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Introducing Partner Relationship Management (PRM)
by Stephen M. Dent


In this difficult economy, companies are looking for tools that can help them retain the loyalty -- and business -- of their customers. Customer Relationship Management (CRM) is one such tool that's received a lot of attention recently.

I believe that businesses and organizations could benefit even more from Partner Relationship Management (PRM), a true and proven approach to managing business relationships, not just with your important customers, but also with your suppliers, outsourcing partners, and business alliances.


Despite the word "relationship" in its name, CRM is not really concerned with managing customer relationships, but with managing data about a customer's buying habits and preferences. CRM emphasizes collecting information about the personal preferences of customers in order to create customer profiles. Business then uses these profiles to market directly to individual customers.

I'm not suggesting this approach is bad. Take, for example -- a business that I shop at frequently. does such a good job of managing my buying habits that as soon as I click on the site, it offers me books, CDs, and other items it believes I'll want to buy -- or, at least, be interested in buying -- based on my earlier purchases.

Of course, doesn't really care about its "relationship" with me. What it wants is another transaction from me. That's the whole objective of CRM: to generate another sale. Sometimes's marketing to me is right on target. But more often than not, my interests have changed and I'm looking for something new and different.

Do I feel loved by No, I feel tracked. But that's okay. It's smart business to understand your customers' individual preferences and then to use that information to cater to their desires. Now that we have the technology to manage our customers in such a way, why shouldn't we use it?

But don't be fooled into thinking that CRM is "relationship management." What kinds of relationships does CRM refer to? What exactly is being managed? From my vantage point, CRM is not about relationships at all. It's about collecting and understanding information about the buying habits and needs of customers. Period.

Building Real Relationships

Partner Relationship Management, on the other hand, is about relationships. It's about understanding the needs of your business partners and satisfying those needs to the best of your ability -- while building trust between you. PRM, therefore, is much more complex than collecting data.

PRM is not, however, the "partner programs" that are so highly touted today by many companies, particularly high-tech companies. Often, these strategies are even called Partner Relationship Management. Like CRM strategies, partner programs are essentially information-tracking systems that help organize and report on what a company's partners are doing in the marketplace.

With PRM, you must learn to communicate with your partner, using your self-disclosure skills to articulate your needs. You must know your personal trust strategies and then share those with your partner. You must build agreements that are mutually beneficial while working through the conflict that collaboration, by its very nature, causes.

PRM also challenges you to change and focus on the future so you don't continually dwell on past glories and stay stagnant. It links your future with that of someone else -- in a positive and exciting way.

Critical Skills in a Global Economy

PRM is especially important today as businesses become more global and interdependent. With interdependence comes a greater need for trust. Look, for example, at the call-center industry. American businesses have formed alliances with partners in India, Africa, and other far-flung places to hire thousands of call-center workers to satisfy American and worldwide consumer demands. Such alliances require a high degree of partnering intelligence. Unless trusting and mutually beneficial alliances can be established and managed, the high level of investments being made by these and other businesses will be squandered.

To truly manage such business relationships, companies must have in place a PRM program. Only with such a program can they develop mutually trusting and beneficial partnerships.

To learn about how Partnership Continuum, Inc., can equip you and your organization with the processes and skills that will enable you to successfully implement a PRM program, visit: .


The Author


Stephen M. Dent is founder of Partnership Continuum, Inc., a leadership coach, and author of books, automated online assessments, and other tools that build more effective relationships at or at +1.612.375.0323.

Many more articles in Partnering & Alliances in The CEO Refresher Archives
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Copyright 2003 by Stephen M. Dent. All rights reserved.

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