Early Warning Signs of Channel Conflict for Emerging Growth ...

You are the VP of Sales at an?emerging growth company.? Your company recently decided?to use channel partners and you have been tasked with managing these relationships.? Other channel managers that you?know have told you that the biggest issue you will need to manage when dealing with channel partners is?channel conflict, especially as it relates to pricing.? The ability to recognize the potential for conflict and what forms it can take is critical if you want to have a system in place to mitigate it.

When you were only concerned about your internal sales team, the only potential for price conflict would be with competitors. This is the type of conflict you would look forward to as you relish going head-to-head with your competitors.? But now that you have deployed an indirect sales team (channel partners), the potential for pricing conflict increases dramatically, and this is not good conflict.? It is common for channel partners to have territories that overlap and even customers in common.? Your partners may use price concessions as a why to compete, which only causes confusion for the end customers. This conflict can have an impact on your customer, your channel partners, and your company itself.? Customer impacts include:

• Customers catch wind of competing companies selling your product and delay making the purchase decision as they want to make sure that they are getting the best deal.
• Customers experience buyer remorse when they learn that another company is out there selling the same product at a lower cost.

The impact of this type of conflict on your channel partners can be equally devastating.? Once a channel partner realizes that there is another company selling the same product to their customers or within their territory, they will be much less enthusiastic about pushing your product through their channel.? Remember, your channel partners have options when it comes to focusing their sales efforts and they will direct their selling energies where they think they will get the best results.

Finally the impact on your own company can be significant ? when your channel partners feel channel conflict they will not want to push your products, which will cause you to miss your revenue targets.

So how can you avoid channel conflict? And if conflict does arise, how do you quickly recognize it and address it?? To avoid channel conflict, or to address the route causes if it already exists, you need to consider implementing a channel management software system.? Today?s robust solutions employ a cloud-based?partner portal?that provides an effective and easy-to-deploy infrastructure that will allow you to implement channel partner management best practices, thereby reducing the chances of channel conflict.? This combination of best practices and channel management software is referred to as a partner relationship management (PRM) system.? PRM systems are a set of tools and business practices that can allow you to better organize and manage channel relationships.

Channel management starts with managing the sales process.? One of the most important components of PRM is its ability to manage the entire sales process with partners. It includes lead management, providing the tools to manage the process from lead generation to sales success. A lead registration system allows channel partners to register and protect customer ownership.? Account ownership must be clearly delineated across the channel. Clears rules are needed for territories and accounts so partner sales forces (and the direct force) avoid fighting over the same set of customers. PRM can provide the ?gates and fences? to assign and manage customers and territories.

It is critical for a company like yours that is using channel partners to clearly communicate its pricing policies, sales and product strategies.? By deploying the right PRM system, you will improve your levels of engagement and collaboration with your channel partners.? This will reduce the chances for channel conflict and increase the likelihood of mutually advantageous relationships.

Author: Todd Grant???? Todd Grant on the Web Todd Grant on LinkedIn

LogicBay Vice President of Marketing Todd Grant leverages a successful track record of launching numerous business development initiatives for technology-enabled business service companies and brings a proprietary business acquisition process to LogicBay often referred to as Diagnosis Selling. Utilizing this methodology he will consult with LogicBay Enterprise prospects collaborating with? View?full?profile

Source: http://www.business2community.com/sales-management/early-warning-signs-of-channel-conflict-for-emerging-growth-companies-0256348

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