Managing Channel Conflict

Economic booms and busts, technological advancements, a recurring increased emphasis on customer service, even serial and periodic managerial changes combine to effect changes in channel distribution models over years and decades. New programs and policies are often cosmetic, leading seasoned channel players and observers to cynically conclude that there's nothing new under the sun.

Thankfully, such a jaded perspective does not reflect reality, at least not in the broadest sense. There is one constant over the years, however. It's called "Channel Conflict."

The lone wolf syndrome does sometimes trump a collaborative approach to managing and completing tasks or reaching goals. In sales, the single practitioner can carve out a handsome living selling services and tangible products. Mechanics, housekeepers, insurance salespeople, and tax accountants come to mind. But growth beyond the traditional "mom and pop" level almost always requires collaboration and the implementation of a "two hands are better than one" approach. This is when sales channel turf skirmishes can and often do escalate into full-scale warfare.

Multiple channels are essential to preventing growth stagnation and achieving maximum market coverage and sales. At the risk of sounding melodramatic, a supplier's masterful management of distribution channels can determine a product's or service's ultimate survival in a highly competitive marketplace, irrespective of the overall economy's health. What to do?

First of all, suppliers should not fret or make any effort to eliminate conflict. A manageable degree of it is a positive indicator of strong demand and effective market penetration. It is also a barometer that product and service offerings are striking a chord by addressing customer needs. Without conflict, suppliers and distributors would be wise to reassess their value.

Thoughtful marketing programs ensure that there is plenty to go around for everyone across the channel. Continued optimal maximization of each channel partner, including VARs, systems integrators, distributors, and retailers, requires suppliers to know end-user preferences like the back of their hands. What you don't know will hurt you!

Some users require a never-ending outpouring of tender loving care and handholding, while others eschew such a doting approach in favor of no-frills, high-volume discounts. Regardless of customer preference, well-trained and fairly compensated channel partners will respect their "competitors" when suppliers provide:
• Equal training and certification programs for each partner;
• Discounts to channel market makers that go the extra mile by identifying new customers and that effectively address tangential product and service requirements; and,
• Compensation programs that reward salespeople, regardless of who makes the final sale, including increased quotas for direct salespeople in a sales model that also includes indirect channel partners.

As noted, these basic tenets of channel marketing apply equally in any economic climate. As we outwardly and eagerly march toward economic recovery, an unbiased assessment or reassessment of your channel program will position you, your channel partners and end users to reap the most rewards.