What is the VAR Business Model?
Value-Added Reseller business models can be simple. Organizations utilize VARs as channel partners to help them get their products to the end-user. The original equipment manufacturer (OEM) sells their product to the VAR who will bundle it with some sort of add-on for the purpose of reselling.
The added value may take on a variety of forms. Some VARs create unique software product offerings to go with a piece of hardware; others offer consulting or other professional services, but no matter what, VARs always bring something else to the customer besides the original product.
Like most strategies, the VAR business model constantly changes and adapts to the times. Organizations using this model can greatly benefit from understanding all that’s going on in the VAR sector. That’s why we’ve put together this list of the 10 most important sales and marketing trends for organizations using VARs.
1. Controlling VAR Workflows is Next to Impossible
CRM adoption with VARs will always be a challenge. Resellers don’t want to use unique software for every company they partner with, so how can your organization stay aware of their progress and workflows?
The answer is to not require CRM usage or portal logins at all. Lead assignment technology can send leads directly to VARs via text so they can immediately speak with potential customers. No software. No onboarding. No hassle.
2. Automation Helps Increase Visibility
Tools like Lead Assign empower sales teams to automatically collect updates from reps via SMS or email instead of portals and logins. This allows sales leaders to have better visibility into deals than companies that require VARs to use CRMs.
Organizations can also increase the visibility of their VARs by using the best partner lead management tools.
3. Attribution is More Important Than Ever
By utilizing marketing automation and lead management systems that incentivize VARs to provide feedback on leads and automatically update deal status, companies can understand the role VARs play in the sales process from start to finish.
Having access to this kind of data allows your organization to note the best (and worst) parts of the process. Once you’ve got that information, you can optimize the things that work and throw out those that don’t, resulting in greater returns and fewer wasted resources.
4. Incentivizing High Performing Reps to Increase Sales Velocity
Companies can increase sales velocity and lead to revenue rates by automatically sending leads to the most effective and qualified VARs. Software solutions can help the organization incentivize their team by sending more leads to the VARs that respond quickest. The automation also moves the deals forward and gives VARs a chance to provide their feedback on leads.
5. AI Helps Companies Match a Lead with the Most Qualified VAR
Not every VAR is right for every job, and sending leads out in a round robin, or sending them straight to a shark tank in a partner portal, can result in a lesser qualified VAR taking the lead. By using AI to evaluate a lead’s needs and matching them with a VAR who specializes in the services they need, companies can increase lead to revenue and decrease the time and money spent on poorly matched leads.
6. Pricing Transparency is a Must
At one point, VARs could boost their margins by keeping their price information close to the chest. That doesn’t work so much in the digital age. Today, buyers can easily compare prices by scanning options on google or browsing E-commerce sites like Amazon. Customers, even large organizations, have grown accustomed to this level of price transparency so VAR’s looking to stay competitive are forced to reveal their prices early in the buyer’s journey.
7. OEMs Have Become More Competitive
While the VAR business model has grown in recent years, so has the use of direct sales. Many OEMs have cut out the middleman and have chosen to instead go straight to their customers. Even those who do incorporate some channel partner strategies into their overall sales plan may rely on VARs less than they did in the past, making them only a portion of their larger sales force.
8. User Friendly Software Requires Less Technical Expertise
Early software solutions included complex systems and codes that required in-depth training and consultations. VARs ate that up because they could sell the software and professional services in one package.
This started to shift as user and customer experiences became a higher priority and software became more user-friendly. Now, most of the people in any given office can likely make their way around any given piece of software. Even more complicated systems have digital training material or online help desks to meet customer needs. A former value-add has now become irrelevant, forcing VARs to rethink what they bring to the table.
9. Growth Rely on Point Solutions
The people running SMBs have one thing on their mind: growth. Yes, they want attractive marketing strategies, good customer experiences, and efficient sales processes, but the lines between each of those departments have begun to blur. Now, it is all about growth: generating leads, selling to them, and keeping them engaged for up-selling and cross-selling opportunities.
VARs can rely on offering point solutions as add-on enablement strategies. SMB leaders are only interested in solution providers that help generate growth in some way. If your VARs aren’t enabled, then the sales network won’t get the sale.
10. Cloud Computing Has Become More Popular
Data storage used to be a huge opportunity for VARs, but public cloud computing and hosting have made that much more complicated. The process of acquiring cloud storage has become much simpler and reasonably affordable for organizations, so those VARs have had to think of other ways to grab a customer’s attention and get their business.
Supporting your value-added reseller network and enabling your sales partners to close successfully are no easy tasks. Partner lead management systems can help.