Channel conflict remains a persistent challenge between IT vendors and their reseller partners, but the 2nd Annual Channel Conflict Report by The 2112 Group finds there are signs that tensions between direct and indirect sales teams are moderating, leading to greater levels of collaboration and revenue productivity.
The 2112 Channel Conflict study finds little change in the level of conflict between IT vendor direct sales and partner indirect sales. However, there is a sharp increase in the level of co-selling between vendors and resellers, as well as vendors turning over direct sales to channel partners for customer fulfillment.
“The overall level of channel conflict remains moderate to high,” said Larry Walsh, president and CEO of The 2112 Group and principal analyst of the report. “However, value-added resellers and solution providers say they’re engaged in more collaborative, mutually beneficial sales activities with their vendors.”
He added, “This is a strong indication that vendors are working more closely with partners to uncover and close sales opportunities.”
Channel conflict management remains a critically important issue for IT solution providers, as clashes with vendors compromise customer relationships and revenue streams, as well as reduce confidence in future business activities. It is a key issue among solution providers in making partnership decisions: Two-thirds of solution providers say they would de-emphasize their primary vendors in favor of an alternative if conflict were persistent and unresolved.
“The channel understands conflict is a fact of life, and nothing will completely eliminate it. They want to work with vendors in better managing conflict. The 2112 Channel Conflict Report is a guide for vendors in obtaining a clearer understanding of conflict and how to mitigate it with their revenue-producing partners,” Walsh said.