want an effective reseller channel? put yourself in the VAR’s shoes


Want to build a fierce reseller channel?  you need to put yourself in your VARs shoes, and build a plan that works for their business.

Here’s a nice dream: you come up with a killer idea for a great software product, spend a bunch of time and money building it, publish a few articles, and start calling up some VARs and telling them about your solution. They are so amazed and excited by your ingenious product that they line up to sign onto your VAR program, grab a demo kit and run out to their customer base selling your software like it was a Platinum Edition of the iPhone.  Then you wake up.  Yes, it was just a dream, and now you are  back in the real world where even you’re grandma won’t return your calls (and she works for a reseller)

When you make a decision to sell your software through a VAR channel, the very first thing you have to do it put yourself in the VAR’s shoes (actually it’s the second thing, the first thing should be the customer’s shoes, but that’s a topic for a different post).  Here’s the thing – VARs are in business in order to make a good living for themselves and to make their customers happy.  Many VARs that I’ve worked with over the years and that turned out to be good friends have mentioned to me off the record how they are still surprised about how many vendors simply don’t get this fact –  VARs are not there in order to fund the market penetration phase for you.  In fact, its quite the opposite – VARs are profit driven organizations that need to make money to keep themselves in business.  The vast majority are self funded organizations built from the ground up month by month, year after year, with the founders investing their own money, possibly taking out loans and mortgages in order to get their businesses through the rough times.  If a VAR starts losing money, he needs to lower expenses, to fire people, and to take less money home himself (they have kids too – and they all need college funds).  So if you are expecting the VAR to make a giant leap of faith and to invest a bunch of money in your startup solution before ever seeing a return – think again.  Just like the VARs, if I were in their shoes, all I would be looking for are products that fit my customer base, that solve my customer’s problems, and that can help my business grow.

Another key issue – your software is not in a vacuum.  Whenever a reseller is considering adding a new product, they are faced with a set of products/vendors they can choose from, all knocking on their door. The selection process will pitch products against each other, trying to determine which product can contribute the most to their customer base, their business, and holds the greatest promise for a good reselling future.  In order to make this analysis, any reseller will ask himself a set of questions to make sure that they are choosing the right product and the right company behind it.  You need to ask yourself these questions too, and to provide solutions to all of them.  The company that can really put itself in the VARs shoes and ensure that they make the VAR the happiest has the best chance of being chosen.

Here are some considerations that a reseller will make before taking on a new product:

Growth & promise

  • Who is the company behind the product, and is this the next “great thing”?
  • How can this product provide a stepping stone to increasing my customer base & my business?

Product sellability & profitability

  • What problem does this product solve for my existing customers and how much of a burning issue is it?  Are my customers asking for such a product?
  • Is it easy to sell?
  • How long & heavy is the typical sales cycle?
  • What is the typical sale size & profit margin?

Team & compensation

  • How do I compensate my sales people on selling this product?
  • What resources & skills will be required to make the sale?  will I need new hires and if so what will they cost?
  • How much training will we need (sales, technical)?

Headaches & risks

  • What will it take to implement the product and will the work be profitable?
  • How much support will be required after the implementation?  How much of it will be billable?
  • What are my risks?  Will this company stay in business? Is this product going to crash left and right? Will I lose money and face because of this?

Comparative

  • Am I better off selling this product or a different one?

If you are serious about caring for your VAR, you can build your channel program in a way that will make the VAR profitable with great business growth prospects and less risk, and of course provide good answers to these questions. So get ready to show your VARs some serious love and build a partnership that will last forever; the first step is putting yourself in their shoes

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  1. Benny,

    I think you put an excellent list of questions.

    If you think about successful, channel, the excellent materials to read are from Jeff Ray about SolidWorks VAR model and channel.
    http://www.forentrepreneurs.com/lessons-from-leaders/solidworks/

    Best, Oleg

      • BennyShaviv
      • February 2nd, 2010

      SolidWorks has certainly put together a terrific partner program. I had the fortune of working with many SolidWorks VARs over the years at different phases, and I heard it from them also. They always made the point that SolidWorks made sure to care intimately about their VARs and their business, through thick and thin. It was driven with a “wholistic” approach & model that made the VAR & solidworks partnership very profitable. Great program & great company from early on.

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