Companies are always looking for ways to sell more products and close deals faster.
Many organizations are turning to Value-Added Resellers – or VARs – as one of their channel marketing strategies in order to help them achieve these goals. Having a full understanding of what a VAR does, the challenges they face, and the opportunities to support these relationships will help organizations get the most out of their VAR partnerships.
Value-Added Reselling is nothing new, but in the constantly changing world of modern sales, the strategies that lead to success with VARs require frequent evaluation. That’s why we’ve put together this information to help you decide if VARs are right for your company and how to optimize those relationships.
What is a Value-Added Reseller?
A Value-Added Reseller (VAR) is a business that purchases a product from other companies – usually within the IT industry – and adds value by bundling it with additional products or for the purpose of reselling.
The added value can take on multiple forms depending on the VAR company. Some typical value-adds include creating unique software products to go with a piece of hardware, setting up a product, or offering professional services.
What does a VAR do and how do they work with partner companies?
One of the most common ways VAR companies work with partner businesses is by creating applications for specific hardware products and selling both as a turnkey solution. In this example, an Original-Equipment Manufacturer (OEM) would have created the hardware while the VAR business adds the value of the application.
Another common VAR strategy has been to sell a product and include professional or training services like consultation, strategy, design, or implementation in order to add value to their customers.
While many VARs continue to use versions of these two models, the industry has changed in recent years, forcing VAR businesses to construct new strategies.
For example, VARs of the past could help their customers navigate the software products they’ve purchased as an added value. They’d walk them through the technological make up and product features. These days, however, most customers don’t require such services. That “value-add,” therefore, is not really all that valuable to the end-users.
This has led to a new trend with VAR business models. Today, most VARs look to add value to the original product by offering long-term solutions that help their customer base increase revenue.
Let’s look at an example to make this a little more clear. Say some engineers create an awesome piece of accounting software, and they want to sell it without becoming a full-blown SaaS (Software as-a-Service) company. They could pair up with a customer-focused VAR with teams dedicated to implementation, customer experience, and technical support. The VAR buys the software and bundles it with their various solutions to add long lasting value to the customer.
What’s the difference between VARs and Channel Partners?
VARs often only make up a part of an organization’s partnership strategy. Another common strategy involves “channel partners,” and while these share some similarities with VARs, it’s important to understand their differences as well.
Channel partners usually have a more vested interest in the parent company than VARs. They function more in the traditional sense of “partner” in that they come alongside the parent company to build something larger together.
VARs are more independent. They still function as partners, of course, but in a different sense. They share goals and some strategies, but the value added by a VAR comes from the VAR business itself, not necessarily in partnership with the parent company.
The difference is subtle but crucial. Channel partners basically come alongside the parent company to build something together while VARs purchase something from a parent company and add value so they can utilize the product of the parent company but remain their own entity.
Sales challenges VARs are facing today
As the modern sales experience continues to evolve, so too must the modern seller (or reseller, in this case). New difficulties will always arise, but recent trends point to a few specific challenges partner companies should be aware of for their VARs.
1. VARs now have to compete with vendors that are engaged in direct sales
Many vendors have recently tried to cut out the VAR middleman by focusing on direct sales, forcing VAR businesses to reposition themselves as they compete with OEMs.
2. Customers expect price transparency
Hardly any customer in the digital age will even have a conversation with sellers if they don’t know prices. With online comparison sites or review platforms, VARs must have a keen sense of their competitors’ prices and find ways to beat them.
3. Software has become easier to use and more intuitive
This challenge specifically affects VARs that position themselves as solution providers. A few years ago, the need for training and setup left a big hole for VARs to fill. Today, most software companies make it very easy to learn their programs, forcing VARs to come up with new value-adds they offer.
4. Cloud computing and hosting solutions have moved from private to public
The VAR business model that offers customers storage on a private cloud is no longer as effective today. Many large and small businesses have moved to public cloud hosting options that are much less expensive and incredibly easy to use. These companies simply just don’t need the cloud computing add-ons that many VARs used to offer.
5. SMBs don’t want point-solutions. They want growth.
SMBs have one major concern that fuels everything they do: growing and scaling their business. Successful VAR businesses, therefore, will align their value-adds with this goal and show how they can help potential partner companies close more deals with greater efficiency.
How to help VARs improve sales
While these challenges certainly exist in the modern sales environment, VARs can still overcome them and bring tons of value to partner companies when set up for success. Companies that focus their energy on helping their VAR partners succeed will see improved sales and better returns in their VAR strategy.
Here are a few specific ways partner companies can help VARs improve their sales:
1. Automate the lead management and lead distribution process
Lead Management is the process of acquiring, tracking, and managing prospects in order to more efficiently convert them into customers. When done poorly, this causes prospects to slip through the cracks of an ineffective process. Leads get sent to the wrong channel. Sales get missed. And sellers get frustrated.
When done well, the opposite outcome happens. Sellers target their energy only on the best leads, leading to higher win rates and less time wasted on unqualified companies. The ability to win more customers and focus on what they do keeps them motivated to continue with their success. The same thing is true for VARs.
To optimize their success and keep the relationship flourishing, partner companies must constantly distribute the right leads in order to achieve a positive ROI for everyone involved.
But doing lead management and distribution well doesn’t come easily. It requires strategic processes that, if done manually, can take a toll on an organization. Sales and marketing teams end up sifting through spreadsheets or CRMs and reviewing each individual lead to send them to the right seller and channel. It’s not impossible, but it sure is challenging, time consuming, and costly.
Automating this process enables organizations to avoid such monotonous tasks so their sales teams and VAR partners can focus on what they do best: getting customers to purchase a product.
An effective and efficient lead management and distribution strategy requires teams to get rid of the spreadsheets, the manual reviews, and other burdensome administrative tasks. Automation makes all this possible while also improving the end results.
2. Match the right leads with the right VAR for conversion
Lead routing is an important part of any organization’s sales strategy, but it becomes even more valuable for those that partner with multiple VARs.
Many organizations work with a variety of VARs as part of their larger sales and marketing strategy, which allows for better reach and market saturation. However, it can also create complexities when it comes to assigning leads.
Each VAR brings different value-adds to the original product, so some leads will not fit each one. Assigning a lead to the wrong VAR or assigning the wrong lead to one may result in the loss of a prospect that would have otherwise become a customer had it encountered a value-add that fit their needs.
The organization partnering with the VAR can solve this by routing the right leads to the right seller everytime. This ensures that the VAR only spends its resources on the prospects who are most likely to appreciate their unique value-add.
Adopting sophisticated lead management software can help organizations improve their lead routing. Automated processes promote quick and easy lead routing, and the highest performing lead management solutions utilize AI and other technologies to score leads and assign them to the appropriate seller.
Without a proper lead routing strategy and solution, organizations are more likely to see well-qualified leads slip through their fingers simply because the prospect got assigned to the wrong seller. Developing a lead routing strategy and adopting the right technology will ensure that every lead gets sent to the right VAR every time.
3. Ensure that sales reps follow up with leads within minutes, not hours or days
Timing is everything in the modern sales cycle. Even if an organization provides their VAR partners with great, qualified leads, there’s still a chance they’ll lose that prospect if they don’t get to them fast enough.
Reps who have the right lead at their fingertips can’t hold on to it for hours or days and let it go stagnant, and organizations have the power to ensure that this never happens. If the ideal VAR can’t respond to a lead in a timely manner (say ~30 minutes), the partner company can develop a system that moves that lead to a type of shark tank where other VARs that have the ability to respond can take the deal and make the sales.
A strategy like this enables sellers and partners to stay on top of their leads and requires the right tech stack to make it happen. Once all the tools are in place, though, VARs can respond to the lead almost immediately after they’ve shown interest, when the product is still at the front of their mind.
Having such timely response will help the VAR, and the partner organization, stay in front of customers and ahead of the competition.
4. Avoid controlling VAR workflows with complex CRM software or partner portals
Getting teams to adopt software often ends in frustration and disappointment for the organization’s leadership. They spend tons of money on some really nice piece of CRM software or partner portal only to have their sellers and partners halfway use it with no enthusiasm.
Adding another piece to their tech stack requires them to dedicate more of their time working as data entry clerks instead of sellers.
For sellers, it’s usually something they cram in as they approach a review or sales meeting like a freshman before midterms. VARs experience even more frustration because they often have additional software platforms to navigate. Training also becomes a struggle as sellers need to learn a whole new platform in addition to the ones they’ve already adapted to.
Organizations can help ease this burden if they stop trying to own workflows and inputs they can’t control. Instead, they can integrate with VARs’ existing workflows and technology by using simple technology like email and SMS. Adoption of new software becomes unnecessary because everything gets moved into the platforms team members have already learned and use regularly. Sellers get the benefits of a CRM without all the frustrating tasks that come with adoption.
5. Ensure successful Partner Relationship Management (PRM)
VARs function as an organization’s partner and an extension of that organization’s sales team. They shouldn’t be treated as some disattached and forgotten piece of the puzzle. They bring value to your organization, and building great relationships with these partners can lead to further success for both the VAR and the partner organization.
Managing these relationships can be tricky, though. That’s why a ton of Partner Relationship Management (PRM) tools have shown up on the market in recent years. With such a variety of options, organizations may struggle with deciding which solution fits their needs best.
Keeping up with your VARs and other partners helps promote long lasting and mutually beneficial relationships between your organization and their business.
How to Optimize VAR Sales With the Right Tech Stack
Like any helpful sales strategy in the modern world, organizations want to pick the right technology solutions. Decision makers will want to find tech that can respond to the challenges in front of VARs by helping them optimize their sales process.
The right tools will include:
- Automated processes
- Effective lead capturing
- Real-time lead management
- Sophisticated lead routing
- Intelligent lead scoring
- Timely outreach capabilities
- Detailed analytics
- Easy integration
Who can help?
Lead Assign is positioned as the go-to software for organizations looking to help their VARs sell more and close faster. Our real-time lead management solution utilizes AI-based lead scoring and routing to distribute leads to the most qualified rep for the deal. Calculate how much more Revenue Opportunity you can generate from your marketing leads by implementing lead management.
The platform easily integrates with multiple CRMs and partner portals so your partners don’t have to adopt any more software. Leads get sent to the right rep through texts or emails, making it easy for sellers to reach out within minutes. Eliminate the waiting period for your sales reps to update your CRM. Send a test lead and see how.
If you want to hear more about how Lead Assign can help your VARs sell more and close faster, we’d love to talk with you. See your potential success with the Power of Automation or Schedule a Call with one of our specialists to get started.