The 'Worst' Channel Vendors
Candid anecdotes shared by VARs in our channel vendor survey reveal several 'worst practicesâ€™ you should avoid.
Business Solutions, January 2009
We garnered nearly 18,000 votes after asking our subscribers to rate their vendor partners on a scale of 0 (worst) to 5 (best) in seven categories (read more on the methodology used by clicking here). For the following quotes, we've removed the names of the vendors and their products and replaced them with generic information, such as 'ABC Company.' Why? Because, while these comments can be both surprising and entertaining, we're presenting them to you for neither outcome. Instead, our goal is to help VARs and vendors alike learn from the 'worst practices' identified among these candid comments. The majority of the comments can be categorized into one or more of the following groups:
Partner Program Issues
Customer Service/Support Issues
Direct Sales/Margins Issues
One final note before you start perusing this cornucopia of negativity: The positive comments we received from this survey far outweighed the negative.
Partner Program Issues
When you sign on the dotted line for a partner program, read the fine print — and ask lots of questions. Many of the survey comments criticizing partner programs allude to the vendor doing something the VAR didn't know could happen. For instance:
"We brought ABC Company into a deal, registered the deal with them, and worked on it for several months. In the end, they gave the same special pricing to another VAR. And, to top it off, this other VAR had unsuccessfully been trying for months to sell ABC Company's competitor's product to the customer. They also call into your customer without letting you know, schedule meetings without you present, and reduce your value in the account."
"ABC Company has a very attractive incentive program at first glance, but it was so complicated to try and redeem payments that it wasn't worth the effort. As far as I'm concerned, having no program would be better than a program that took so much time and paid zilch."
Find out how the partner program was developed and how changes are made. For tiered programs, make sure you understand the intricacies of the levels of which you won't be a part. That way you can understand the advantages your competitors have by being in those other tiers.
"They seek little input from their channel, their internal systems are very cumbersome, and the cost of doing business with them is extremely high."
"ABC Company is my worst ECM vendor because they are not channel friendly to smaller VARs."
There were many comments pertaining to the sales reps/managers who are supposed to be helping channel partners. Ask your vendor about the tenure and the experience of these support personnel. Is that staff also responsible for large direct sales? Because these are going to be your direct contacts with the vendor, make sure you meet them before signing up to see if you have chemistry. That step could eliminate many future headaches.
"Registration [of resellers] is a joke. They let their reps approve or disapprove registration based on their friendships with other resellers."
"My sales rep got upset because I had not ordered more often from him. He said he had overstocked with inventory just to satisfy my needs, but I was not being reciprocal! He said I had to redirect my purchases through him since he was the most knowledgeable. What an arrogant [expletive deleted]!"
"ABC Company is extremely difficult to work with over time on the sales side. It is very hard to find anyone that will take responsibility for making things actually happen. They change answers and positions on sales opportunities seemingly on a whim."
"Our dealer rep is five miles from our office, but he has NEVER stopped by to introduce himself! We stopped selling their stuff because we cannot get support on it!"
"I placed two orders with ABC Company and asked for overnight delivery and neither order shipped, leaving us in a lurch. I later called and spoke with an ABC rep and set up a meet-and-greet to discuss the issue. Even though I confirmed the appointment, the rep never showed up. This went on for a month or two, so we decided not to waste our time on the company. A business partner of ours had the same experience. We were treated like it didn't matter if we did business with them or not."
Training is another component of a partner program that you should evaluate. Don't just accept a vendor's word that they offer training; ask for the details. What does it cost? What certifications do you have to maintain? Do you have to travel for training or is it available over the Web? What self-study courses do they offer? How quickly is training offered for new products or services?
"The company's website is horrible. Even its own staff can't navigate the maze. Training is even worse. Course content is outdated and difficult to find, and the cost is prohibitive even if you can find the training."
"I like to employ the best technicians in the business, but I don't want them in training more than they are helping a customer."
Customer Service/Support Issues
When you sign up with a new vendor, you might not think about repairs or support for products — you're thinking about how you can make more sales. But no matter how 'great' a product is, something is bound to go wrong sometime, requiring you to contact a customer service rep (CSR) or take advantage of that great support so many vendors tout. Again, find out the details. Do they outsource service or support? If so, how are those people trained? What's the average amount of time for a repair? Do they offer a 'hot-swap' type of program that will provide your customer with a new model overnight? As you can see from some of the following quotes, a bad CSR can quickly create a very negative opinion of a vendor.
"Even with maintenance contracts, the [CSRs] I spoke with were aggravating and did not have pleasant, helpful attitudes."
"They said every issue was our fault, never theirs. They are rude to deal with and have developed a superiority complex."
"Not only do their customer service people become combative with our customers, their management is far worse than anything I've seen in any other company."
"If you try calling in for support you reach Russia, they never give you instant support, and they never have the answer — it's always a call back. When you are on-site and a client's system is not working as it should, do you think you have the luxury of waiting for someone to call you back? It is ridiculous to think that they can do this."
"Their software support consists of blaming issues on hardware instead of trying to find a solution. During interactions with their support, the support technician was short and had an air of condescension."
Remember, the service/support departments of your vendors are an extension of your company. Often, your customers don't distinguish between the two. If a customer has a bad experience when calling a vendor for service/support, you're going to get blamed, and that will hurt your future sales with that customer. Furthermore, if you're on-site and you're unable to reach the service/support line or not getting the answer you need, your reputation will be tarnished.
"They can't provide schematics for the products they sell, which makes it hard to support the end user! Their 'solutions' to our problems always seem to involve sending in the equipment for repair, which doesn't always work for our customers!"
"Only after numerous phone calls to many people in different departments and slamming the phone down in TOTAL FRUSTRATION was I able to get part of the information I needed. I wouldn't recommend them to my worst enemy."
"ABC Company's support is absolutely horrifying. Their excellent ABC device is backed by an extraordinarily consistent lack of support. Try calling support. Try asking for a software driver. You can't even count on getting back the device that was sent for repair. It's like they aren't even trying."
Direct Sales/Margins Issues
There's nothing that infuriates a VAR more than a vendor that usurps a sale with its direct sales force. You probably have your horror stories of how this happened even after your vendor pledged it never could. Know the rules of engagement with all of your partner programs. Make sure you're being informed in a timely manner of any changes to these rules, and demand some type of satisfaction for such actions. Otherwise, it's just going to happen again.
"Their sales personnel cannot be trusted not to take customers direct."
"ABC Company swipes deals from VARs and takes them direct. They are an extraordinarily treacherous organization. Their culture is that of a tiny firm with a huge chip on its shoulder, or perhaps it is arrogance since they are uniquely positioned."
"They bite the hand that feeds them in the worst way, especially by calling on VAR customers direct and selling direct, even when they know it is a VAR customer."
"It is very difficult to make money on their software with their 'anyone can call everyone's customers' approach."
As a member of a partner program, you should understand how and when your vendor can or cannot contact your customers directly. Sometimes a lost sale to a vendor isn't a result of an ambitious direct sales rep visiting your customer, but instead it's a simple email message from that vendor.
"When we used to sell their product, they would compete directly with us. We would go demo a product and get ready to close the sale, and they would send a coupon to the prospect and undercut us. Worst channel program I have seen."
"We sold ABC Company's product to several of our customers, and they force you to enter the customer's email address [boy were we naÃ¯ve]. Near renewal time, ABC automatically sends out a notice [that's good] and a quote [that's REAL bad]. And, the quote to the customer is the same price that we get; there's no way to compete at all. They don't even quote list."
"We are contacted only when a really difficult or poor lead needs to be passed on to avoid wasting their time or because professional services are required. I had a regional sales manager for three years that tried to starve me out of business. They say they have a channel program, but they only tolerate VARs. They conduct covert email campaigns [in which VARs cannot participate] offering lower prices to existing customers."
And of course, there were the comments regarding poor margins.
"Several times these manufacturers have even priced their quotes under our purchase prices as a reseller, which makes us look like we are ripping off the customers. So, in addition to losing projects, our reputation is being damaged."
"ABC Company has become one of the WORST profit margin product lines today due the company allowing Web-based resellers to undercut our margins."
"Their margins are excellent if one enjoys selling at street prices."
When evaluating a vendor on product quality, do what you do when making a large purchase — check references. Ask for a list of user references, read reviews online, call existing resellers. Doing your due diligence upfront can eliminate embarrassing conversations later with your customers about why they need to upgrade again so soon, for instance.
"Every software update seems to cause more problems and cost us time and money."
"ABC Company's managed services application is by far the worst piece of crap that has ever been sold. I don't believe what a lousy piece of software it is."
"This stuff is so antiquated it's not even funny. Their partner plug-ins don't even work."
"ABC Company's product had operational issues, and the correction was a new version you had to purchase. A three-hour hold on their tech support was a clue to the seriousness of these issues. They claimed I was the only site with this problem, but I found out they told that to at least four other channel partners!"
Aside from providing a few chuckles, I'm hoping VARs see the valuable tips this type of information offers. Furthermore, vendors should use this information to investigate whether they have room for improvement regarding some of the topics the VARs have mentioned.