Managing Channel Conflict: Get Reps to Play Nice

At the start of each year, sales organizations often look to reevaluate their channel strategy to better align resources—ensuring they are not overinvesting in some customers and under-investing in others. That said, despite the organization’s best efforts, reps often run into channel conflicts that risk harming existing customer relationships, lowering deal profitability, and resulting in lost sales.

We recently spoke to three member companies about their strategies to mitigate cross-channel sales conflict, and while there were no consensus or silver-bullet answers on how to eliminate discord between channels and create a harmonious sales force, we heard several creative approaches and ideas.

First, what causes conflict between sales channels? Our members point to two main factors:

Overlapping territories—Reps from different channels sharing territories
Misaligned incentives—Compensation structures that don’t align with larger sales strategy

While member companies experienced conflict between channels (inside vs. field sales, field sales vs. strategic accounts, direct sales vs. strategic accounts), all agreed that reps will act in whatever manner yields the highest compensation. Put another way, if your compensation structure rewards collaboration — reps will collaborate, but they will also act alone if they can garner larger payouts by going solo. Thus, the most effective way to head off conflict between sales channels is by altering your compensation structure.

The member companies we spoke with offer several ways to do so:

Double compensate reps on all deals that require teamwork in a shared territory
Double compensate reps on collaborative deals but raise their goals to offset higher payouts
Deemphasize individual performance in reps’ incentive compensation

Two things jump out when studying the list above: the costs of double compensating reps and the contradictory nature of deemphasizing individual performance. In response to the first point, yes, this strategy can get a little expensive. Organizations that are double compensating reps have come up with strategies to limit the dollar damage. On the second point, we have long heard that sales reps are competitive beings and tapping into this fundamental truth will bring out the best in your sales force. While the profiled company deemphasizing individual performance didn’t dismiss the archetype of the competitive salesperson, they also emphasized that “people like to be part of a team” and that this competitive nature can be channeled into a team environment.

Overall, the members we spoke with characterize their strategies to mitigate cross-channel sales conflict as successful, pointing to revenue growth and positive feedback from the sales force as the main indicators of success.

CEB Sales Members, review the Indirect Channel Sales topic center. To learn more about how the profiled organizations alleviate channel conflict, check out the full report: Mitigating Cross-Channel Conflict.