Channel conflict refers to the discord or competition that arises between different sales channels within an organization or between different entities involved in the distribution and sale of products or services. It occurs when there is disagreement or friction regarding sales territories, customer ownership, pricing, promotional activities, or other aspects of the sales process.
In SaaS, channel conflict can arise due to the unique characteristics of the SaaS business model, where software is delivered as a service over the Internet. Channel conflict in SaaS typically involves conflicts between different sales channels, such as direct sales teams, resellers, referral partners, or online marketplaces.
There are a few key reasons why channel conflict can occur in the SaaS industry:
- Overlapping Territories: Conflicts can arise when multiple sales channels are targeting the same customers or territories, leading to competition for sales and customer ownership.
- Pricing Disparities: Pricing discrepancies between different sales channels can cause conflict. For example, if customers can purchase a SaaS product at a lower price through a reseller than through the vendor’s direct sales team, it can lead to dissatisfaction and conflict.
- Lead Generation and Ownership: Issues may arise when leads are generated through multiple channels, and disputes can occur over who has the right to pursue and close those leads.
- Incentive Misalignment: Conflict can arise if incentives, commissions, or compensation structures are not properly aligned between different sales channels, leading to unfair advantages or disputes over rewards.
