Management, broadly speaking, involves how we organise and supervise business and employees to meet organisation goals. In the world of sales, management of channels becomes complicated primarily because unlike traditional management where managers deal directly with subordinates or team members, the relationship between a company’s manager and its partner or reseller is quite different.

When it comes to managing channel partners, there are associated challenges which stem from the complexity of the relationship, the alignment between objectives and motivations of the partners and the degree of available control or lack of it. While structured sales training programs help us to understand the same in the classroom, let us delve deeper here through this blog, into some of the main challenges and how to deal with them.

1. Channel conflict

• Challenge: Conflicts can occur when an organisation uses different channels to reach the same customers, leading to price wars, undercutting, or brand dilution. For example, if a company sells directly to consumers online and through retail partners, the retail partners may feel threatened by the direct sales channel. Customers are increasingly looking at omnichannel experience for products and services and any conflict negatively impacts customer experience and sales.
• Solution: Implement clear policies and pricing strategies that ensure all channels can coexist without undercutting each other. Develop unique value propositions for each channel to minimize overlap and maintain open communication with all channel partners to manage expectations and resolve conflicts.
• Example: OnePlus which initially focused heavily on online sales through partnerships with e-commerce platforms recognized the need to expand into offline retail to reach a broader audience. Offline retailers felt that the heavy discounts and exclusive offers online were hurting their sales and stopped selling OnePlus phones.

To address this, OnePlus started working closely with retail partners by offering exclusive products, unique experiences, and ensuring price parity between online and offline channels. The brand also opened its own experience stores and partnered with large retail chains to provide a consistent experience across both channels.

2. Maintaining Channel Partner Relationships

• Challenge: Building and maintaining strong relationships with channel partners can be difficult, especially when there are many partners or if they have different goals and priorities. The initial period of the relationship can be difficult as it takes time for trust to grow and alignment to be achieved between the organisation and partner’s goals and priorities. The relationship with the end customer is mostly maintained by the channel partners and they become the trusted advisors to the customers. Hence it becomes very important for businesses to effectively manage these relationships and collaboratively work with channel partners throughout the lifecycle.
• Solution: Invest in regular communication, training, and support for channel partners. Establish clear agreements and performance metrics and recognize and reward top-performing partners. Providing marketing support, training, and co-branding opportunities can also strengthen these relationships.
• Example: Honasa Consumer’s Mamaearth, one of the fastest growing brands in India, is now a D2C category leader in the personal care space. Launched in 2016, it now boasts of a turnover of over Rs 1500 Cr. During its offline expansion drive in the UAE, it faced several challenges in channel management including low product discoverability in physical stores, which can lead to inventory sitting on shelves unsold, getting closer to expiry.

This issue was compounded by the fact that offline retail is a crowded space with numerous competing brands, making it hard for new entrants like Mamaearth to stand out without a strong physical retail presence. Additionally, the brand had to navigate the complexities of supply chain management, which became even more challenging due to disruptions caused by the COVID-19 pandemic.

The relations with the distributor became so bad that Honasa had to terminate its contract with the distributor. The distributor, alleging improper contract termination, approached an UAE court directing it to pay compensation of INR 56.6 Cr, which was later set aside by the Delhi High Court.

3. Inconsistent Customer Experience

• Challenge: Different channel partners may provide varying levels of service, posing a challenge to maintain the quality and consistency of the experience across the channels, which can lead to inconsistent customer experiences. This inconsistency can damage the brand’s reputation and lead to customer dissatisfaction.
• Solution: Standardize processes, training, and brand messaging across all channels to ensure a consistent customer experience. Implement a robust monitoring system to regularly assess the customer experience across channels and address any discrepancies quickly.
• Example: The CX strategy for the Mahindra XUV 700 launch was pathbreaking. Together with a digital-first marketing to connect with its customers in an engaging and immersive manner, Mahindra also invested in identifying and selecting a team of Premium Channel Sales consultants from their existing dealer sales personnel through a rigours process of
  assessments followed by training to ensure consistency of customer experience.

4. Complexity in Channel Coordination

• Challenge: Managing multiple channels can be complex, especially when dealing with different geographies, product lines, or customer segments. This complexity can lead to inefficiencies, delays, and increased costs. Complexity is due to the diverse needs of partners, who vary by market focus (SMBs, midmarket, enterprise) and revenue contribution. Companies often fail to align resources effectively, resulting in ineffective programs. Larger, high-revenue partners typically receive more attention, making it crucial to balance resources between them and smaller partners.
• Solution: Use advanced channel management software that provides visibility across all channels and integrates with other business systems (like CRM and ERP). Streamline operations by consolidating similar channels and optimizing inventory and logistics across the network. Properly aligning engagement models and resources is essential, requiring thoughtful strategy to ensure impactful channel initiatives.
• Example: HUL operates from 29 factories producing over 2,000 SKUs (stock-keeping units) annually, distributed through 35 Carrying and forwarding agents, 7,000 ‘redistribution stockists servicing 9 million retail outlets across the country. They have advanced ERP solution which integrates the sales and inventory systems with production and logistics in a seamless, real-time mode to manage the operations.

5. Brand Representation and Control:

• Challenge: Maintaining control over how your brand is represented across different channels can be difficult, especially with third-party partners. It is difficult to have visibility to the procedures and practices adopted by all channel partners, specially in the remote areas where there are chances of adoption of off-brand or unethical business activities.
• Solution: Develop strict brand guidelines and enforce them consistently across all channels. Provide partners with the necessary tools and resources to represent the brand correctly and monitor their adherence to these standards.
• Example: In the early 2000s, Bisleri faced significant brand representation issues due to widespread counterfeiting by local bottlers, who sold fake water under the Bisleri name. This damaged Bisleri’s reputation and consumer trust. To address this, Bisleri implemented tamper-proof seals, enhanced packaging, and launched awareness campaigns to help consumers identify genuine products. The company also took legal action against counterfeiters to regain control of its brand and restore its image.

Another challenge which one needs to address is adapting to rapid changes in the market such as new technologies, evolving customer preferences, or regulatory shifts. We need to stay agile by continuously monitoring market trends and being ready to adapt channel strategies accordingly.

Some of the more regular challenges are related to data management and analytics, legal and regulatory compliance and managing costs.

From a Channel Manager’s perspective, we should remember that a channel partner is not an individual but an organisation with multiple stakeholders with different roles and interests. Also, the stakeholders do not repot to us, so the management approach needs to be consultative, using influencing skills.

The success of having a great channel partner network lies in having a structured channel management program which is easy to execute and monitor, supported by adequate measures for engaging, developing, rewarding and motivating the channel partners.

As a firm providing sales capability development solutions through its practice area – Sales Training India, GrowthSqapes has robust frameworks, models, industry experience and a pool of facilitators & coaches to develop your B2B sales force.

This blog has been written by Sandip Mitra, an Associate Partner with Growthsqapes.