Can you give me an ROI on a PRM System?

This is a question I get from about 1 in every 10 prospects. Its usually coming from their upper management (who I like to call: the economic buyer). The prospect is the person in charge of launching the channel program or has been recently hired to improve an existing channel program.

I actually thought questioning ROI on common systems was a thing of the past. I dont think anyone thinks of ROI any longer when it comes to things like accounting systems or CRM system or an email system or a central file storage system. These things are now taken for granted as necessary to run a business. Its not a question of if you need it. It a function of which system you chose and what you pay for the features you need.

Yet when it comes to the Channel, the poor channel manager gets push back on getting the tools she needs to run what is typically a major strategic component of the business.

Here is an email I sent to a prospect who was getting push back on implementing a PRM solution. Feel free to just copy and paste this into an email to your upper management…

Dear [insert name]

The hard thing about showing a gain in efficiency when going from manual to automated, is that there is no measurement of the manual process to compare against. You become measurable only when you have a system.

I can tell you we have a 98% open rate on distributed leads. Can you tell me what your current open rate is using email? Can you tell me what % of leads turn into registered deals? I bet to find that out, it would take you two weeks to assemble a report versus a real time dashboard. Not sure what that is worth to you in terms of $$$ but I think there is an ROI in simply knowing this.

What is your average partner deal size? How many of those do you think you lose each year because your partner either didn’t get the lead in his email or worse didn’t follow up on the lead and you had no visibility into it? Again not sure on the $$$ but preventing a lost deal probably has an ROI

What is the annual value of a partner? Do you know what their trends are an why? Again, it would likely take you a week or two to assemble this report in a spreadsheet. If you can’t measure it, you can’t improve it.

Per your example, I don’t know now many man hours are being spent distributing leads in your current model. Further I think even if we saved 10 or 20 man hours a week, it is wholly uncompelling. The real cost is the thing you cannot currently measure which is how many leads are being wasted by your current process. Leads cost money. Lost deals cost even more. Time costs deals. The real focus should be on opportunity cost.

So there are four factors of ROI when it comes to PRM.
1. Saving you and your team some time, doing more with less resources etc. You can decide if this is true or not and assign a value.
2. Making your partners more efficient. Will it result in more engaged partners? Will that result in an increase in deals? Again I can give you stats that say it happened for another company but that doesn’t mean it will have that impact on your channel. But look around. All of the big boys have PRM systems. They might be on to something!
3. Opportunity Cost. Are you missing deals. Again this is subjective and you have to believe the assumption that you may be. What is that cost and compare that to our systems cost.
4. What is the cost of having no measurement. I would suggest your whole channel program is at risk. Put a value on that.

I want to thank you for asking this question. I plan to make this my next blog post!

Best regards,

Jason