Challenges in the Channel

It seems like the easiest thing in the world. Create a brilliant product and have others sell it for you. Use a sales base that already reaches your target customer and watch the sales start rolling in. For a start-up, it’s a fairy tale dream come true. All of the headaches, blood, sweat, and tears spent on development finally see realization as profits. Of course, that’s the fairy tale version. The reality is a little different. Although the theory works wonders, in practice there are real challenges to developing an effective VAR strategy. A few points to keep in mind:

The Channel Approach Won’t Make A Poor Product Good

Relationships drive all sides of the VAR equation. You bank on the reseller’s relationships with ultimate users, and they bank on their relationship with you. When you have your channel pushing a subpar product, they know it. When you think about it, their client relationships are what brought you to the reseller in the first place. They know that. Don’t think for an instant that they’ll willingly risk their relationships for your sake. Make sure your product is good to go before you plug into the channel. A bad experience with your product reflects on the VAR and its relationship with the customer. If you lose that customer, you’ve lost a sale. If they lose that customer, they’ve lost a lot more than one sale, they lose a revenue stream.

The Channel Approach Still Requires Sales Management

Although VARs take a great deal of the day to day responsibility for the sales of your product, don’t think that means you won’t need a sales department. You’ll need employees who can, of course, sell to the VARs in the first place, but you’ll also need salespeople who can assist the channel in its efforts. It’s your product, and all of the problems you’d experience on a standard sales floor you’ll experience in mass. There will be over-selling, under-selling, poor forecasting, and underperforming teams. You’ll face some salespeople who are bound and determined to frustrate operations at every turn. An outsourced channel isn’t less focus on sales, its more.
This isn’t to say that the approach is wrong. On the contrary, an effective VAR program can reap huge rewards for a company. The leverage a company can achieve by utilizing the “feet on the street” from the VAR community cannot be underestimated.

• Provide solid products and the sales tools required to move them to your partners
• Continually drive sales leads to them and follow up
• Manage the process and key metrics manically

An effective relationship will benefit client, company, and VAR and position everyone for ongoing success.

Full disclosure: Paragon Software Group is 100% channel centric, utilizing VAR partners for all of its B2B sales.