Shawn Aghdassi receives over 200 e-mails a day as operations manager at Intellect Computer Source, mostly from vendors offering promotions, seminars, training and other program-related perks. However, the Toronto-based VAR can’t keep up with the offers.
“I don’t go through them all,” he confessed. “If I did, I wouldn’t have time to do my work.”
It’s a VAR-eat-VAR world out there, and Aghdassi knows that taking advantage of vendor programs helps him win sales and better serve his customers. It’s a question of finding the time to do so.
But resellers that hesitate could be hurt.
“If it’s a solution provider, the end user is looking for quality of service and successful implementation of the technology,” said Greg Myers, vice-president of marketing at Tech Data Canada.
“The value to the customer is trust. It’s a different scenario than a spot buyer who wants 10 laser printers today.”
Maximizing the programs offered to the channel can be both a benefit and a burden to a reseller of any size.
According Michael Haines, a vice-president of research at Gartner Inc. who advises vendors on channel strategies, many companies are acutely aware of this and are working to create usable, manageable programs.
Haines noted that while many vendors are trying to make improvements, simplify programs and straighten out compensation it’s causing a major upheaval.
“It’s very solid, and for all the right reasons, but it’s still a lot of change,” he said.
But, he added, “the changes that concentrate on simplifying channel programs and increasing opportunities for channel partners to increase services opportunities and profitability will be the most valuable and well-received by channel companies.”
Hewlett Packard had plenty of incentive to improve its programs because two-thirds of its worldwide revenue is generated by the channel.
“Our goal is to try and work in partnership to help grow their business profitably as well as grow ours,” said Heather Kent, director of partnership and programs at HP Canada.
To that end, HP recently created its unified PartnerONE program. Designed to accommodate resellers at all levels, it offers a portal with tools and resources such as Campaign Central, a marketing toolkit that the reseller can customize with its own call to action.
But at the same time, said Kent, “we’re trying to reduce the (administrative) burden (on resellers). More and more, we’re driving promotions and strategies that are claimless.”
Intel’s director of distribution and sales for North America, David Allen, said his company has smoothed administration problems.
“Integrators used to have to do rebate paperwork, and it was becoming a major issue,” he said. “Intel’s rebate program is automatic – a no pain process.” The chipmaker uses its own records of sales to an integrator to determine the appropriate rebate, and just sends a cheque.
Dislikes rebates
However Peter Callaghan, executive vice-president of sales and marketing at Vancouver’s Maximizer Software, takes a dim view of rebates in any form. “As a VAR for other vendor technologies myself, I find rebates cumbersome,” he said. “It’s a sign the vendor wasn’t paying enough.”
He prefers to provide a mechanism for resellers that helps them deal with situations where they need additional margin to make a deal happen.
Aghdassi sees both the pros and the cons. He likes the fact that a rebate lets him give his customer a better price, but hates the process. “They say, ‘we’ll give you a rebate,’” he complained, “then you have to call ten times before they send it. It’s not worth it – it’s the time. But if you don’t follow up, you don’t get (the rebate).”
While Tech Data’s Myers hears reseller complaints about rebates all the time, he thinks the problem often lies with the resellers themselves.
“When the claim is complete and accurate I think the benefits flow smoothly,” he insisted. “I think problems arise when the claim is incomplete. There’s not enough time, not enough discipline in the (reseller) organization (to record necessary information). Some vendors use third parties; it’s very much black and white with redemption. If the claim is clean, the money flows.”
Money on the table
Computer Associates finds that its level of involvement with the partner directly affects how many of its programs the reseller leverages. “ESPs (the Enterprise Solution Provider level of its Premier Partner category) certainly exploit all of the programs,” said Chris Devlin, vice-president of Canadian partner advocacy.
“We have high touch with them. The ones we don’t touch as much don’t take as much advantage of the programs.”
These VARs leave money on the table every day that is available through self-service. For example, Devlin noted, an affiliate selling anti-spyware software is entitled to a $1 per node SPIF, but they have to fill out a form. Most don’t.
Why not? Devlin speculated that it was lack of awareness, or lack of time. “They have to go to the self-service portal and register to claim it. People get busy and don’t do it.”
ESPs, on the other hand, take full advantage because, said Devlin, “we’re in their face.”
For the reseller, Haines noted, all of the changes occurring in channel programs present an opportunity to step back and evaluate vendor partners.
“Ask yourself, am I aligned with the best vendor, strategically,” he suggested, adding that some of the changed programs may mean that the vendor is not the best fit for a reseller any more.
“You’ve got to get proactive, and really understand what has happened and how it affects your business.”
Network Appliance’s Canadian general manager, Jeff Goldstein, agrees.
“One of the things that we’ve experienced is there is this rush with great enthusiasm to sign up partners and there’s the dance: Is it good for the partner, is it good for the vendor,” he said. “Then often six to nine months later you look at each other and go, ‘We had such great hopes for the relationship and nothing has happened.’
“We came to the conclusion that there’s a bit of a business mapping exercise that needs to happen at the very front end of the relationship that really determines whether the relationship is going to be successful. And if the relationship isn’t successful then it doesn’t really matter how many programs you drive, both parties end up frustrated and unsuccessful.”
Leverage a business plan
A business plan is a key component in leveraging all a vendor has to offer. At Maximizer, said Callaghan, the top 25 per cent of VARs deliver 80 per cent of the revenue, so Maximizer reps work with partners on business plans to help measure their success.
“We try to drive the right amount of quality opportunities to our VARs. We find that by having a close relationship and managing a VAR, we have a more successful VAR. We can identify things – sales reps promote aspects of the program like co-op marketing dollars. Focusing in on VARs that have a solid business plan helps them take advantage of incentives.”
The big challenge is creating awareness of all of all aspects of the programs. “There’s so much white noise in the market that (VARs) can’t pay attention,” Devlin noted. “It’s a question of focus. VARs have so many things to do, how can they focus?”
Kent agreed, but thinks that the onus is on the VAR to keep up. “VARs should invest the time it takes to be aware of what’s available to them,” she said. “There are lots of opportunities. It sets a VAR apart from the others.”
“Manufacturers have realized that you don’t want to make enemies with your programs,” added Allen. “There should be tangible benefits. And VARs should be able to integrate them into their business model. I think sometimes there are so many different elements in programs that a reseller may seize on or two elements and not be aware of the others.
“I don’t
