In the pursuit of selling more products and accelerating deal closures, organizations are increasingly turning to Value-Added Resellers (VARs) as a strategic component of their channel marketing strategy. A comprehensive understanding of the role of VARs, the challenges they encounter, and the potential for collaboration is essential for organizations aiming to derive maximum benefit from these partnerships.
Understanding Value-Added Resellers
A Value-Added Reseller is a business entity operating within the IT industry that acquires products from other companies and enhances their value by bundling them with additional products or through the provision of reselling services. The augmentation of value can manifest in various forms, such as the creation of unique software products, product setup, or the offering of professional services.
VAR Business Models and Evolution
VARs traditionally created applications for specific hardware products, selling them as turnkey solutions. Another model involved selling a product along with professional or training services to enhance customer value. However, the industry has evolved, pushing VARs to devise new strategies. Modern VARs focus on delivering long-term solutions that contribute to revenue growth for their clientele.
Differentiating VARs from Channel Partners
While VARs form a part of an organization’s partnership strategy, channel partners are distinct entities with a deeper vested interest in the parent company. Channel partners work closely with the parent company to collectively build something greater. On the other hand, VARs, while still partners, function more independently. Their value addition comes from their own business operations, aligning with the goals and strategies of the parent company.
Sales Challenges Faced by VARs Today
As the sales landscape evolves, VARs encounter new challenges that demand adaptation:
Competition with Vendors Engaged in Direct Sales
VARs face competition as some vendors opt for direct sales, bypassing the reseller. This necessitates repositioning for VAR businesses.
Demand for Price Transparency
In the digital age, customers expect price transparency. VARs must remain cognizant of competitors’ prices and find ways to offer competitive pricing.
Simplified Software Usage
Software has become more user-friendly and intuitive, reducing the need for VARs to provide extensive training and setup. VARs must innovate and identify new value-added services.
Shift in Cloud Computing Trends
The shift from private to public cloud hosting diminishes the relevance of VARs offering private cloud solutions. Adaptation to the changing cloud computing landscape becomes imperative.
SMBs Focus on Growth
Small and medium-sized businesses (SMBs) prioritize growth and scalability. VARs should align their value-added services with these goals, demonstrating how they contribute to enhanced deal closures and efficiency.
Enabling Successful VAR Partnerships
Supporting VARs and partners in achieving successful closures requires a strategic approach, starting with robust partner lead management systems. Organizations must stay attuned to industry shifts, adapt to changing customer expectations, and continually evaluate and enhance their support mechanisms for VARs.
VARs remain integral to channel marketing strategies, and organizations can unlock significant advantages by fostering strong, adaptive, and collaborative relationships with their Value-Added Resellers.
Whether you’re a business leader seeking to maximize the impact of your reseller partnerships or a VAR aiming to enhance your sales effectiveness, you can optimize your VAR relationships and unlock new dimensions of sales success.
