Eliminating these five common causes of channel conflict can go a long way toward restoring harmony in your organization.
Incenting the wrong behaviors
Most sales professionals are “coin operated.” If the TMs incentive plans don’t give them a reason to work with channel partners, or worse yet, gives them a reason not to, they aren’t likely to welcome channel partners into their territory.
“Incentive plans are tough,” says Blakeman. Naturally, you have to account for lower revenues due to partner margins, yet still, make it attractive for the territory manager to work with channel partners when it makes sense. We spend a lot of time helping sales leaders with compensation planning. If they don’t get this part right, nothing else really matters.
Having clear, written rules of engagement helps everyone understand the rules of the game. Knowing what ‘s expected of them and what’s expected from them in turn, can help channel partners develop a sense of trust in the vendor. Likewise, the TMs have a set of guidelines they can follow when conflicts inevitably arise.
TMs need to know why they should work with channel partners. As we discussed in incentive planning, they want to know what’s in it for them, but they also want to understand the long-term strategy for the organization so they understand where they fit into the big picture.
Poor territory planning
Just as the organization sets an overarching strategy for leveraging channels, each TM must map out their own strategy in the form of a territory plan. “This is not the time to be opportunistic,” says Geoff Wright, Senior Vice
President at Channel Enablers. “Territory managers need to map out exactly what role channel partners will play. Which regions will they cover? What product lines will they be allowed to sell? How much revenue will they be responsible for?”
Some TMs are open to working with partners but need help choosing the right ones. According to Wright, “The top volume partners will often be the first to ask for the opportunity to work with the territory manager. Territory managers may need to learn to ignore the noise and choose partners for more strategic reasons.”
There are several mechanisms for conflict management :
Channel conflict impact on customers:
- customers delay a purchase to ensure they are getting the ‘best deal’
- customers regret a purchase that has already been made once they learn of the `better deal’
Channel conflict impact on channel partners:
- a decrease in morale within the channel
- lower employee engagement and mindshare
Channel conflict impact on your company:
- frustration with channel partners
- missed revenue targets