term it is much more about identifying sustainable growth opportunities. Without a detailed, trustworthy view on the performance of distribution and retail channels, it is almost impossible to plan effective support of retail partners – and if these retailers do not feel connected to you as a business partner, can they really also be expected to successfully promote your brand to the customer? In today’s hyper-competitive environment, can brands really afford not to implement world-class CDM solutions to enable data-driven decisions and gain comprehensive customer insight?