Making Agent-VAR Partnerships Work

The melding of IT and communications technologies has raised issues and opportunities for VARs and agents alike. The idea that each works in its own separate hemisphere is quickly dissolving as end users look to reduce their pain points and seek one throat to choke when things go wrong.

April 27, 2010

15 Min Read
Making Agent-VAR Partnerships Work

By Khali Henderson

The melding of IT and communications technologies has opened a Pandoras box of issues and opportunities for VARs and agents alike as they try to navigate previously uncharted waters. The idea that each works in its own separate hemisphere is quickly dissolving as end users look to reduce their pain points and seek one throat to choke when things go wrong. But is a partnering agreement the way to go in todays business economic environment?

An informal poll of agents among PHONE+ readers in February found mixed results. One in five called their VAR partnerships wildly successful, meaning nearly all attempts to partner with VARs have been successful. Most voters (50 percent), however, said they experienced a little success with one quarter of their attempts to partner with VARs being successful.

Significantly, only 7 percent said they had not explored such a partnership, so the potential value generally is understood at least by the agent community.

What about the VARs? Are they game for an alliance? Increasingly, they are looking at these partnerships not simply to offload carrier services management but to push their services through agents.

Nexus IS is one VAR thats targeting telecom agents and consultants through a program it formalized in January 2010 that it calls Nexus Partner Connections. We realized the telecom agents are not looking to do LAN work, but they can impact the decision, said Chris Henry, national partner manager for Nexus. More than 30 partners have signed on to the program, which not only fills in the skill gaps, including lack of pricey training and certifications, but offers a percentage of the deal.

Its an opportunity for them to grow their revenue stream, said Steve Darius, Nexus strategic alliances account manager.

And that may be the most compelling common ground. Its certainly a great place to start to bridge the chasm between the telecom and IT worlds.

To get some more cues about successful partnerships, PHONE+ spoke to five companies VARs and agents about their partnerships.

Shamrock Consulting Group LLC

Spokesperson:: Paul Cooney, President
Company Size: 16
Primary Business: Agent
VAR Partner: Nexus IS Inc.

Describe your partnership: Shamrock Consulting Group works with Nexus as a strategic partner for all Cisco-related products and services, server virtualization, professional services and the countless other value-added services that Nexus provides to its clients. Shamrock brings Nexus into our client base to ensure that our clients receive the highest level of service and engineering support. Nexus brings in Shamrock to meetings as its telecommunications partner. We work on all carrier products from SIP trunking, MPLS and hosting to traditional local, long-distance, toll-free phone service. As an independent agent, we can ensure that that client gets several quotes that will allow them to make the best decision for their company. Working together with Nexus on larger, complex projects is where we can create the most value for the client. By ensuring that the right transport is connected to an equipment investment, we ensure that clients get the greatest return on their investment.

How long has this partnerships been in play? Two years

What prompted your company to enter into this partnership? I had a past history with Nexus. When I managed the AT&T’s Enterprise team, we worked with Nexus on several accounts and they not only met but exceeded client expectations. When I started Shamrock, I began speaking to Nexus about a joint partnership, and due to our past working relationship and the complementary nature of our businesses, we quickly formalized an agreement.

At Shamrock we focus on what we do best, which is network design, carrier selection and implementation. Many of our clients are deploying large MPLS networks, adding data centers, and looking for the right type of equipment to add to their network. We found clients looking for expertise in server virtualization, cloud computing and security services, which are natural conversations that come up in our client discussions. At Shamrock, we don’t work directly with any manufacturers of equipment, so initially we wanted to find a strong partner to bring into our client base to handle these requirements.

Nexus was looking for a strong partner to work with their client base at the carrier level. The relationship in accounts could not fit any better we specialize in carriers and Nexus specializes in equipment, security and professional services. Every client we work with needs expertise in both areas, so working together is not only a great fit for Shamrock and Nexus to help get introduced into more accounts, but the client benefits from two best-of-breed companies that can service all of their communications needs.

What did your company do to ensure a successful partnership? My philosophy on partnerships is very simple we need to have incentive to work together, the client needs to see value in the partnership and there needs to be enough activity by both partners to support the relationship. We have exceeded all of these requirements.

At the beginning of the relationship, Shamrock spent time traveling to the different sales offices to explain to the sales teams the value of working together. …After the Nexus team saw value in what Shamrock can do to help their client base, and Shamrock saw that they could bring in Nexus for everything from a new Cisco IP PBX to server virtualization, both teams began introducing each other into accounts. This is the key to any successful partnership both sides need to buy into the partnership and see value, which should translate into exposure into new accounts.

What would you do differently? I would have started the agency many years before I did, and I would have started the Nexus partnership on day 1.

What advice would you give others interested in partnering? I advise all agents to formalize relationships with solid VAR partners. You are coming in contact with the same clients, and decision makers need a solid team to help make the best decisions for their organizations. CIOs and IT directors are working on many different projects, and they cannot juggle all of the vendor relationships and cold calls. They will absolutely see value in working with a team that can fulfill their requirements for design, transport, equipment, security and all of the other services that a successful agent-VAR relationship can fulfill. The agent and VAR benefit by being introduced to new clients, and the client benefits from two teams that both specialize in certain areas. If you are an agent without a VAR partnership and vice versa, you are doing your business a disservice and your clients are not getting the most out of their relationship with you.

MSI System Integrators

Spokesperson: Laura Principato, Networking Solutions Sales Specialist
Company Size: 430
Primary Business: Systems integration
Agent Partner: Carrier Access Inc.

Describe your partnership: MSI acts as the systems integrator for Carrier Access Inc. and Carrier Access acts as the master agent for all MSIs carrier deals a partnership that has evolved over time.

How long has this partnership been in play? Two years

What prompted your company to enter into this partnership? MSI originally had its own carrier services practice and was an AT&T master. Support changes within AT&T were placing more demands on our current back office, and our sales coverage was expanding into other CLEC territories. It made financial sense to first partner with Carrier Access Inc. for Qwest business, with Carrier Access partnering with MSI for AT&T deals. As time went by, Carrier Accesss back-office structure scaled much better for the growth. We could then better utilize our current back-office team to better leverage our primary business needs as an IT solutions provider. Carrier Access is now our master agent for all carrier deals.

What did your company do to ensure a successful partnership? Both companies have regional engagements with the other companys sales teams. Carrier Access works very hard with the MSI sales team to promote carrier services. This is still probably the hardest hurdle to overcome. Keeping carrier services in front of mind awareness for MSI is probably the most difficult for the MSI sales staff. Adding carrier services onto the list of products and services for the sales teams is somewhat difficult. Regular meetings with Carrier Access and MSI help achieve this.

Carrier Access works with the MSI sales teams to help get current MSI accounts, get to the appropriate owner of the telco services and get the conversation started. Then Carrier Access takes it from there while the MSI sales reps can stay focused on the primary MSI lines of business.

What would you do differently? A better question is, How can this be improved? Improvement for a better relationship would only come from the actual carriers themselves. Carrier Access provides all the support we need. Constraints from the carriers in the areas of timely quotes and competitive bidding are probably the biggest issues we face. The wait time for pricing allows a sales rep to lose interest in the deal.

What advice would you give others interested in a partnership? Find a master that would provide the level of service you would like to personally provide. For MSI it is a proficient sales force that is able to sell across many carriers, 24-hour support, a fair commission structure and a strong sense of an honest partnership. This is not like selling hardware where the manufacturer assigns a manufacturer sales rep to a region and you get who you get. This is more like picking a spouse there are a lot to choose from, but you want to pick one that you think you want to live with and grow together.

TelephoNET Corp.

Spokesperson: Greg Ottensmeyer, President
Company Size: 9
Primary Business: VAR
Agent Partner: Telarus Inc.

Describe your partnership: TelephoNET relies on its master agent, Telarus, to forge and manage profitable relationships with major carriers and specialized service providers. Before our partnership with Telarus we managed those relationships ourselves. Telarus has eliminated that requirement with a smooth and efficient system that allows us to concentrate on our core strength providing comprehensive telecommunications solutions for our clients.

How long has this partnership been in play? TelephoNET has been associated with Telarus for more than five years.

What prompted your company to enter into this partnership? Realizing the value that GeoQuote (real-time carrier quotes) and the Telarus agent CRM brought to the table, we slowly began moving business through the Telarus channel.

What did your company do to ensure a successful partnership?

TelephoNET played by the rules, which are the same in any good business relationship: dealing honestly, with integrity and kindness toward all you encounter.

What would you do differently? I wouldnt do anything differently, but I would do it again.

What advice would you give others interested in a partnership? If you believe your business might benefit through strong partnerships, use Telarus as a measuring stick for all others you consider.

Innovative Visions LLC

Spokesman: Jake Carey-Rand, President
Company Size: 5
Primary Business: Master agent
VAR Partner: Lyme Computer Systems Inc.

Describe your partnership: …Although we have the ability to refer business in all directions throughout the channel, our primary focus has seen us helping those in the IT industry better grasp the concepts and opportunities in the voice and data market. …One such relationship is with Lyme Computer Systems (LCS). One hundred percent employee-owned, LCS is recognized as a premier IT solutions provider in both government and commercial markets. LCS is built around a one-contact-does-all business model, where account executives manage pre-sales, configuration, ordering and post-sales support. IV helps these account executives uncover voice and data opportunities within their existing account base, as well as provide the necessary systems and information to close the sale. Depending on each account executive’s comfort level and experience selling telecom, IV helps to manage the sales process appropriately; assisting with configuration and quoting, contract management and coordinating the provisioning process. This allows LCS to offer voice and data services to its clients, while remaining focused on its core competency of great customer service in the IT space.

How long has this partnership been in play? Lyme Computer Systems and Innovative Visions have been building up LCS’ voice and data offerings since 2009, starting with the portfolio of one account executive and expanding to the rest of the organization.

What prompted your company to enter into this partnership? Having worked with systems integrators and IT service providers on both a national and regional level, we saw the growing demand for reliable, independent carrier services and the consultation needed to ensure success. … Most IT service providers can’t dedicate enough time to developing the contacts, back-end office support systems and training to help with anything beyond referring the business to the local CLEC.

…IV’s intimate knowledge of the IT channel means we know what our partners and their customers need and what sticking points can derail a project. However, we also have years of experience in the telecom channel and can act as that expert guide to help our IT partner look the expert. By bringing our expertise and systems to the table, LCS is able to increase its value-add and directly add profit to its bottom line, without the heavy investment, commitments or uphill battle they often see their competitors wage. Market transitions don’t have to be difficult and IV has seen relationships such as the one we have with LCS be more than profitable for all parties involved.

What did your company do to ensure a successful partnership? Channel support and communication is what will make or break any partnership. Most carriers and master agents can’t fully appreciate how quickly and efficiently the IT channel operates or the importance of constant communication. Expectations in the telecom market still revolve around weeks, while customers and their VARs work on a turnaround time in hours or days. By first focusing on our systems and platform, we made sure our partners had the resources needed, when they needed them, without pulling them away from their core focus. Customer service is what drives profit and that is where the bulk of our focus remains. Timely, reliable responses are crucial, even if it is just to say you’re still waiting for the carrier’s quote to come through. Offering LCS the world-class training, back-office support and sales assistance we provide to all of our VAR partners has been crucial to their acceptance of this new model of helping their clients. LCS’ clients, in turn, see greater value from their relationship.

What would you do differently? Had we known then what we know now, certainly we would have devoted more resources to building a more robust sales support team sooner. However, while we knew the IT and telecom channels would merge, it has taken the better part of six years to fully realize this transformation. Dedicating additional resources to this effort sooner certainly would have seen our partnership with LCS flourish faster, but we feel we are now at a point where we can all benefit by the rapid growth, without compromise.

What advice would you give others interested in a partnership? Don’t feel pressured to divert resources away from your core business just to capture a new business market. Response time, setting appropriate and accurate expectations and training are all crucial components to this transition, but we have seen master agents and carriers falter because they weren’t really committing or understanding this new market. Shifting your focus towards assisting VARs with their telecom needs, without allocating the appropriate resources, will leave you a master of none. Master agents are not going to provide better systems support than the local IT vendor, just as it is unreasonable to think the IT vendor will be able to efficiently provide voice and data consulting services from 35-plus carriers in a better fashion than the master agent. Therefore the opportunity is there in this rapidly changing environment where competition is fierce, so do make swift additions to your portfolio where you see increased or changing customer demand, but make sure you are adding these services by adding the appropriate IT channel expertise, either through internal or external growth. In new markets, unless you are sitting on a pile of cash to buy the expert in your new market, partnering to gain that expertise is worth the profit split any day and that’s where we have seen continued success.

Complete Communications

Spokesperson: Michael, Meldrum, President
Company Size: 30
Primary Business: VAR
Agent Partner: Telnet Worldwide

Describe your partnership: We share leads back and forth we primarily get a spiff along with an MRC and on leads that they send to us we work directly with the customer. We bring the agent opportunities that he would not see if we didnt bring them to the table this is the main reason our relationship works so well. They do a great job with the customers and we have been in the system integration side for 30 years so we bring a wealth of knowledge to the hardware side as well.

How long has this partnership been in play? Five years, however my relationship goes back 15 years with our direct representative.

What prompted your company to enter into this partnership? My relationship with Leonard Brandenburg. Ive been working with Leonard for the last 15 years and for the first 10 I just handed our customers over to him and I knew that they would be taken care of. Leonard came to me about five years ago and said that he was starting with a new company and he thought that their reseller program was worth taking a look at and from there it has been smooth sailing. I have the best of both worlds I can offer a great product and still have Leonard to lean on when the road gets bumpy.

What did your company do to ensure a successful partnership? Being upfront and honest with our agents and our customers is what keeps us in business.

What would you do differently? I would have started this type of relationship 15 years ago.

What advice would you give others interested in a partnership? Youre either in it or youre not; it cant be a part-time partnership.

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