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Rarely, if ever, can a single channel meet the needs of all customers. As markets grow, you will inevitably need to engage in a multi-channel sales model. However, as soon as you add a new channel, you will encounter conflict between the channels with much of the blame headed your way. Recognize that a modest level of conflict, referenced here as "noise level" conflict, is not only inevitable, it is desirable. Manageable "noise level" conflict is a sign of sufficient market coverage.
However, conflict can spiral out of control. Destructive conflict can result in falling prices and margins for both the channel and your company. Furthermore, destructive conflict is a sign to channel partners that you don't understand how to run a professional marketing program. This belief can harm your company's position in the channel for a very long time.
To expand your channels without incurring destructive conflict consider the following actions. Identify the needs, buying behavior and channel preferences of emerging customer segments. Establish requirements-through a certification, training or tiering program-for channel partners that you will authorize to sell to the new segment or to carry your new product. Knowing that many partners won't be able to meet these requirements, you will still appear "fair" by giving all partners the opportunity to qualify. Also, consider using a deal registration program. Partners that first identify and register a given deal are offered a small rebate with which to fend off "discounters" that don't have any sales costs tied up in the deal. Finally, if you face a direct vs. indirect channel conflict, use a dual compensation program. Pay your salespeople and offer quota relief regardless of which channel ultimately makes the sale. But, make sure you raise the direct sales force's quota to compensate for the extra revenue flowing in from indirect partners.
What are your most challenging sales channel problems?
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| October 21, 2010 |
| Professional Sales Channel Management |
Using proven management tools, frameworks and methods to prepare channel managers to drive sales and market share through indirect sales channels.
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