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We are all familiar with 3rd party maintenance -- and the premise that VARs can make additional residual revenue; however if we pay close attention to the ‘fine print’ in the programs and contracts, what really happens to the residual revenue and who really owns the customer? Are there options? What can VARs do to protect their revenue and cust
January 8, 2010
2 Min Read
By Christine Callahan 2
We are all familiar with 3rd party maintenance — and the premise that VARs can make additional residual revenue; however if we pay close attention to the ‘fine print’ in the programs and contracts, what really happens to the residual revenue and who really owns the customer? Are there options? What can VARs do to protect their revenue and customer investment? If a customer elects a service alternative why is it called 3rd party? I just raised plenty of questions. Now, some answers.
All of those questions can be addressed simply, with an Independent Service Maintenance Organization (ISMO) program. It seems generally that VARs have become somewhat resigned to the ‘rules’ or ‘parameters’ of engagement that is associated with 3rd parties and OEM’s of the like.
The reality is that there are concerns for VARs with selling traditional 3rd Party Maintenance.
First, who really owns the service contract? At the end of the contract period, the maintenance company can take the renewal direct. They also compete directly with the channel in other sales efforts.
Second, a concern by the customer may be that 3rd party maintenance is inferior to the manufacturers’ technical support and service.
A final concern regarding third party maintenance as well as the manufacturer is inflexibility to customize service contracts to really accomplish the customer goal. Both manufacturers and 3rd party service establish service programs that work for their infrastructure and their business philosophies, not the business of the customer or channel satisfaction. The 3rd party is a competitor of the VAR.
A smarter maintenance and service alternative has been branded, ISMO an Independent Service and Maintenance Organization. This service is non-competitive with the channel and services transparently on behalf of the VAR.
There are no questions; unlike with 3rd party maintenance, the contract is yours. The customer remains yours. ISMO makes it easy to launch and extend services. The ISMO strategy is simple and smart for all channel partners.
Christine Callahan
Christine Callahan manages channel and alliance programs for ServiceKey. Monthly guest blogs such as this one are part of The VAR Guy’s 2010 sponsorship program.You May Also Like
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