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What channel conflict really means…

OK, so Seth Godin is basically right, but customers only experience channel conflict when your company does something wrong. Too many people within companies worry about how share gets allocated among channels, assuming it’s somehow bad for their business. Nonsense. It might be bad for:

  • Those folks’ bonus, due to inappropriate compensation structures
  • Their tenure, due to dramatic shifts in share from one channel to another

I’m sure I’m missing others; feel free to add yours to the comments. Update – Thought of another one: It might be bad for people’s egos. Bummer. Losing sales because you can’t get out of your own way is much, much worse.

Consumers only experience channel conflict when a company who, for one of these reasons, makes it hard for that consumer to use the channel or channels of their choice. So don’t do that. Instead, reward employees for making it easy and cost effective to use all your channels. Find ways to make each channel more attractive to your customers that don’t involve making other channels difficult. Make the most of the inherent strengths of each channel, instead of highlighting (or worse, creating) weaknesses in the others.

Retailers like Best Buy and Circuit City, who allow their customers to shop online and pickup merchandise in stores at the same price do it best. They’re making it easy for consumers to choose the channel of their choice by not monkeying with price, while making it attractive for consumers to visit their stores and save on shipping costs. Even in cases where the retailer offers free shipping, the storefront still offers the advantage of speed, letting the consumer receive their purchase without waiting for it to ship. That’s not channel conflict. That’s consumer harmony. And if that results in loss of income or employment for the employees who make that happen, it’s not channel conflict. It’s stupidity.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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