Channel Conflict: How to Navigate Competing Promotions

A supply company representative recently received a call from a frustrated client. This time, the client was upset because the company’s internal team was offering a larger promotion than her own. She refers to this as “channel conflict.” This scenario, where internal teams or partners offer competing promotions, is common in industries that rely on multiple sales channels. But how should companies respond when channel conflict arises, and what steps can be taken to mitigate it?

What is Channel Conflict?

Channel conflict occurs when different parts of a company—whether internal teams or external partners—compete against each other, typically offering similar products or services at different prices. This creates friction among teams, frustrates clients, and can damage business relationships. In this instance, the client’s frustration stemmed from feeling undercut by the company’s own internal promotion.

The Impact of Channel Conflict on Client Relationships

Channel conflict doesn’t just affect sales performance; it can have a significant impact on trust and client loyalty. When clients feel like they’re being placed in direct competition with other parts of the same company, they might feel undervalued. This can lead to decreased engagement or lost business. For example, if a client sees that the company’s own team is offering better promotions or terms, it can feel like an unfair disadvantage. Which causes frustration and damage to long-term relationships.

How to Address Channel Conflict

1. Establish Clear Communication Channels: Transparency is key when it comes to managing channel conflict. Ensure that all sales teams, partners, and clients are kept in the loop about ongoing promotions. Clear communication prevents misunderstandings and reduces the chance of overlapping promotions that may cause conflict.
2. Create Distinct Roles for Internal and External Teams: Internal teams and external partners should have clearly defined roles, responsibilities, and target audiences. By distinguishing the focus of each team, companies can minimize direct competition and create complementary, rather than competing, strategies.
3. Set Rules for Promotions and Discounts: To avoid undercutting external partners, set firm guidelines about when and how internal teams can offer promotions or discounts. These rules ensure that external clients aren’t blindsided by internal campaigns that devalue their own offers.
4. Offer Exclusive Promotions: Internal teams could offer exclusive promotions or incentives that don’t overlap with the external client’s area of focus. This allows for differentiation in offerings and maintains the value of both the internal team and the client’s promotions.
5. Monitor and Adjust: Keep a close eye on sales data and feedback from clients to detect any signs of channel conflict early. If conflict arises, address it swiftly by adjusting the promotions or redirecting campaigns to avoid further friction.

Preventing Future Channel Conflict

The key to preventing channel conflict is proactive planning and open communication. Regularly evaluate promotional strategies to ensure they are aligned with the goals of both internal teams and external partners. Make adjustments when necessary to avoid any potential overlap or competition between sales channels.

In this case, addressing the client’s frustration quickly and adjusting the internal promotion could help repair the relationship and restore trust. More importantly, it serves as a reminder to companies to carefully manage their sales channels to prevent conflict from derailing their success.

By fostering clear communication and defining distinct roles for internal and external teams, businesses can minimize the risk of channel conflict and strengthen their partnerships across all sales channels.