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Telecom Agents Explore Challenges of VAR Partnerships

By Josh Long
March 14, 2011 - Article

CHANNEL PARTNERS — Understand a VAR’s core business and don’t throw him under the bus if a customer has a problem.

Those were just two of the recommendations that were highlighted Monday afternoon during an Agent-VAR Partnering workshop hosted by CompTIA and Channel Partners during the Channel Partners Conference and Expo in Las Vegas.

During the workshop, more than two dozen individuals – mostly agents – split up into two groups and explored the opportunities and challenges of working with VARs, a growing trend in the telecom industry. A survey of telecom agents and IT solutions providers conducted by CompTIA and Channel Partners found that more than two-thirds of agents reported partnering with traditional IT VARs and PBX dealers.

“Agents have expressed to me a great interest in partnering with VARs. However it doesn’t always go as well as they’d hoped," Channel Partners Editor-in-Chief Khali Henderson said at the outset of the workshop. “Sometimes it’s very successful. Sometimes it’s not. They would like to improve those relationships."

One of the groups concluded that an agent must understand a VAR’s products and his core business. And if something goes wrong, the agent shouldn’t play the blame game with the customer.

“You've got to be willing to take the heat and take the pressure off the VAR," said Scott Langdon of Connectivity Source, a master agency in Raleigh, N.C.

Scott McKinney of ConnecTel, a telecom management, consulting and brokerage firm, indicated during the group deliberations that an agent shouldn’t contradict a VAR in the presence of a customer. He also noted that once his company receives a lead from a VAR he won’t work with any other partners on that particular deal because the VARs are fiercely competitive.

One potential reason some agent-VAR partnerships have failed is because the parties are not committed to the relationship. Channel Partners and CompTIA asked participants about the major pain points in the agent-VAR partnerships and the primary reasons they have failed. Given several choices, 58 percent of those individuals who responded to the question (via text message) cited “lack of commitment."

Chuck Finley of SKJ Technologies said the group of participants he moderated feels agents and VARs need to band together because the large U.S. carriers pose a threat to both channels.

The group also concluded VARs need sales skills while agents need technical expertise. The group further recommended that agents and VARs collaborate such as by making joint calls to a customer and asking questions in the same room.  A customer doesn’t want to repeat his story twice, one participant mentioned.

In order to work with VARs, agents also need to obtain some types of certification, Finley added, alluding to the certification programs that equipment manufacturers like Cisco Systems often tout.

Comments during the workshop highlighted that the agent-VAR relationship may be maturing from an informal arrangement to a contractual or otherwise more formal agreement.

“VARs are more comfortable with a formal agreement," said Ralph Lewis of Telecom Specialist.  “VARs are used to arranging a handshake agreement often with a carrier rep and not getting much back in return so they like the idea of a formal agreement."

Another participant said most relationships are informal “but I see us leading" to more formal agreements. One reason is that referral partners sell the same equipment, he said, and you need to protect a VAR’s leads.  

When asked how partnerships are changing – specifically whether they are becoming more formal/contractual, less formal/contractual or staying the same – the lion’s share (88 percent) of participants who responded via text choose the first option. 

However, only about a handful of people raised their hand in the room when asked if they had formal agreements with VARs.

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