Even for the most channel-centric companies, partner conflict is inevitable. Conflict can occur for various reasons such as pricing, poor communication, or even deals poached by the direct sales team. By being proactive, you can take steps to avoid these issues.
To increase channel sales, it’s vital to keep your product top of mind with your partners. Depending on the industry, your partner may be selling hundreds, if not thousands, of other products. So what can you do to increase “mindshare” with your partners so that they prioritize you?
In competitive industries like IT and software, partners rely on trust and loyalty. The partner they trust the most is usually the partner they do the most business with. Channel managers are often the “face” of their organization within channel relationships. If mishandled, a channel manager’s decisions during partner conflicts can have dire consequences.
There are two sides to resolving channel conflict:
- One is the logistical side: access to information and ease of selling your product.
- The other is the relational piece: conflict resolution and building strong partnerships. The following tips will show you how to handle both.
1. Show investment in your partners
Let’s face it. As a channel manager, you’ll eventually let your partners down. As with all healthy relationships, conflicts are natural and should serve to make the relationship stronger. To mitigate hurt feelings, prove to your partners that you’re investing in them.
If your partner feels that you’re on their team and want them to succeed, they’ll be more understanding and open minded towards your strategy to resolve the channel conflict. Are you paying adequate attention to your partner? How often do you check in with them, update them, come to them with new leads? This brings us to tip #2, which is to invest in the right partner portal.
2. Think through a solid communication strategy
Efficient communication is the bedrock of your relationships with partners. By being transparent about goals and expectations, you’ll avoid confusion around performance expectations. By training and equipping them with the proper tools, you increase their confidence.
Channel partners should have access to updated, co-branded marketing materials at all times. With several other products in their arsenal, your channel may not be able to pitch your product adequately. This is where having the right sales collateral comes in to bridge the gap. With easy access to marketing materials, there’s a higher chance of hooking the customer during meetings.
Your channel partners don’t have the benefit of in-house employees. Being outside of your company prevents them from receiving consistent training and motivation. By investing in partner training, they’ll be more prepared. The training process improves their overall understanding your products and strategies, helping to avoid common sources of channel conflict and strengthen the relationship.
After you’ve invested in your partners, it’s important to track your results. By gathering data, you’ll be able to determine if your partners are meeting your KPI’s. By analyzing these stats, you can determine who needs more coaching or market development funds.
3. Create a solid, yet dynamic deal registration process.
Your deal registration process is where your partner relationships solidify. Its rules can either help or hinder your reputation with the channel. A deal registration process outlines how your partners should do business with you.
Deal registration rules of engagement depend on the customer’s buying process. When the end customer entertains more than one partner at a time, you’ll most likely have a “first come first serve ” rule. Having all partners utilize a PRM platform can make clear the originator of a lead, avoiding a common source of channel conflict.
While there can be exceptions to these rules, best practices do exist for creating your deal registration process:
Incentives for registration
Most deal registration programs provide competitive pricing and added support. This is the main motivator for partners to register deals in the first place. Joint sales efforts such as communication and collaboration will live in your PRM. An example of this is Allbound’s unified pipeline feature. You and your partner need to keep each other up to date on every stage of the deal.
Deal registration is rarely cut and dry, but partners need to view your rules as fair. When two partners are competing for the same customer, deal registration can be awarded to whoever is furthest along. This could mean providing proof of an on-site customer visit or demo of the product.
Implementing a partner relationship management system (PRM) makes deal registration easier. Partners will be able to log deals in the system with date stamps and records of changes. Having these records in one place creates accountability. It also allows channel managers to see the facts with their own eyes so that they can decide between the two channel partners, finding conflict resolution more likely to be seen as fair by both parties.
Deal visibility is important, especially for forecasting. Update opportunities in real-time so reps can take necessary action to close deals. Being able to see deal progression is especially important for newer companies. Sales leadership uses this data to understand the channel sales cycle as a whole.
4. Keep the focus on the customer
In uncomfortable clashes between two partners, it’s easy to lose sight of the customer. Unfortunately, channel conflict can have potential negative consequences on your end-customers. This can include customers not getting the best price or delayed orders.
Despite both sides of the partnership wanting to close the deal, the customer comes first. Sometimes you’ll need to remind your partners of this. Communicating this can prevent hurt feelings.
5. Limit the number of channel partners to better avoid conflict
This strategy is last because it may not apply to all industries. For software and technology companies, reducing the number of channel partners creates exclusivity. It also motivates your partners to invest their time and energy into you. Plus, having less known competitors reduces the frequency of channel conflicts.
To reduce channel conflict, prevention is key. Cohesive communication and tangible investments in your partnerships make them stronger. Creating fair rules and processes offer clean resolutions and prevents partner conflicts from turning ugly. Forethought goes a long way when it comes to creating long-lasting, profitable partnerships.