The 6 Major Challenges of Channel Sales

1. Conflicts of Interest

The Challenge: You and your partners may not be direct competitors, but there’s still overlap. You’re most likely in the same industry, targeting the same customers. This can cause uncomfortable situations. One of the most common issues occurs over the integrity of pricing. Depending on your industry, customers will price-shop and unintentionally pit the sellers against each other.

 

The Solution: Have open, honest communication with your partners. It’s always best to be an ally to your channel team and be transparent. Undercutting your partner or pulling a fast one could sour the relationship permanently. It might be worth it to take a hit on pricing for one deal versus compromising the relationship.

Want to Learn More?

Input your information here to receive full access to the article.

2. Organization

The Challenge: Sales organizations have CRM systems and established ways to collect data. However, it’s difficult for CRM alone to track channel sales. Partner sales data is usually inaccurate and scattered. Not having a unified portal for partner sales causes issues in the following areas:

  1. Lead distribution: Many organizations still use spreadsheets to distribute and track leads. Old-school ways of organizing this data can result in overlooked leads and inadequate follow-up.
  2. Market Development Funds (MDFs): MDFs can go to waste if you don’t track them accurately. Without proper planning, MDFs get abused or allocated to the wrong partners. Without precise tracking, it’s impossible to know which MDF activities deliver the most ROI.
  3. Marketing materials: Marketing materials can be challenging to keep track of. Too often, they never even make it into the hands of your partners. Customizations required by partners can become time-consuming and inefficient. Your branding and messaging can lose potency as it travels through the channel.
  4. Revenue tracking: Unlike a direct sales team, it can be hard to track revenue and other channel metrics. CRMs alone do not adequately track all the stages of the partner sales cycle.

The Solution: Implementing an automated system solves organization problems. For channel sales, the best option is a partner relationship management system (PRM). Look for a PRM tool that automates lead distribution, marketing, and metrics tracking.

 

3. Channel Partner Conflict

The Challenge: Conflicts in channel partners can result in weakened relationships. Conflicts usually arise over poached deals, an occurrence which can happen between competing partners, as well as between direct sales teams and their partners.

The Solution: A solid deal registration process provides visibility that can level the playing field when you have several competing partners.

 

4. Partner Performance

The Challenge: Figuring out what drives partner performance can be tricky yet important. It’s challenging to motivate partners unless you understand how they’re compensated and what motivates them.

The Solution: Test out different incentive programs such as SPIFFs and MDFs. Carefully track the results of your partners’ efforts to see where you get the most ROI. Proper communication comes into play here as well. The more time you spend with partners, the better you’ll understand how to incentivize them best. For further ideas, read our article about channel incentive best practices.

 

5. Staying Top of Mind

The Challenge: Partners can be distracted by the many different products they’re able to sell. If your partners have an extensive offering, they may be reactive sellers who rely on the customer to drive demand for the product instead of proactively spreading the word. In these scenarios, it’s easy for your product to get lost in the shuffle.

The Solution: Show your partners more attention. Have a cadence of trainings, lunches, and incentive programs to remind them of your brand. With partners, the squeaky wheel gets the grease. The more time and resources you invest in partners, the better returns you’ll see.

 

6. Virtual Communication

The Challenge: A natural challenge of channel sales is communication. Communication is challenging even when you work in the same office, let alone collaborating virtually. This causes additional strain on the way we connect with one another.

The Solution: Utilize remote conferencing tools like Zoom to connect to partners face-to-face, virtually. Being able to connect a name to a face and see facial expressions alleviates the awkward or uncomfortable stage in getting to know a partner. Bonus: there is no commute time when your meeting is on Zoom!

 

Bottom Line.

Partner channels are a great way to grow your business and generate revenue, but it’s not without its challenges. Working through relational issues requires proper communication, investment of time, and strategic resources. Performance must be tracked, and joint marketing campaigns shouldn’t be difficult to create. The most common issues in channel management can be managed with a well-thought-out plan.