POS Data – What is it, How to collect it and What to do with it?
In part one of this series on channel data, we took a broad look at the need for a Channel Data Strategy and explored where the responsibility for this lay. Although traditionally data was the domain of technology teams, increasingly the LOB function (in this case the Channel Lead) who understands the need for detailed data, dictates this purchase. However, as the devil is in the detail – the collection, automation and reporting of POS Data will likely be delegated. As such, we’re going to take a deeper look at what data is required; how to collect it; and then what to do with it.
What is POS Data
Point of Sale Data (POS data) is information about a sale to a customer which records who sold what to whom and at what price. In addition, and more importantly, it includes what claims are due to all intermediaries. That is in terms of rebates, discounts or incentives. This enables the vendor to calculate the partner’s performance metrics (both reseller and distributor). As a result, the vendor can manage that partner accordingly. However, in the channel, there is a myriad of additional complexities. These include partner type, level and eligibility. All of which need to be mapped against the partner goals and objectives as well as the program goals and objectives of selling that product. In essence, if it is a spreadsheet, it’s a messy one!
Traditionally, this was a combination effort. The partner team and an analyst would capture the data in huge spreadsheets. But with the recent loss of 15,000 Covid tests because the spreadsheet became too large, we all know the risks associated with spreadsheet size!
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How do you collect POS Data?
Luckily, the emergence of incentive technology, which collects and organizes channel partner data, has become more prevalent. Although some vendors are still using spreadsheets even if they don’t like to admit it! Recording and capturing this POS data provides a direct line of understanding and communication between the partner’s activity and the vendor, even with multiple layers in between, such as distribution.
POS data reporting should standardize the data collection and input from different outlets such as different distributors, in different regions, using different tools and data formats. Quality also needs to be checked to identify inaccuracies or anomalies. And finally, a workflow and data management process established that allows for any inaccuracies to be easily corrected. Since this data is to be mapped to the vendor PRM and reported in a dashboard to partners, ensuring the right partner is identified and credited is essential.
Automating the collection, correction, and correlation to a vendor PRM is a tough ask. But it influences how partners will perceive the vendor and trust their systems and processes. Most importantly, it determines how partners receive their compensation. It will also influence other partner metrics such as net new customers which may contribute to a partner’s level in the partner program and their status as well as financial reimbursements.
Standardizing the Input
The key to this often messy process is standardizing the input into a single format. This data can then be fed into an automation workflow to check part numbers, quantities, names, contacts, ID numbers, etc. Next you will need to ratify and ensure quality of data before mapping to predefined fields in the PRM to expose the results in a dashboard to all concerned. At this stage, the data is ready to allow claims and provide key insight for business planning.
- Vendors pay what is due on confirmed sales
- Partners can see how close they are to targets and what they need to do to get there. This will have a positive influence on behavior
- An understanding of who is responding to what promotions
- Easier management of expectations, and the “Scorecard”
- Data-driven decisions from both the vendor and the partner
Now you have the POS Data – What to do with it?
Once you have POS data, you will need the ability to flex the promotion or incentive to reflect the responses you are seeing in real-time. Tracking and measuring your POS data against program goals gives you the visibility you need to fine-tune your incentives, if your systems allow in a timely manner.
This can have a huge impact on the bottom line. You can reward certain behavior (eg. net new customers) rather than paying out on deals the partner would have closed anyway. For example renewals. Although, you may want to put an incentive on retention and renewal business. But the real joy is that you have that capability once you can see the reaction and response to what is in play.
Channel incentives can be both performance-based or used to drive loyalty and behavior. Examples include; more demo’s or adding more deals to the deal registration portal. And in this increasingly digital world, perhaps reward the use of sales and marketing tools that you know work.
A good PRM will track the digital downloads and use of content and tools. But by adding a calculation engine that captures POS data reflecting who is doing what in your channel, you have a real framework for success.