6 Steps to a Successful VAR Partnership

It's no secret that the greatest source of new business, in any industry, is referrals. In the telecom industry the people with the closest touch to the buying public are value-added resellers (VARs). Here are six tips for winning them over.

Channel Partners

February 2, 2010

6 Min Read
6 Steps to a Successful VAR Partnership

It’s no secret that the greatest source of new business, in any industry, is referrals. In the telecom industry the people with the closest touch to the buying public are value-added resellers (VARs). They help their customers purchase phone equipment, they come to the customer premise when the phone system isn’t working right. They are viewed by their customers as “phone and Internet experts,” which is why their recommendations carry so much weight, and why telecom carriers and agents want to engage them in partnerships.

Forging these partnerships is not as easy as it might seem. They are not swayed by the opportunity to earn residual income if they perceive that it might damage customer relationships. As one VAR candidly said, “The carrier messes something up 100 percent of the time, and that is why I want to distance myself as far as possible from the carrier business.” This sentiment is held by the overwhelming majority of VARs, and convincing them to partner with your agency for carrier business can be challenging, but not impossible if done right. Here are six steps to increase your chances of success.

1. Go local. The first place to find VARs to work with is in your own backyard. An easy way to find local VARs is to perform a search on Google for “PBX equipment” in your city or use a dealer search directory for a major equipment vendor such as Avaya, ShoreTel or Cisco.

Before reaching out it is essential that you review the VAR’s Web site in order to better understand its business. Internet-based reverse lookup tools can be used as a resource to gather all the necessary information about the VAR. By having this information in place before the call, you will be more persuasive and confident in your conversation. As you make your phone calls, you will find that most VARs usually are busy. Your initial phone call should not be used to communicate your entire message, but it should be an opportunity to introduce yourself and schedule an appointment. If at all possible, your appointment should be a lunch meeting, which is why working with VARs in your local area is preferred. Face-to-face meetings are hard to ignore and more effective.

2. Don’t talk too much. Don’t be surprised if the majority of VARs you call have a previous carrier relationship in place. The key to breaking through these existing partnerships is to first understand their current relationships and any problems that may be present. For example, there may be slow quote turnaround times, poor communication with the carrier or agent during installs, subpar commissions or a lack of transparency on deal flow. Whatever may be the case, try to understand what is not working first and then share what you can do to resolve these issues. Even though you will be tempted to do a lot of talking, it is important to listen before you discuss your own value proposition.

3. Address their concerns. Many VARs will have a list of unresolved issues stemming from their current partners, but few will be willing to change anything. Old habits are hard to break, no matter how good your solution may be. VARs are loathe to trying new things; putting an existing customer relationship in the hands of an outsider is very stressful and often they only see the downside risk. It takes a lot of trust for a VAR to open its customer base completely to you. The VAR has to know you have the people skills, the technical skills and the right carrier solutions to be comfortable working with you.

One way to market yourself to your VAR referral prospects is to invest in a professional Web site, logo and business cards, so that you convey professionalism. Marketing is a key component of building your value. Customers, VARs and potential business partners are all human and will have an emotional response to your marketing — or lack thereof.

4. Find the right compensation. There will be a wide range of compensation preferences, so before you offer anything, try to ask some questions first. Some VARs will seek to remain “unbiased” and not ask for any compensation while others will expect all of the commissions while you do all of the work. Many will seek one-time payouts while most will seek residuals.

Ultimately, understand that most VARs only will be concerned about one thing: their core business. The best type of compensation you can offer a VAR is something that helps strengthen its core business. Although it would be helpful to offer VARs equipment opportunities, most agents do not see enough equipment deals to influence the relationship and must, therefore, look for other ways to find equipment leads, such as paid advertising on Google or through sites such as VARNetwork.com or BuyerZone.com.

5. Communicate your value. Whether you reciprocate equipment deals to your partners or not will be irrelevant without the key ingredient to any VAR relationship — you. As a consultant your job is to add expertise, negotiate pricing and terms and help justify the cost of the VAR’s service/equipment by saving money on the carrier service side of the equation. You need to know which carriers will help pay for equipment, which carriers are paying a spiff that could help subsidize some of the hardware costs and which carriers offer free months of service.

Hand in hand with carrier specials is your need to stay in constant communication with your VAR partners. Send them a monthly e-mail updating them on the ever-changing carrier service landscape so that the message sinks in: “This guy (or gal) is an expert I can’t afford to ignore.” By keeping your partners up-to-date, you will instill confidence and eventually, they will open the barn door to their stable of customers.

6. Do what you say and say what you do. Once a VAR has introduced you to their clients, make sure you follow through on your promises:

  • If you say, “I’ll have a quote for you tomorrow,” then you’d better have real-time quotes or a very responsive suite of carrier partners.

  • If you say, “I’ll see if I can get a more competitive price from a carrier,” you’d better know that, based on past experience, the carrier can come down on price.

  • If you say, “Your circuit should be turned up in two weeks,” you’d better know that the carrier can deliver an expedited install, since most can’t do it for three to four weeks.

Always be conservative in your assessments and more often than not, you’ll be able to keep your word and, more importantly, keep the confidence of your VAR partners.

Patrick K. Oborn is a co-founder of master agency Telarus Inc. and serves as its vice president of marketing. Telarus also is the parent company of VARNetwork.com, which offers businesses a free tool to find VARs in their local area and offers leads to VARs.

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