In order to both share my perspective and (perhaps more importantly) to elicit constructive feedback and new ways of thinking, I am writing a series of posts giving my perspective on the best practices of Channel Management. These are things that I have learned and have implemented with success in my career. Comments, feedback, disagreements, and additional insights are welcome, if not encouraged.

This is the 10th and final in a series.

Channel Relationships

Good channel management is critical for businesses relying on partnerships to help sell solutions and services. This final installment of my series on Channel Management Best Practices focuses on channel relationships, emphasizing conflict management and fostering partner loyalty. I will explore the cause of, types of, and mitigation strategies for channel conflict. I will also share methods to build strong, lasting relationships with channel partners.

Channel conflict arises when you bypass partners (distributors, retailers, or dealers) by selling directly to buyers. Disruptive forces, such as the evolving buyer’s journey, exacerbate tensions. Modern buyers research independently, often bypassing traditional dealers, while inbound marketing shifts the roles of vendors and partners. Causes of conflict include vendors ignoring deal registration rules, shifting to direct sales, or competing with partners through their services arm, leading to lost deals and territorial disputes.

Two primary types of conflict: direct and inter-channel.

Direct conflict occurs between vendors and partners due to misaligned goals, such as when vendors prioritize direct sales over partner networks. Inter-channel conflict emerges among competing partners within the same segment, often due to geographic density or unfair pricing. These conflicts impact your customers, who may delay purchases seeking better deals, and partners, who may start having waning morale and engagement. For your company, unresolved conflict results in missed revenue targets and strained relationships.

According to the Channel Institute, conflict progresses through stages: “latent” (minor), “perceived” (noticeable but not alarming), “felt” (concerning), and “manifest” (open confrontation). Structural indicators, such as market transitions, changes in channel strategy, or declining margins, signal potential conflict.

While eliminating conflict entirely is unrealistic, mitigation is essential. A certain level of conflict can drive constructive competition, but destructive outcomes must be avoided through clear communication, partner training, performance management, and collaboration. Setting explicit rules for account coverage, deal registration, and conflict resolution ensures transparency. You should commit to investigating and resolving disputes promptly, compensating partners for losses caused by direct sales.

Effective conflict resolution involves understanding the conflict’s nature, tracing its source, assessing its impact, and developing a resolution plan. Resolution styles range from avoidance (postponing issues) to collaboration (a win-win approach requiring maximum effort and resulting in the best outcomes). It goes without saying that collaboration is the best path to resolution.

Deal registration programs further mitigate conflict by establishing clear guidelines, timely approvals, and aligned incentives.

Building partner loyalty is equally important. Partners may leave due to complex processes, uncompetitive programs, poor communication, or insufficient profits. Loyalty is fostered through joint business and marketing planning, co-marketing programs, profitability enhancement, and structured progression paths (e.g., Bronze to Gold tiers). Strong relationships are built on mutual trust, aligned goals, and simplicity in business dealings.

Key skills in building loyalty include:

listening to partners,
educating cross-functional teams,
simplifying processes,
analyzing data to prevent churn,
and aligning objectives.

Managing channel relationships requires balancing conflict mitigation with loyalty-building strategies. By addressing conflict collaboratively and prioritizing partner success, your company can cultivate robust, mutually beneficial partnerships that drive long-term growth and market success.

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I hope you have enjoyed this series of posts on Channel Management Best Practices. These are based on things I learned formally and informally over the years. Once again, comments, feedback, disagreements, and additional insights are welcome, if not encouraged!

Thank you.