Channel conflict is common. It happens when a partner or vendor’s interests come into conflict with another party’s interests. This is seen when one partner tries to poach another partner’s prospect, when pricing differs, when one partner finds out that the other is getting a better deal from their vendor, etc. While channel conflict won’t disappear, deal registration and other methods can help minimize it.
Prospects are potential customers. They bring the money while partners and vendors offer a product that solves an issue they have. Prospects are so important that people fight over them constantly.
Partners usually find prospects through their own network, through referrals, through their own marketing and through other sales and marketing techniques. However, it’s common for two or more partners to go after the same prospect. This often leads to channel conflict.
What is Channel Conflict?
Channel conflict occurs when two or more partners bring the same prospect before the vendor. Who does the vendor give the commission to? Is the vendor’s direct sales team also after the prospect? How is the vendor supposed to navigate this? It’s complicated and there are no easy answers….if there even is an answer.
So what do you do? Aside from trying to solve channel conflict, you can try to prevent it. But like trying to solve channel conflict, that’s also incredibly difficult to do. However, instead of trying to prevent it completely, you can try to minimize it.
P.S. For more on Channel Conflict, see our previous post, Channel Conflict: The Ultimate Standoff – Can It Ever Be Solved?
Deal Registration and Transparency
While channel conflict won’t disappear completely, there are two ways to minimize it.
- Deal Registration
Deal Registration is an important part of how partners make money. It’s a way for them to share leads and deals that they’re developing for their vendors. This process minimizes channel conflict because once a deal is approved, the partner has a certain amount of time to work the deal without interference from anyone else. Once that period of time has expired, then that lead is available for someone else to work.
This process works because vendors can enforce that period of time. If another partner approaches a vendor with the same deal, the vendor can easily check to see who registered the deal first. The vendor can then enforce consequences for the partner that didn’t register the deal first. These consequences can range from the loss of money to ending that partner’s relationship with the vendor.
Partners talk to each other. They compare notes. They talk about you. It’s in your best interest to be transparent about who you work with and why.
Transparency involves clear communication. Communicate with your partners on a regular basis. Make any restrictions you have on region, market, product adjustments, etc….clear. Be clear about your expectations for the relationship and your goals for the partnership.
Communication is key to a good business relationship and channel partners need to trust that they’re playing on a level playing field.
Transparency also applies to data. Do you know what your partners are doing with the content you give them? How many campaigns are they sending out? What are the open rates?
Knowing this type of data will ensure that you know how engaged your partners are and which partners may need more support. You’ll be able to see which partners are registering the most deals, sending you the most leads and if they’re not a top tier partner, you may decide to move them up. You’ll also be able to determine which partners need additional training in your product. If some of your partners have downloaded your quick start guide 10 times, then it might be time to schedule an additional training session on the product.
You’ll be able to predict how specific partners will handle specific types of campaigns. For example, your partner on the East Coast gets good results with the video campaigns you send them while your partner on the West Coast handles email campaigns really well. In this case, you’ll want to give more of your video campaigns to your East Coast partner while giving the email campaigns to your West Coast partner.
Knowing how many campaigns your partners have sent out, their open rates and other associated metrics gives you greater insight into what your partners do with the content you send them. This enables you to make better, more informed decisions and allows you to understand how your partners market your product.
Partnerships are critical to your business and it’s important that your channel partners have a clear understanding of what markets and geographic boundaries and other qualifications they might be working under in representing your brand.
It’s imperative that you recognize that keeping the channels of communications open with your partners is essential. Establishing guidelines and setting expectations will go a long way in minimizing partnership conflicts. At the end of the day, treat your partners with respect, settle disagreements quickly and fairly and you’ll find that these actions will improve your relationships and business.