Single VAR seeks creative, resourceful, intelligent partner with compatible interests for long-term relationship. Must enjoy success and be willing to explore new ideas.
Are you getting desperate to broaden your marketing horizons? You’ve spoken with successful VARs across the country, trying to steal a peek into their sales strategies, because clearly theirs work and you want to find out their “secret sauce.”
While you’re trying to figure out why your traditional sales pitch falls flat, or how other VARs are able to earn more profit and earn it faster, other successful VARs have latched on to the huge trend of partnering. Developing your own partner-to-partner network means finding the best resources for the additional services you want to provide to your customers – whether you sub-contract them under your own business umbrella or provide clients with the direct connection. The best partners will allow you to do everything for your customers “under one roof.”
This one roof is also known as a virtual company. You live in Boston, one partner works in Chicago, and your customer is in Rhode Island. You’re creating a virtual company of select partners with specific expertise that complement your own, and providing the whole package to your client. As a result, you expand without adding overhead, allowing profits to positively impact your bottom line. The beauty of this approach is that you get the job done for your client, who doesn’t really care who does the work. Meanwhile, you build your worth to the customer who sees you as a valuable resource.
So how do you go about finding the right partners and building your own successful network? If you’re small, start by looking at your own business and services and then examining the needs of your customers. Where are the gaps? What does your customer need that you can’t provide because you don’t have the expertise or resources? Once you discover those customer needs, search for companies that offer those particular services, and partner with them to offer one complete package for your customers.
For example, an independent software vendor (ISV) writes a software package in-house. They also realize that a software package is useless without a hardware platform to run on. They now dig deeper to determine what hardware elements will be necessary to run the software, then do a global search to find hardware resellers that can run the software. The ISV then partners with this hardware partner to resell their software.
Another hardware VAR developed a software package specifically for their end users and then actually partnered with other hardware vendors to sell the software. They aligned with partners that would complement their products and services.
However, a word of caution as you create this web of partners. You must define your relationship with your partners before conducting any transactions with your customers. This is critical. It places ownership on your partnership and also defines your contractual relationship with your partners and customers clearly and upfront. For example, your partner is in New Hampshire selling software for a Detroit customer. Before you proceed, you need to ask about pricing. Is there a discount? If so, are you and your partner splitting the discount? What about selling margin? What’s the split between everyone in the network? What happens when the customer changes his mind about the software or support that he wants? How will this translate into your partner arrangements? What about support? Who is responsible for providing support to the end user? Is it you? Is it your partner? Make sure you establish the working relationship ground rules before you explore opportunities together.
You also must be absolutely certain that your partners will provide the level of service that your customers expect (and are accustomed to receiving from you) based on what you provide them. For instance, how do you make sure that this new software is installable? Does it come installed in the partner’s hardware? Or, if it doesn’t, do you then need to go and find another partner in your customer’s geographic area that can install the software into the equipment? Having a network of partners is a huge trend and an amazing resource, but it’s imperative that all partners are clear on who owns the customer, how financial compensation will be broken down, and ultimately who is responsible. In other words, if the customer has a problem, who do they call? They need one number and one contact. Make sure everyone is clear on who owns the account before you get started down the partnership path.
By choosing the right partners, you can grow your business using resources regionally and nationally, save on overhead, and ultimately provide your customer with one stop shopping for their services. With all these services now bundled for your customer, you will reap the benefits of this desirable partnering relationship, resulting in less overhead, but more importantly, greater profitability.
A dedicated marketing professional, Michelle Kabele has been helping technology companies develop award-winning channel partner programs and marketing strategies for over 10 years. Michelle has worked extensively with small businesses throughout North America.
Michelle has an MBA from the J.L. Kellogg Graduate School of Management (Evanston, Ill.)
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