Key Issues
Do you have a firm understanding of the issues involved in developing and growing a rewarding channel? There are many issues to consider and several of them are described here. To learn more, please contact us to schedule a free 20-minute consultation. We will work with you to understand your unique situation and develop relevant recommendations – at no cost to you.
Channel conflict - Channel partners: Scenario #1
Channel conflict takes place when two or more channel partners are sending sales proposals and quotes to the same customer. This happens when the customer sends out a request for proposal to a list of channel partners. If this occurs, you should not indicate a “favorite” channel partner to the customer. You must remain neutral during the customer’s selection process.
Solution: Customer registration for partners in your program.
Channel conflict - Channel partners: Scenario #2
Channel conflict can occur while a channel partner is proceeding through the sales cycle with a new customer. After receiving a price quote, customers sometimes contact other channel partners requesting better pricing. In this case, the vendor should support the partner who initially prospected the customer. This support process should be made clear to all channel partners when they join the program.
Solution: Customer registration for partners in your program.
Channel conflict - Vendor and Partner
This can happen when a vendor will not only sell direct but also through the channel. It is to be noted that channel partners will not heavily invest, or invest at all, in vendors who support this type of sales strategy. If you must continue to sell direct while also in the channel, you must assure the partner you will not sell directly into any of their accounts. It is a good idea to provide to the partner any plans you may have to eventually exit from direct sales.
Solution: Partners receive commission on direct sales into their customers.
Direct sales while creating a channel
You may have to continue selling direct while developing a channel sales program. Assurances must be made to the prospective channel partners that you have plans to eventually depart from the direct sales model. You must also assure the partner there will be no channel conflict between the two of you.
Solution: Partners receive commission on direct sales into their customers.
Pay to join channel programs
Many large companies require their channel partners to pay for training, certifications, logo usage, etc. As a small or mid-sized company, you may not have the luxury to charge for participation in your channel program. A partner willing to invest in a small company’s product will not see value in paying to join the channel program. The first priority for you is to recruit new partners and get the channel sales process started.
Solution: Pay to play is usually not a good idea, especially if you are new to the channel.
