The 6 Major Challenges of Channel Sales (And How to Overcome Them)
The age-old expression easier said than done applies to many aspects of sales, your partner ecosystem being no exception. While upfront planning won’t eliminate all channel management issues, you can lessen the likelihood and minimize the fallout by establishing fixed processes.
1. Conflicts of Interest Regarding Pricing
The Channel Management Issue: 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.
Additionally, align with Direct Sales and other divisions to create pricing consistency whenever possible. Reinforce a pricing minimum across all sales channels with few exceptions.
2. Organization of Data and Assets
The Channel Management Issue: Sales organizations have CRM systems and established ways to collect data. However, it’s difficult for CRM alone to track channel sales or meet the user needs of partners. Without designated software, partner sales data is usually inaccurate and scattered. Not having a unified portal for channel partner sales causes data-tracking issues in the following areas:
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.
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.
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.
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.
Partner activation and engagement levels: Without a designated channel partner portal, it becomes near-impossible to measure individual and program-wide activities, as well as patterns in partner abandonment.
The Solution: Implementing an automated system solves data tracking and 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, as well as marries the various insights to tell comprehensive stories. Data in hand, you can make better tactical decisions.
3. Channel Partner Conflict
The Channel Management Issue: Conflicts in channel partners can result in weakened relationships. Conflicts usually arise over poached deals, an occurrence that 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. Make sure that the procedures for handling conflicts are known by all program participants to maximize fairness. What’s more, greatly reduce any doubt about who can rightfully lay claim to a deal by having a PRM solution that integrates with your CRM for real-time data sharing. This would mean that, if a partner tries to submit a contact that already exists within either database, they’ll be immediately blocked with an explanation as to why.
4. Flatlining or Declining Partner Performance
The Channel Management Issue: 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: First and foremost, audit your channel program and sales funnel to discern where the issues lie. Are you losing partners before they even activate or are you failing to properly enable them? Assessing KPIs like engagement, lead generation, and closed deals will highlight your strengths and weaknesses. Additionally, invite feedback from partners through anonymous surveys and candid conversations, alike.
You have many different tools at your disposal for turning around the disappointing numbers, including incentive programs such as SPIFFs and MDFs. Carefully track the results of your partners’ efforts to see where you get the most ROI.
5. Staying Top of Mind for Partners
The Channel Management Issue: Partners can be distracted by the many different products they’re able to sell on behalf of both you and competitors. 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.
This suggestion requires heavy time investment, but you can be purposeful with how you utilize your team. To begin, minimize the effort they put towards basic tasks by leveraging partner management automation features within your chosen portal. Next, consider setting up partner tiers that guarantees your channel managers focus on the relationships with the most potential rather than distribute their time evenly.
6. Virtual Communication
The Channel Management Issue: 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!
The Bottom Line About Channel Management Issues
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.
For additional reading to help you navigate the challenges of partner channel management:
- Channel Sales Training Courses & Learning Opportunities – Partner management technology and tactics are fluid, evolving in response to customer needs and general business practices. Stay ahead of the curve with these handpicked training courses.
- The Ultimate Partner Journey Map Template – This handy template will help you create a map that will inform partners about the road ahead, as well as solidify the various stages and materials you need to serve them.
- Channel Partner Experience (PX): How to Measure and Improve – A common root of channel program problems is a subpar partner experience. Learn how to measure and improve participant satisfaction in order to increase retention and generated revenue.