Value Added Reseller (VAR) Check-Up: Brand Loyal vs. Brainwashed

Often, the owner of a small, value added reseller (VAR) has some tough choices to make when it comes to deciding which platforms to invest in and which brands to represent.

Depending on the business model, geographic location, company size, vertical specialization (or lack thereof), and core skill sets, a value added reseller over time gravitates towards certain vendors, channel programs, platforms, and products.

Like most things in life and in business, IT channel allegiances are rarely as cut-and-dry as the childhood game, “He/she loves me. He/she loves me not.” Often, how a VAR chooses to partner with a particular vendor can be described on more a continuum of anywhere from brand loyal to utterly, completely brainwashed, as if belonging to a cult.

Multi-Vendor Options vs. One-Size-Fits-All

This need for a value added reseller check-up reminded me of a LinkedIn Answers Q&A that I came across earlier this year. Feyzi Bagirov, president of Two Hemispheres Corp in Boston asked:

Is it OK for a value added reseller to offer competing software products?

Bagirov elaborated: If a VAR offered Microsoft products, for example Microsoft Dynamics CRM, could that VAR offer its clients a competing CRM from another vendor? A business intelligence (BI) expert, Bagirov was looking for advice on how to decide which of the two competing products should be offered to clients.

Reminder: A Value Added Reseller Must Add “Value”

Charles Caro, executive director at Rebounders United in Tampa, chimed in first. Caro first voiced his concerns that value added resellers actually need to “add value.”

In other words, just reselling products and commoditized services isn’t really sufficient added value. Of course, “value” is in the eye of the beholder. But then again, there’s pretty universal agreement that companies which are strictly “order takers” or “box pushers” really do not add much, if any, value.

Caro strongly recommended that VARs learn very quickly that one single platform does not fit all clients. On that basis alone, Bagirov must, by definition of serving multiple clients with differing needs, be open to working with multiple, competing CRM products.

It’s All about Choices that Meet Each Client’s Unique Needs

Using a shoe store analogy, where a retailer carries several brands and dozens of styles, Caro notes that a value added reseller must

• Avoid putting all of its eggs in one basket

• Be able to select from among multiple vendors, to provide its clients with the best value for their unique needs and circumstances

Echoing much of Caro’s sentiment, Jay Kaiser, a marketing team leader in the greater New York City area, added that the “value added” part of being a VAR should mean “more choices” to cater to clients’ unique needs.

And just as Caro introduced the shoe store retailer analogy, Kaiser’s analogy was based on wireless stores, where you might expect to find upwards of 100 different mobile phone choices that exist to fulfill different customers’ wants, needs, expectations, brand loyalties, and budgets, among other factors.

How Many Different CRM Choices Are Enough?

Now neither Caro nor Kaiser is suggesting that Bagirov’s firm offer dozens of different CRM choices. That would be a logistical, financial, training, support, and operational nightmare. However, both Caro and Kaiser believe that a value added reseller must offer choice, which would mean at least two choices.

Should Two Hemispheres Corp resell substantially more than two different CRM platforms?

That all depends on how many employees and contractors Bagirov intends to add to the mix, at what stages, and with which skill sets that each team member would bring to the table.

These are all very important strategic issues that Bagirov should be thinking through, as he drafts a business plan and marketing plan.

Steer Clear of Exclusive Agreements that Block Client Choices

The third and final answer on this LinkedIn Answers virtual Q&A panel came from Prasanna Srinivasan, founder and Director of Skynapse Business Technology in Singapore.

Srinivasan’s primary concern was that Bagirov’s firm adhere to the type of value added reseller agreement that’s signed with each vendor, whether it is exclusive or nonexclusive.

From a practical standpoint, most channel programs for CRM platforms like Microsoft Dynamics CRM and its direct competitors do not require exclusivity.

Srinivasan also reminded Bagirov to ensure that available choices take into account clients’ budgets, existing platforms, and required features and functionality.

The Bottom Line

In the end with this check-up, the level of value added reseller allegiance can be anywhere from brand loyal to brainwashed. However my recommendation, and that of the LinkedIn Answers virtual “panel” for this question, is that a VAR keep its options open, so it can best satisfy its clients’ needs.

How loyal is your company to certain brands? Has being too loyal ever cost you clients? And how does a value added reseller like Two Hemispheres Corp decide if two CRM choices are sufficient? Please share your thoughts in the COMMENTS section below.

And to follow-through on the tips introduced in this article, be sure to download your free copy of the special report on How to Start a Computer Consulting Business: 6 Proven Ways to Build Your Initial Client Base.

Creative Commons Image Source: flickr elias_daniel