What is channel conflict?
Channel conflict refers to a situation where different channel members compete against each other for the same business or customer. This conflict can occur between your internal sales team and your channel partners, or even between different partners within your ecosystem.
To illustrate how this works, imagine you’re an insurance company that sells your products both directly and through a network of resellers. If a customer can get a better deal directly from you rather than from your resellers, it can lead to a channel conflict with the following consequences:
- Distrust or dissatisfaction among your partners and internal sales teams, harming your relationships
- It can confuse customers who may receive different messages or prices from different sources
- Finally, it can undermine your sales efforts and lead to lost business opportunities
The best way to manage channel conflict is with automated, seamless partner relationship management (PRM) software, like Impartner. In addition, channel managers should establish clear rules of engagement for sales, set different pricing strategies for different channels, and segment the market to assign specific territories or customer segments to specific partners.
While channel conflict is a common challenge, with the right tools, careful planning, and open communication, it can be effectively managed to maintain a healthy channel strategy.