Vendor Loyalty Goes Both Ways
Posted: 6:27 pm
July 26th, 2008
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IT Business

I originally started typing this as a comment on Karl’s blog but realized that it would probably read better with some formatting. To save you some reading time, Karl’s general thesis is that vendor loyalty goes both ways and in order for VARs to be loyal to vendors, the vendors need to be loyal to the VARs. Please read it in its entirety before you consider my response:

From someone that is both a vendor and a VAR, I will tell you that most VARs do not see the venue as a two way street or a partnership of any sorts. Most VARs see that they are the ultimate trusted advisor to the client, with complete control and brand representation to the end client. Many do not even consider themselves to be a business but we’ll just keep this a single absurdity post.

VARs on one hand believe they are agents of the vendor and as such entitled to same or better perks than even the vendors employees, after all the VARs do bring in money while employees just collect it, right? VARs also like to pretend they are a trusted advisor, someone that is completely impartial to the solution being offered and only interested in their clients best interest. Again, please play along for a moment and don’t point out how the two clearly conflict.

I am VAR, hear me roar:

As a VAR I contribute to your company:

  • Revenues
  • Renewal fees
  • Reduced support costs as I usually handle Level 0 support

Consequently, I expect:

  • Everything your company makes, free of charge, without limits or restrictions of any kind.
  • Free support. Free escalation. Free direct escalation to the top support team.
  • Free sales assistance and marketing assistance $$$
  • Discounts on everything I sell so I can choose my markup
  • Bonuses and commissions on everything my clients buy
  • Free training, free conference passes, free branded training for my clients
  • Complete and total branding that removes the vendor out of the loop
  • Full legal protection from any software malfunction (bug) but do not dare enforce your licensing or legal terms on my clients.
  • No barriers to entry, no paperwork requirements – but keep all my competitors from getting into the program too.
  • No committments
  • No minimum sales to obtain any benefits

Basically, VARs expect to eliminate everything that makes the vendor profitable.

VARs demand, but are unwilling to commit.

From the vendor standpoint, if a VAR is unwilling to do any of the above then what exactly separates a VAR from a direct account?

You see, unless you are not willing to see the relationship as one that should drive higher profits to the vendor as a result of your relationship, you should not expect to see any higher benefits of being a VAR as opposed to being treated as a customer.

You can’t have it both ways. Either it’s a partnership, or you’re just an unreasonably needy customer. And we have a partnership program for a reason, so we can avoid unreasonably needy customers.

You want to keep a scorecard on your vendors, but many VARs get upset when the vendors keep the scorecard on them.

I’d love to see this as a two way street. But it’s not.

We all run greedy, profit oriented organizations. We all have to meet our needs which come before the needs of everyone else. We then look for people that see it our way and are willing to work hard on the same goals. We then look to the mission of our business, to serve our clients. From time to time we find a solution and a company that helps us achieve our mission, and we work with them.

The difference between the top 10% and the rest is that the top 10% sees the vendor as a direct company asset. Most people understand that this is a business and in business you are either making money or losing money. If you are making money, you are an asset, if you are costing money, you are a problem. Top 10% of partners sign extended support contracts, they get priority support plans, they come to conferences, they get staff trained, they get staff involved, they champion the products and their use, they help others get introduced to the solutions.

The 90% stick their hand out and say “gimme” and expect us to prove to them that they should be our partners. I am *not* kidding you. The 90% are the reason you get stuck in India on a support call, because you are no different than the consumers, customers, the IT janitor, the SPF. You have all produced the exact same benefit to my company and spent the exact same amount of money, that is why you aren’t treated any better. You don’t see this as a partnership, you chose to only expect benefit traffic coming in only one direction – towards you.

Thats the ugly truth behind business plans, products, partners, employees and everything else. And if that prompts an emotional response, then it’s probably a good indication you are not cut out to run a business. Sorry. Karl offers you the same conclusion, though delivered in a much softer blow. My goal is to help you understand it.

This is not a game.






 

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