I wanted to take a look back and share some things I have observed as a sales manager at a VAR over the last 18 months. The intention is to help everyone leverage THEIR partner to the fullest extent and maximize on the value they can bring. They’re just trying to help. Really.
First, what is a VAR? I prefer the term partner because it connotes a sense of team, but a VAR is a Value Added Reseller. Partners resell a manufacturers widget and add some sort of value along the way. In the datacenter infrastructure industry, that value is experience. The experience with the install and configuration of the hardware. The experience putting together configurations that fit the requirement of the customer. The experience working with the ordering systems and eliminating the overhead associated with administrative roadblocks. The experience of supporting the systems when they fail. The experience of suggesting novel approaches for getting the most value from the systems. The experience learned from installing, operating, maintaining, and migrating hundreds and thousands of systems. Experience that few customers and fewer manufactures have. That experience is valuable and it doesn’t cost as much as you think.
Manufacturers need partners for leverage. They need to leverage an extensive network of relationships to help get face time in an ever increasingly competitive environment. Partners bring those relationships to the table and in many cases avoid unnecessary cold calling that simply frustrates both parties. They also need partners because of the experience mentioned earlier. My only job as a sales person is to sell my widget and then move on to the next widget. The challenge is that if I leave a trail of disgruntled clients in my wake, I’m only ever going to get one shot at it. Partners can help bridge this divide by ensuring that the relationship with that customer and the relationship with that widget stay healthy. This allows the manufacturer to go back to making and selling more widgets. Those engineering resources can be leveraged for more R&D which ultimately means better widgets. If instead, those engineering resources were exhausted ensuring success with every deployment, something else up or downstream would suffer. Partners, fill these two gaps of scale, and experience.
Partners need manufacturers for reputation. I have worked at both big and small partners, and in every case, the quality of the product we resold is what established our credibility in the market. When you represent best of breed, you infer that you are also best of breed. Partners need that reputation to expand their relationships with ever increasingly larger clients. You can’t just wake up on a Tuesday, ring up a Fortune 50 company and walk in the door and start selling them widgets. It takes months and sometimes years to create an entry into the business and partners frequently leverage their manufacturers relationships to create an initial touch point. If you are coming to the table with a relatively unknown product from a company that doesn’t have an established reputation, this initial process is made even more difficult. So there is a host/host relationship between partner and manufacturer.
Clients need partners for clarity. There are more and more options that IT must evaluate everyday. This is on top of the endless sea of fire that must be navigated just to get to 5:00pm. It is not reasonable to expect anyone in an IT organization to have the kind of expertise in a specific product that is required to fully compare widget A to widget B. Partners do. And partners can help bring that clarity right into the IT organization. If you can leverage your partner effectively to build a wall between your organization and the multitude of manufacturers in the market, you can focus your efforts on dousing the flames in the roiling sea, and get back to more enlightened tasks like updating your companies iPhone App, or rolling out that new product release. Let your partner validate the offerings from the thousands of manufacturers out there and bring you the best of the best to make your own decision.
Shifting the conversation, it’s important to understand what happens behind the curtains with both sides during the sales process. How does everyone get paid? Manufacturers usually have shareholders, and the board wants to see revenue. Ultimately, profit matters, but sales are what gets people excited. You have read about companies that are reporting “sustainable losses” that are still selling shares by the millions. Why? Because they are driving revenue. And enough revenue will eventually mean profit. Partners only care about profit. In most cases, they are not beholden to a board, and every dollar of profit or margin that they make is one dollar they can put back into the business to help it grow. The secret is that neither of the motivations really affect the price of your widget. The partner and the manufacturer know that they have to help each other out without affecting their clients. It is an open world these days, and client A knows what client B paid for their widget. The rise of buying co-ops and vendors that specialize in purchasing negotiations further ensure that everyone comes to the table with the best deal in hand. Now let’s be clear, the clients wants to pay as little as possible, while the manufacturer wants to charge as much as possible. All the while the partner is trying to show enough value to merit their small sliver of the pie. It’s a game that we play, but it’s a game that doesn’t need to happen. Open up the dialog. Ask for a negotiated discount from your manufacturer. Ask for a standard markup from your partner. Get the money question out of the way first, so you can focus on the important question. Will this solve my problem?
Manufacturers and Partners are both trying to answer yes to that question. They are really just trying to help. Really.