10 Quick Tips for a Successful VAR Channel Program
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1 1 10 Quick Tips for a Successful VAR Channel Program Improving sales efficiency and reducing the cost of sales is putting additional pressure on high tech companies to implement or improve their current VAR channel strategy. Developing a successful VAR channel strategy requires an analysis of your products to determine which markets and which VAR channel partners will work best. The ability to identify, manage and support a successful channel strategy can mean the difference between success and dominating market share or completely struggling with business performance and channel conflict. Before moving forward, think about the answers to these questions: Who are the target customers and which channels do they use to buy? Do you have a complete channel strategy that considers customers, channel, product and the company s needs? How does our competitor s channel strategy affect us? Do we have a goal (% of business) we want to go through the VAR channel in the first 6 months, 1 year? Do we have the infrastructure to support the VAR Channel programs? Do we have clear rules of engagement? The fundamentals of a strong strategy begins with the understanding of what is true to your business, what is distinctive about your company, and what is meaningful to your customers. Here are some other things for you to consider: 1. Alignment of Sales and Marketing This is the number 1 best practice for a good VAR channel implementation. If sales and marketing are not aligned and are operating as independent silos, then instead of launching a solid VAR Channel Program, you will be launching a solid (daily and painful) Sales Conflict Resolution Program. One of the most important examples of aligning sales and marketing strategy is to understand the details of your direct salespeople s compensation plans. Their sales compensation plans must reinforce the direction and behavior you want from them to support and work with your VAR channel. Also remember that VARs don t create new markets. VARs sell into established markets, further expanding and growing them. If you are a start up, sell your own products directly. It is critical to establish that the product works, and can be sold successfully. If you can t sell your own product, no VAR will be able to either. Test user price points, and build a reference account list. Only then should you begin to approach VARs.
2 2. Training with a Purpose 2 Training on all of your products, policies and procedures all at once in marathon session (s) is not the best use of anyone s time. What you and your new VAR partner want are results with minimum investment up front. The best way to do this is to train with a purpose. In other words, plan a meaningful customer engagement or event with your new VAR to force an interaction, structured with time lines and measurable results. You will quickly get an idea of the fit and responsiveness of your partner primarily and they will receive focused technology and product training. This will provide an environment in which they and their customers can get excited about your products and services, and immediately generate qualified leads. This new way of interacting with your VAR results in: Low cost leads, Increased sales efficiency and predictable sales, Decreased cost of sales, More business. 3. Key Accounts You already know that the VAR Channel is excellent at selling your products into their existing customer base, but another overlooked but important benefit that is often overlooked is how you can leverage the knowledge, wisdom and relationships a good VAR channel partner already has in key accounts and top companies. Their key account knowledge is an important contributor to your sales success. Very often VARs have been selling other products into these accounts and have accumulated information about products installed, business needs, contacts and successful selling strategies. This is great-information for quick entry and a shorter sales cycle in-to these accounts. Many times, organizations make the mistake of thinking that their direct salespeople are the only ones with the capability to sell in Key and Major Accounts. 4. Define the Rules of Engagement Treat VARs like the valued business partners they are. If you sell directly, then make sure that your salespeople understand that stealing a deal for the sake of a few extra points on one sale will not be tolerated. Nothing can be more shortsighted. The VAR partner will stop doing business with you AND word will get around fast. You risk wasting all the hard work you ve spent building your program. Before rolling out a VAR channel program- make sure that the sales, support, inside sales and order entry teams know exactly what their roles and responsibilities are and how they are expected to work with and engage your VARs. Clear rules of engagement avoid channel conflict, and promote optimal channel performance. 5. SWOT Analysis Analyze your VAR s strength and weaknesses early in the relationship and after a field-marketing program or event to determine if your expectations are realistic. Determine if you are a core product for them and if there are other opportunities for your VAR to build services around your technology to increase their margins. Determine if they are exceptionally successful at a particular vertical and develop
3 best practices to assist other VARs with a repeatable sales model. Evaluate and compare on an ongoing basis Share your Existing Customers Be willing to share your existing customers with your VAR. It may be a direct sale customer but they can certainly speak to the quality of their interaction with your company. They can also talk about the quality of your products and the type of support they have received-- how your technology has helped them do a better job and meet their organization s business needs. Share these customer stories over a Webex session for your partners on an ongoing basis. This will help them by being able to use successful references in their sales opportunities. Invite your existing customers to your VAR s events and encourage them to share their experiences. Spiff your VAR to help you build case studies or customer references that can be shared with other VARs. 7. Marketing is YOUR RESPONSIBILITY If your channel strategy relies on the VARs doing their own marketing, then you ve got a problem. Product marketing is your responsibility. Don t think VARs will market the product for you. Remember, VARs are great at fulfilling demand among their existing customers and not so great at creating it among new customers. It is your responsibility to position products in the market and create demand if you don t, your channel efforts will fail. 8. Social Media Networking and Multiple Touch Points is THEIR responsibility You can expect or require your VAR to participate in social media networking and to initiate and participate in multiple customer touch points. What does this mean? In the past, people who were interested in your products went to your companywebsite, sales team or call center for the information they needed. They were recipients of the information source and you were very much in control. In our current environment, information is available-24/7, on-demand, and from many different sources -many that you don t control. People have access to resources and are actively researching and sharing information about your company and products. For example, independent web sites, business-social networks, blogs, professional groups and customer product reviews are available on-line any time. They are making decisions about your company and products before ever talking to you. Forward thinking VAR organizations are actively involved in social media networking. They belong to social networks such as-linkedin and Facebook and are listening to what is being said. Additionally, these innovative VARs are initiating multiple touch points with their customers like newsletters, invitations to webinars, and s campaigns as a way to stay constantly in touch with their customers and continue to strengthen their relationships.
4 At the same time, most likely, your company will also have some marketing initiatives that are geared to generating qualified leads for your VAR s success. There isn t an issue with multiple customer touch points from different sources-as long as the message is relevant and consistent. With a consistent message, your interactions with your VAR and customers will improve significantly and as a result your customers will get a more satisfying buying experience resulting in increased sales, up-sell and cross-sell opportunities Control the Number of VAR Channel Partners Don t over do it by signing up more VARs than your market can support. One of the worst situations for a VAR is when they are competing with 8 of your other VARs for the same deal, especially if they have done any of the work! Loosing a deal to a reseller that hasn t been involved in the sales process due to erosion or near zero margins will de-motivate your entire reseller network. 10. You Need Visibility on the Deals Avoiding too many disconnected channel programs and providing a method that is well defined for deal registrations will be key to your success. Ideally, you have a channel management application or SFA software that will allow you to follow the progress of leads and lead management and will provide you with direct access to customer data. It is very important for you to have visibility on deals and a process for getting deal registration requests approved- at the speed of light! Your responsiveness will build loyalty and trust among your VARS and eliminate any channel conflict. Avoid too many disconnected channel programs and make sure that any program that you do roll out can be easily utilized by your VAR. In summary, your partner must feel connected to your company to build loyalty and knowledge. Along with your recruitment strategy and a budget for lead generation programs, these 10 quick tips will help your organization begin to build the framework for a successful and strong VAR Channel Program. As soon as you start thinking of your VAR channel as valued business partners, your interactions will improve significantly and the results will follow. A strong VAR Channel program will: Significantly improve the way that salespeople, VARs and customers engage, Align your sales and marketing strategy, Support productive and loyal VAR partnerships, Build loyal customers, Increase efficiency and predictable sales models, Decrease cost of sales, Increase sales, cross-sell and up-sell opportunities, Result in a much shorter sales cycle.
5 5 Author Profile - Marcy Clapp founded Tribal Connect to provide a marketing service to high tech companies. She has over 20 years experience in senior sales and marketing management positions where she has led organizations focusing on high growth, improved profitability balanced with high customer satisfaction. She can be contacted at marcy@tribalconnect.com
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