A channel information system is a valuable decision support system in the channel management. Channel information system has many advantages:
Effective Decision Making. A good CIS will have accurate data about different activities in the channel management. This data can be related to total sales, product sales, selling expenses in the different sales territories during different time periods. This information can be used by management in the effective decision making related to the marketing and sales activities like launch of new products, pricing strategies, sales promotions, selection of new channel partners, etc. The information from CIS can be used by the company to spot the changing trends in the market. The CIS will also help to keep a record of competitive actions so that the company can take the corrective actions in the timely manner.
Increased Sales Revenue. A company can increase its sales revenue with an effective use of channel information system. The CIS will help in the planning and forecasting of different selling opportunities in the different geographies. CIS also provides information about the different stock keeping unit (SKU)-wise product sales in the different sales territories and channel partners. Information from the CIS can be used in the segmentation and targeting of the channel partners. A company can also track the movement of different products and their availability with the channel partners. This will reduce the possibility of stock-outs also.
Inventory Management. CIS is an effective tool to manage the inventory at different levels in the supply chain. It will help in the right forecasting of sales. This will help to streamline the production plan, which will further lead to the reduction of distribution and production costs.
Customer Relationship Management. Customer relationship management (CRM) is a customer-centric business strategy to build and sustain a long-term business with customers. Also, CRM acts as a yardstick to reduce costs, enhance productivity, and eventually, improve business profitability. An integration of CIS and CRM solution will provide a dedicated platform for different business units to work together with their clients and realize all their needs and demands. It involves the holistic integration of all data points, thereby revealing real-time touch points of customer information. Companies can use the CIS data like purchasing cycle, payment history, financial strength, and product-wise sales in developing sales promotion plans for their channel partners. The information can also be used to track the primary sales, secondary sales, inventory, and pending payments of the channel member. It can also be used as a platform to collect feedback from the channel partners to develop the sales promotion plans.
Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.