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.
In competitive industries like IT and software, partners rely on trust and loyalty. The partner they trust the most is usually the partner with which they do the most business. 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 solid partnerships.
The following strategies will show you how to resolve channel conflicts and prevent them from arising in the first place.
1. Have a real-time solution that reflects both partner and direct sales data
The most common (and potentially damaging) source of channel conflict comes from scenarios in which it’s unclear who can claim a new lead. There may be multiple partners wanting to lay claim to an opportunity, or there may be contradicting claims from a partner and your direct sales team.
Regardless of what decision you make, you’re going to make someone unhappy. The best way to avoid or minimize conflict is to utilize indisputable data and address it ASAP.
The important word is indisputable. The right PRM technology can remove your direct involvement from the deal registration process; no step of the submission process is dependent upon you opening an email or entering data, further stressing your objectivity when deciding who solidified a deal.
Your partner portal plays a vital role in the second strategic point: to address the conflict ASAP. By integrating your PRM’s and CRM’s databases, both tools can automatically block a new deal from being registered if it already exists within the system. This real-time notification prevents the conflicting channel partners from investing more energy which would otherwise make the “bad news” even more devastating.
2. 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 clarify the originator of a lead, avoiding a common source of channel conflict.
While there can be exceptions to these rules, keep the following best practices in mind when shaping your deal registration process to help avoid channel conflict:
Incentives for registration
Most deal registration programs provide competitive pricing and added support. This incentive is the primary 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 compete for the same customer, deal registration can be awarded to whoever is furthest along. Deal progress could mean providing proof of an on-site customer visit or demo of the product.
As alluded to above, the implementation of 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 essential, especially for forecasting. Update opportunities in real-time so reps can take necessary action to close deals. Being able to see the deal progression is critical for newer companies. Sales leadership uses this data to understand the channel sales cycle as a whole.
3. Keep pricing consistent across your channels
The internet puts a universe of information at users’ fingertips. If your direct sales team can offer prospects a discount that partners cannot provide, some customers will inevitably find out and choose the cheapest option. This will hurt partners’ ability to sell, severely scarring the relationship. Avoid channel conflict by working with the greater product and sales teams to ensure pricing consistency throughout the organization.
4. 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 avoid 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?
5. 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. 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 of your products and strategies, helping to avoid familiar sources of channel conflict and strengthen the relationship.
After you’ve invested in your partners, it’s crucial 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 realize who needs more coaching or market development funds.
Prospects who are off-limits
Offering a prized partner exclusive access to a particular niche is a great way to earn their loyalty. However, you better make sure that all other partners know such regions or verticals are off-limits. This clarification is particularly important because the usual safeguards found in PRM software may not prevent this type of conflict from arising, letting the dead-end relationship proceed for longer than necessary
6. 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. An example of this is 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.
7. Limit the number of channel partners that operate in the same niche 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 and limits the number of players who would detract from each others’ efforts. It also motivates your partners to invest their time and energy into you.
If channel conflicts become an all-too-frequent occurrence, it may be a sign that you’ve saturated a particular niche. To further grow profits, you may need to consider focusing your partner sales strategy on larger packages or diversifying your target audiences (and the types of partners you recruit).
8. Make aggrieved partners feel heard
Communication is an essential part of any conflict resolution strategy, whether you’re dealing with channel partners, internal workplace disputes, or customer disputes. However, one aspect that many managers forget is that productive communication is two-way. This means taking the time to hear partner grievances and thoughtfully respond and follow up to demonstrate that you care. When appropriate, thank them for their insights and let them know what steps (if any) you will take to avoid similar channel conflicts in the future. While this may not resolve all their frustrations, they will at least feel acknowledged and respected.
Key Takeaways For Avoiding and Resolving Channel Conflict
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 prevent partner conflicts from turning ugly. What’s more, it’s important to ask if frequent channel conflicts are the symptom of other strategic oversights you may need to address.
Forethought goes a long way in avoiding channel conflicts and creating long-lasting partnerships, as does the right PRM.
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