9 Strategies to Avoid & Resolve Channel Conflicts With Partners

To aptly avoid or resolve channel conflict, you need to first understand why it’s occurring. This will help determine whether the issues are a normal part of business or reflective of a deeper issue within your channel partner program.  

Broadly speaking, channel conflict refers to a disagreement between partners or a negative outcome of a particular action taken by a partner.

This commonly occurs when:

• Goals are not aligned
• Tensions rise while competing for the same deal
• Expectations about roles, responsibility, or rewards clash

For instance, channel conflict can happen when it’s unclear who can claim a new lead and multiple partners are interested in the opportunity. Without clear protocols, this can escalate into accusations of one partner “poaching” a deal from another or cause tension between a partner and a direct sales team.

In another example, your channel partner may be confused about performance expectations and feel short-changed when their assumed compensation isn’t met.

Or perhaps your direct sales team is able to offer discounts or more competitive incentives to prospects than partners can match. Inconsistency in pricing may not be on purpose, but it can cause lasting damage to partner trust.

Not equipping partners with the proper tools they need to succeed – like training materials, lead tracking, or a deal registration process – can also lead to tension and misalignment that otherwise could have been prevented.

Understanding the root causes of issues by itself isn’t always enough to come up with a strategy to resolve failed expectations, bruised egos, and wasted resources that come with channel conflicts allowed to fester. You must also think about the type of conflict and who is involved before coming up with a solution to get it under control. The different types of channel conflict include:

1. Vertical-level channel conflict

Problem: Two channel partners at different levels face challenges with one another. This could be a vendor “stealing” leads from partners.

Solution: One way to avoid this channel conflict is through a lead registration system, where there is only one sales process for each lead.

2. Horizontal-level channel conflict

Problem: Two competing partners at the same level pursue the same lead, prospect, or deal.

Solution: One way to avoid this is by taking a look at your entire ecosystem and determining if there are too many similar channels going after the same audiences, perhaps aided by account mapping software.  Avoid leaving partners feeling like they’re in competition with one another by diversifying your program.

3. Multichannel-level channel conflict

Problem: Multiple partners at different levels are selling to the same market, potentially giving one channel an unfair advantage from the onset.

Solution: Create assigned segments or adjust your incentivization so higher-level partners aren’t chasing leads lower-tier partners are working hard to pursue.

4. In-house versus partner channel conflict

Problem: Your direct sales team and partners are inadvertently competing with each other, rather than co-existing and supporting one another.

Solution: Make sure to have a solid, fair deal registration process in place that takes into account the originator of the lead. Create a set of guidelines regarding how partners should do business with you to get everyone on the same page before tensions rise. And make sure to regularly show investment in your partners to keep the relationship strong.  

When combined, the following nine tips for a comprehensive approach for both limiting and managing channel conflict. What’s more, when systemized through software and internal training, they yield a conflict resolution strategy that scales as your program grows.

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 tool 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.

Fairness

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.

Transparency

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.

Marketing

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.

Training

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.

Tracking

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). Consider mapping out your desired partner ecosystem so you have a clear plan on how to grow.

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.

9. Monitor channel conflict frequency for signs of underlying issues

Conflict, as anyone can attest to, is an unavoidable part of life. However, competing claims and misunderstandings should be the rare exception. If they’re occuring on a semi-regular basis, it’s time to evaluate your program practices and materials to identify the underpinning problem.

Make it clear to all channel account managers within your partner program team that they should ask partners about any conflicts that your software might have automatically addressed and document them accordingly. Collected insights in hand, Partner Operations team members should then determine if there is an uptick in frequency and distinguish whether there are emerging similarities between conflicts. From there, the team can hypothesize about the source of channel conflicts and amend strategies in kind to better avoid future missteps.

Avoiding and resolving channel conflict can be made significantly easier with the right PRM tool to better manage your channel sales program, from centralizing communication to supporting your partners.

If you have an effective PRM in place already and are looking for further strategies to resolve channel conflict, these additional resources can help.

Partner-Preferred Incentives: Top Rewards to Offer & Best Practices – Strategies to resolve channel conflicts is only one element of the broad partner experience. Make sure to choose rewards that your partners truly want and to provide extra incentives at tactically chosen times in order to receive the greatest ROI.

Channel Partner Experience (PX): How to Measure and Improve – A great partner experience (PX) meets and exceeds the expectations of individuals in your channel through every touchpoint. Here’s how to create that.

How to Effectively Work With Channel Partners and Strengthen Relationships in 2023 – If you’re new to channel partner relationships or just looking for timely tips on working with channel partners, this article will help you revamp your strategies.

The 6 Major Challenges of Channel Sales (And How to Overcome Them) – Account for the following six common channel challenges when mapping strategies and building your partner program framework.