Q&A: VAR Programs
Representatives from eight prominent vendors answer questions about VAR programs.
1. How do VARs qualify to be in channel programs?
3Com Corporation, Debbie Newcomb: A VAR's revenue, expertise, service and support capabilities, and certifications are just a few of the criteria that may determine a VAR's qualifications.
Fargo Electronics, Mark Anderson: VARs add value by providing professional technical support, sales, integration and marketing strength, along with sales volume. These all help VARs qualify for channel programs.
HP, Susan Reynolds: In general, VARs/partners usually qualify to be in channel programs based on two sets of criteria. First, the actual or committed revenue for the vendor's products and/or partner's allocated resources available to promote the vendor's products measures a partner's commitment. Second, a partner's core competency is measured by the number of trained and certified representatives for the vendor's products or for specific industry- recognized standards.
Logic Controls, Peter MacDonald: Vendors may look to see if a VAR's target markets are the same as the vendor's or how much business the VAR does in a vendor's line of business. Also, whether the VAR has adequate expertise to sell, install, and configure a vendor's system may be a consideration.
Network Appliance, Leonard Iventosch: Qualification can be based on the amount of commitment and investment the VAR is willing to make toward the vendor and the VAR's potential to drive incremental revenue in a vendor's target market.
Texas Instruments RFid Systems, Tammy Stewart: The VAR should have success in their field of expertise, a business plan that includes the vendor's products, and a willingness to expend resources for up-to-date training.
2. How are VARs categorized in channel programs, aside from expected sales revenue?
Fargo Electronics, Mark Anderson: VARs can be categorized by how they go to market, what expertise they bring to the table, and how close a partnership they are willing to have with a vendor.
Fujitsu Computer Products of America, Scott Francis: The vertical markets they service or the specialized applications they offer can categorize VARs.
Network Appliance, Leonard Iventosch: VARs can be categorized by technical expertise, training, and certification. Other determinants include their ability to provide total customer service and support and cover target markets not covered by vendor or other channel partners.
Texas Instruments RFid Systems, Tammy Stewart: VARs are categorized by application expertise, geographical location, geographical scope, and technical expertise on vendor product. Subjectively, VARs are also viewed by their ability to manage projects, work with the vendor's sales team, and provide prompt follow-up to any sales leads.
3. What is the most important feature VARs should look for in vendors' VAR programs?
3Com Corporation, Debbie Newcomb: VARs should look for a channel program that offers sales and marketing tools, incentives, training, and sales support to help a VAR successfully sell a manufacturer's products/solutions. VARs should see tangible results (e.g. financial benefits) as a result of taking advantage of a vendor's VAR program.
Fargo Electronics, Mark Anderson: VARs should look beyond the basic buy-sell relationship to what programs will bring them a competitive advantage. They should look for programs that build value and profit in their business, not just the latest promotion being offered.
Fujitsu Computer Products of America, Scott Francis: VARs should look for features that give the reseller an advantage when they lead with the vendor's product line. Also, it is important for the vendor to develop the VAR's business with qualified customer leads.
IBM, Michael Borman: First, VARs should partner with vendors that will not radically change their levels of commitment to VARs. Next, VARs should look at the co-marketing investments being made by the vendors. It's nice to get good rebates, but creating demand is really where a VAR is able to rise above the rest. Finally, they should take a close look at a vendor's education and certification programs. Understanding how the products and services from a vendor fit into an overall solution makes closing sales much easier.
Logic Controls, Peter MacDonald: Training, technical and sales support, and product information from the vendor should be the most important features a VAR looks for. A VAR needs to be able to make the right decision on which products to propose to their prospects, and then they must be able to efficiently install and configure the systems. Only with strong training and information exchange with their vendors will a VAR be able to competently handle these key activities.
Texas Instruments RFid Systems, Tammy Stewart: VARs should look for a demonstrated high level of communication between the vendor and the VAR. This could include advance notice of new products that will benefit the VAR's business or quick answers to the VAR's technical and sales questions.
4. What should VARs look for when it comes to marketing offerings from vendors?
3Com Corporation, Debbie Newcomb: The VAR should look for marketing programs and tools that help the VAR develop leads with their installed base and prospect for new opportunities. The marketing programs should be cost effective (or subsidized) and easily customized.
Fujitsu Computer Products of America, Scott Francis: VARs should look for strong corporate marketing that develops brand awareness and stimulates product demand, creating marketing visibility. Also, vendors should offer trade show and industry conference sponsorship and participation to generate leads. Finally, they should expect trade show support, product presentations, and related sales and training materials as marketing tools.
HP, Susan Reynolds: VARs should ask themselves four important questions. First of all, in addition to the compensation for selling the vendor's products, is the vendor helping me in generating demand and expanding my reach to new customers? Secondly, is the vendor providing "easy-to-use" marketing and sales tools for me to create marketing campaigns? Also, does the vendor's brand create a pull in the marketplace that I have focus on? Finally, does the vendor have the executive commitment to marketing and sales support for channel partners?
IBM, Michael Borman: VARs should look for vendors that offer more than brochures or computer-ready art. VARs need to see if they offer a design tool that allows them to incorporate their name into an advertisement. Also, VARs must ask about mailing and outbound telemarketing discounts - vendors often get bulk deals from suppliers and can pass the savings on to business partners.
Logic Controls, Peter MacDonald: One of the best ways vendors can help VARs in their marketing efforts is by highlighting key VAR partners in public relations activities. Also, VARs should expect to be displayed on the vendor's Web site and participate in marketing events to help generate demand.
Network Appliance, Leonard Iventosch: VARs should look for easy access to information and sales tools, targeted lead-generation programs, value-add service integration opportunities, and joint funding for field-level marketing activities.
Texas Instruments RFid Systems, Tammy Stewart: VARs should have the opportunity to be included in trade show activities, press releases, jointly managed seminars, and vendor's Web site/partnership programs.
5. What kind of value should VARs expect from vendors with VAR programs?
3Com Corporation, Debbie Newcomb: The VAR should see a positive impact to their business as a result of being in a vendor's program. This could include access to information or training, more in-depth knowledge about the products, financial incentives that help the VAR's bottom line, or sales and marketing support to help the VAR close business.
Fargo Electronics, Mark Anderson: Programs should help differentiate VARs from competitors and offer the VAR value-add opportunities. Opportunities to sell more new products to existing customers or help entering a new market are typical. They should also expect to build recurring revenues from these programs.
HP, Susan Reynolds: VARs should look for a program that will help them grow their top and bottom lines; reward their performance and initiative; and provide an efficient, flexible, and integrated channel program.
IBM, Michael Borman: Value can be measured in many ways. While financial incentives are important, it really is about the enablement activities that go around the incentives that make the difference. VARs should take a close look at all of the programs and commitments vendors are making to improve VAR skills, profitability, and growth potential.
Logic Controls, Peter MacDonald: The key value to look for in VAR programs is whether VARs will get the information they need to prospect for customers, close sales, and implement systems. This information encompasses everything from product training, to technical support, to sales and marketing incentives. It is also reasonable for VARs to expect that they will get help in sales and marketing activities from their vendors.
Network Appliance, Leonard Iventosch: VARs should expect programs and products that create profitable new business, designed with consideration of the channel partner's business model. VARs should expect targeted education on high-return opportunities, superior communications, marketing and training programs, and formal venues for feedback between partner and vendor.