By John Pearring, Vice President of STORServer, Inc.
The biggest threats to a channel-focused distribution model come from the same “value” elements manufacturers and vendors rely on when choosing a channel model in the first place. Value-added resellers (VARs) provide folks like STORServer some very specific capabilities that are essential to success at the end of the sales process. I call these value features, the “channel success triangle.”
The three vital elements for a channel are: staff, customer base, and product focus. If the channel partners that a vendor uses are missing any one of these components, a strategy meeting is called and sales consultants are invited to revisit the entire channel concept.
Staffing. First on the list for vendors, though seldom admitted openly, focuses on the huge staffing advantage of a channel strategy. A vendor’s reliance upon a channel’s built-in staffing makes up the largest investment in their operation. Channel VARs bring immediate resources to the field. Sales and sales support staff form the foundation for value to a manufacturer. When readily available sales-trained teams thin out or switch to other products, vendors become very uneasy.
Built into the channel sales teams come all the other VAR benefits. Trained staff, managed sales teams, geographic presence in the field, and sales experience cannot be easily built. The entire benefit of the VAR centers on capable staffing.
Customer Base. The second point in the channel triangle is the customer base. Many VARs expect that their vendor partners provide the best resource for leads, and that is certainly true. The maintenance of those customers, however, plays a much bigger role for a vendor. Vendors need channel partners for the vast digital Rolodex of folks who rely upon VARs.
Periodic changes in VAR importance for customers sends tremors through the channel plans of vendors. Without the ear of customers, VARs become useless. Worse, they panic. Vendors cannot easily repair customer indifference to VARs when it happens.
Product Focus. Finally, product focus identifies the best VARs. Those who know their field — such as storage, data protection, virtualization, etc. — tend to maintain excellence in almost everything vendors are looking for. Vendors want more than general IT intelligence. Vertical channels are fine, and extremely important in arenas like federal spaces and some other industries, but more important is the almost consultant-like focus provided by a VAR who knows their technology.
When VARs repeatedly broaden their technology horizons, vendors wring their hands in fear.
By John Pearring, Vice President of STORServer, a leading provider of proven data backup solutions for the mid-market, selling exclusively through the channel. As STORServer president from 1995–2008, Pearring built the original OEM alliances and e-business infrastructure for the company, www.storserver.com.