Some of the ways to improve partnerships between agents and VARs are straightforward and what you might expect. Among them: learning about each other’s business models and communicating more effectively.
“You really have to know what’s going on within each other’s organizations,” said Mark Sondergaard, VP of sales with WTG, a master agency.
Those were just some of the conclusions that channel partners reached Wednesday at an Agent-VAR Partnering Best Practices Workshop during the Channel Partners Conference & Expo in Las Vegas. Participants broke out into groups to discuss such issues as the cloud, compensation models and finding the right partner.
Catherine Lazarock, president of Simplicity Communications, Inc., said the agent/VAR partnership will erode if agents don’t give VARs leads that will work. She also emphasized that it was important to understand a partner’s business.
“You can do that over lunch. It’s not complicated,” she said. “In that conversation, talk about compensation and make sure they understand.”
Many agent/VAR relationships continue to be informal, online surveys commissioned by Channel Partners and CompTIA have found.
Lazarock indicated that formal agreements are recommended when dealing with larger VARs but that informal agreements are OK when sharing leads with smaller organizations.
Channel Partners and CompTIA have found that agents overwhelmingly are paying a commission to VARs while VARs are paying a referral fee, said Carolyn April, director of industry analysis with CompTIA, an IT trade association.
VARs, the surveys also have found, are by and large earning a bigger percentage of revenues from agent partnerships than agents are earning from VAR relationships.
“Frankly I would have thought it would have been flipped the other way,” Channel Partners Editor-in-Chief Khali Henderson said.
In a live online poll during the workshop that asked partners how they expected revenues from their partnerships to change in the next 12 months, most respondents indicated they anticipated either revenues to increase significantly or somewhat. A majority of the people in the room were agents.
The convergence of IT and telecommunications may help explain some of the anticipated growth in revenues.
Convergence is driving a lot of new relationships,” April of CompTIA said. “Cloud computing is driving a lot of new relationships.”
Still, the agent/VAR relationship is far from perfect. Asked in another live poll about specific pain points, many partners cited lack of commitment and dissimilar goals.
One participant alluded to the importance of building a deep relationship in which partners can trust each other to promote the right services and steer clear of stepping on each other’s toes.
And sharing leads may not be the most prudent business arrangement. One channel partner said his group determined that there’s always some disparity when an agent and VAR are sharing leads. In other words, one of the parties invariably will have shared more.
Establishing a compensation model “does put a more solid business practice in place,” he said.