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Squash the Squabble: How to Manage Channel Conflict

Conflict, as anyone can attest to, is an unavoidable part of life. Differing opinions, competing interests, and opposing perspectives come up regularly in all types of relationships. Channel conflict is no different.

But if the conflict isn’t addressed correctly or proactively, it can quickly get out of hand. Unresolved issues between competing partners, or between direct sales teams and partners, can weaken the entire channel sales program over time.

One of the biggest sources of channel conflict is when partners, or sales teams, vie for the same prospect. Each has something to gain by closing the deal and ends up competing for the same opportunity within the same ecosystem.

While this scenario can potentially bring about some friendly competition, it’s important to prepare for any negative ramifications that can arise.

Fortunately, there are ways to manage these types of channel conflicts. Read on for ways to squash squabbles before they become insurmountable.

Why Does Channel Conflict Happen?

To aptly manage channel conflict, you need to first understand why it’s occurring. This will help determine whether the issues are a normal part of business or reflective of a deeper issue within your channel partner program.  

Broadly speaking, channel conflict refers to a disagreement between partners or a negative outcome of a particular action taken by a partner. 

This commonly occurs when:

  • Goals are not aligned
  • Tensions rise while competing for the same deal
  • Expectations about roles, responsibility, or rewards clash

For instance, channel conflict can happen when it’s unclear who can claim a new lead and multiple partners are interested in the opportunity. Without clear protocols, this can escalate into accusations of one partner “poaching” a deal from another or cause tension between a partner and a direct sales team. 

In another example, your channel partner may be confused about performance expectations and feel short-changed when their assumed compensation isn’t met. 

Or perhaps your direct sales team is able to offer discounts or more competitive incentives to prospects than partners can match. Inconsistency in pricing may not be on purpose, but it can cause lasting damage to partner trust. 

Not equipping partners with the proper tools they need to succeed – like training materials, lead tracking, or a deal registration process – can also lead to tension and misalignment that otherwise could have been prevented.

In almost all cases, poor communication is the underlying culprit to channel conflict.

Types of Channel Conflict That Can Occur in Your Partner Program

Understanding the root causes of channel conflict by itself isn’t always enough to come up with a strategy to smooth over ruffled partner feathers.

Think also about the type of conflict and who is involved before coming up with a solution to get it under control.

The different types of channel conflict include:

1) Vertical-level channel conflict

Problem: Two channel partners at different levels face challenges with one another. This could be a vendor “stealing” leads from partners.

Solution: One way to manage this conflict is through a lead registration system, where there is only one sales process for each lead.

2) Horizontal-level channel conflict

Problem: Two competing partners at the same level pursue the same lead, prospect, or deal.

Solution: One way to avoid this is by taking a look at your entire ecosystem and determining if there are too many similar channels going after the same audiences.  Avoid leaving partners feeling like they’re in competition with one another by diversifying your program.

3) Multichannel-level channel conflict

Problem: Multiple partners at different levels are selling to the same market, potentially giving one channel an unfair advantage from the onset.

Solution: Create assigned segments or adjust your incentivization so higher-level partners aren’t chasing leads lower-tier partners are working hard to pursue.

4) In-house versus partner channel conflict

Problem: Your direct sales team and partners are inadvertently competing with each other, rather than co-existing and supporting one another.

Solution: Make sure to have a solid, fair deal registration process in place that takes into account the originator of the lead. Create a set of guidelines regarding how partners should do business with you to get everyone on the same page before tensions rise. And make sure to regularly show investment in your partners to keep the relationship strong.  

What to Do When Conflict Does Arise

Knowing and doing can be two very separate things.

Understanding how and why conflict occurs can go a long way in preventing clashes, but it won’t always catch the problem in time. At the end of the day, partnerships are relationships and emotions can run high once in a while in all types of relationships.

When a conflict does arise, address it head on as soon as possible. Putting it off will only amplify the issue. Your ultimate goal in resolving the issue should be to maintain the relationship by fostering a sense of trust and fairness in your partner program.

As you strategize answers to specific issues, think about both sides of a solution:

  • The relational and emotional aspect: Make sure partners feel heard and respected during the resolution process, ultimately strengthening the relationship over time despite bumps in the road.
  • The logistical aspect: Figure out a way to prevent similar issues in the future by untangling what went wrong and coming up with a game plan moving forward.

The right solution will depend on your unique situation, but there are some commonalities that occur over and over again in the channel space.

Here are some management solutions for the most common conflicts:

Determine who gets that lead:

Set boundaries on which customers each partner is assigned to target, and set a continuous review schedule to ensure partners are adhering to your established guidelines. In most cases, that’s a “first come, first served” rule to deal registration.

Rely on hard, indisputable data to make it clear where a deal originated from, who can claim a lead and when it can be registered as a deal.

Shift your strategy to avoid overlaps:

Set terms for each partnership so expectations are created and communicated clearly early on.

For example, if there is a certain target audience your company is going after, let partners know it’s in the works. That way, they won’t pursue the same leads and wonder why they aren’t being incentivized.

Also, review your entire partner program to identify overlaps between partners and act accordingly. This may mean creating new roadmaps and guidelines for each partner to follow, or it could mean breaking up with a partner who is competing with a more successful partner.

Salvage your relationship with a wronged partner:

Take time to listen to make your partners feel heard. Regardless of the original cause of a problem, poor communication can snowball an otherwise small issue into a monumental misunderstanding.  

Show you care about your relationships by thoughtfully listening to your partner’s grievances and following up with possible solutions that acknowledge what they’ve shared.

Extinguish Channel Tension With the Right Management Tools

Preventing and addressing channel conflict can be made significantly easier with the right PRM tool to better manage your channel sales program, from centralizing communication to supporting your partners.

If you have an effective PRM in place already and are looking for further strategies to reduce channel conflict, these additional resources can help.

8 Strategies to Avoid Channel Conflicts With Partners – Even for the most channel-centric companies, partner conflict is inevitable. The following eight strategies will show you how to resolve channel conflicts and prevent them from arising in the first place.

Channel Partner Experience (PX): How to Measure and Improve – A great partner experience (PX) meets and exceeds the expectations of individuals in your channel through every touchpoint. Here’s how to create that.

How to Effectively Work With Channel Partners and Strengthen Relationships in 2022 – If you’re new to channel partner relationships or just looking for timely tips on working with channel partners, this article will help you revamp your strategies.

The 6 Major Challenges of Channel Sales (And How to Overcome Them) – Account for the following six common channel challenges when mapping strategies and building your partner program framework.