Google “channel conflict” and top results and definitions all relate to unwanted competition between business partners — sales reps, retailers, distributors, etc. Perhaps channel partners unnecessarily compete with one another for customers, or possibly even with the brand itself. What typically follows is financial losses and low morale.
Here at LeadMethod, when we share best practices for minimizing channel conflict, we take a different approach because we’re dealing with businesses that face a different problem.
From the distributor-based companies we work with, we regularly hear how channel conflict arises, not from partners undercutting a supplier, but from a disjointed and fractured lead nurturing process. This has traditionally been the achilles heal of the channel sales business model.
Here’s the rub: Suppliers get the initial lead and perform the initial nurture before passing it off to a distributor. Conflict bubbles up because this handoff isn’t as seamless, as it should be for the potential buyer. The timing and messaging are off, critical details are poorly communicated. Or maybe the supplier and distributor are stepping on each other’s toes.
To avoid this scenario, it’s critical that suppliers and distributors are aligned in both their messaging and in the timing of their nurturing. Suppliers should nurture when the lead has been captured to let the buyer know that Distributor A will be contacting them soon to deliver the quote and product details. Then, Distributor A’s nurturing takes over (and the supplier’s stop) to show the lead how to buy and service the products.
At the end of the day, all of these timing and communication hurdles can be mitigated by better visibility. If you can see in real-time the status and context surrounding every single lead in your pipeline, the root cause of channel conflict — disjointed communication — is no longer a factor.
The best and easiest way to avoid the negative impacts of channel conflict is to adopt a programmatic approach enabled by an underlying technology platform.
The programmatic approach is designed so that:
- Products are aligned with the right distributors
- There is visibility to how much lead volume is going to each distributor
- Revenue visibility is available across all distributors
- Distributors are provided a way to share accurate and timely feedback.
To do this, you need a technology platform with a rules-based approach to lead assignment. This will allow you to get the right lead to the right distributor at the right time. And it will allow for the seamless transition of transferring a lead from the supplier to the distributor — unnoticed by the buyer — before the channel works the lead through its sales process.
Where possible, a direct system-to-system connection can be made to enable the channel sales process. At a minimum, all players should have access to the same tracking and engagement system to understand status, needs, and next best actions in the sales process.
This kind of lead nurturing visibility is a proactive approach that diffuses channel conflict before it has a chance to begin. And the beneficiary of all this channel kumbaya? Your customers, and your bottom line. They enjoy a streamlined, consistent buyer experience that hits all the right notes at the right time. You experience a healthy uptick in sales.