Channel conflict is a common issue that can undercut an indirect sales ecosystem. To a certain extent, a small amount of conflict is inevitable, particularly when your ecosystem sells online. However, too much channel conflict can quickly lead to inefficiencies and wasted energy. In worst case scenarios, partners can turn on each other -or you- and the ecosystem can collapse.
So, if you have significant conflict in your ecosystem, it’s vital to take steps to address it immediately. You’ll be well served by having powerful systems deployed, such as a Partner Relationship Management (PRM) methodology. The more tools at your disposal for dealing with harmful channel conflict, the better.
1. Partner pricing wars
Your partners may occasionally be in the same markets, but it can be extremely destructive when they begin actively competing against each other. Fortunately, if you have tools for tracking your partners’ pricing and conversions, you’ll be able to spot this easily enough. Some ways to address the problem are:
- Enforcing strict MSRPs
- Implementing new or better bonuses tuned to discourage below-cost sales
- Offering partners more options in value-added services and upsales, like warranties or parts support, to improve their profit margins
2. A skewed partners-to-customer ratio
If you have too few customers to support the number of partners you have, that’s a serious issue which can destabilize your entire ecosystem. This is best avoided entirely. Should this occur, you’ll need to take drastic action.
- Explore the idea of diversifying your target market. Are there other customer types who can be served by your product?
- Slow down -or halt- any further expansion plans. Don’t make the problem worse.
- Communicate with your partners about marketing campaigns and work on finding better angles.
- Improve your online lead-generation capabilities with better SEO and content marketing
- Use data analytics to track the flow of leads looking for inefficiencies and chances to improve your partners’ lead-to-conversion ratios
3. Partner marketing misalignment
While rare, situations can arise where partners are either targeting wildly different consumer groups, or using different sets of graphics, logos, and other marketing tools. Generally, this only happens when a vendor is keeping a very loose rein on their partners – and it’s exactly the sort of situation PRM systems can take care of quickly.
- Have a repository of well-defined target customers and buyer personas\profiles, in a central location all partners can access it.
- Create official not-to-be-deviated-from logos, Pantone-numbered color schemes, and other critical iconography
- Create and share marketing materials, such that partners can easily pull from a central database of official\approved documents
- Brand identity is critical! Make sure to keep control of yours.
4. Difficulty implementing changes or having partner resistance
This boils down to communication. How many lines of communication do you have open with your partners? Are they encouraged to contact you with questions and concerns? Frequently, you can mitigate many communications issues simply by having a single centralized communications hub.
Otherwise, adjust your strategies so that partners are informed of upcoming changes earlier, and have more chances to add input. Give them more feeling that they have agency, and you’re listening to their concerns, and they’ll usually go along with your plans.
Keep Your Ecosystem Running Smoothly With LogicBay
We have years of experience and a proven software platform which you can leverage to improve your ecosystem’s operational efficiency. From improving communication, to distributing marketing materials, to implementing per-employee incentive packages, LogicBay has the tools you need to overcome channel conflict.