Are VARs Implementing What They Preach?

By Alan Finlay, Boomtown

With the markets evolving at a whirlwind speed, it’s crucial to understand what it takes to stay relevant in the industry. This is especially clear in the VAR market, where companies are facing a serious challenge.

For years, VARs have provided excellent services like technology finding, installation, and training. However, the influx of competitors that provide similar services, but at a cheaper price has damaged their success in the market.

Those same services were the profit for VARs, but now they are offered for free. New companies are providing free hardware while having a monthly fee for services, which is a better option for many customers. You can’t easily compete with free.

Naturally, companies will always need some help with choosing the technology they use, but now it’s easier to connect with technology providers directly and for a lower price. It’s a paradox for VARs, in a way, that at a time where tech is more pertinent to businesses than ever, their work is becoming less relevant.

But the online channels have undoubtedly made it easier for companies to go straight to the source and cut out the resellers completely.

At the same time, it’s important to take a look at what the VAR customers want in terms of value. A recent study has found that 80 percent of B2B businesses want to have a customer experience of the same quality that consumers have.

While those numbers don’t seem necessarily bad, it’s staggering to know that 70 percent of businesses have changed their vendors in order to get a better customer experience and just 30 percent of them state that their providers give them an excellent customer experience.

The gap between what B2B businesses need and what vendors provide is obvious. However, it’s also an opportunity to evolve and satisfy those needs.

The key is adding value, which is already what VARs preach. But is it what they actually do?

Of course, adding value is never simple. It’s not just about beefing up your list of services,  being more available to your customers or even applying AP automation. Availability is already the norm in the consumer-centered industry.

Improving what you already have is just the start.

VARs, however, need to evolve in order to create profit from selling tech to B2B companies. The key to this is understanding what their customers need.

VARs And Adding Value In The Modern World

As it becomes clearer that the value they once provided is no longer that important, they need to move on to something different. It’s no secret that one of the biggest drivers of change in the market is the technology. It’s what got VARs into this challenging time, but it’s also what can help them redefine their industry.

One of the examples of what can be done is IoT.

More and more companies are showing interest in IoT - in fact, some predictions state that by 2025, more than 75.44 billion devices will be connected to the Internet of Things globally. At the last count, in 2019, there were more than 26.66 billion IoT devices.

This generates a new demand in businesses that need it to function or to improve their workflow. They will need someone to monitor their systems, manage them and solve problems on a daily basis. The best part is that there are endless connections between devices that need maintenance.

It offers a novel opportunity for VARs to find their purpose in this new world.

But they will have to shift their expectations and their business model. While they used to charge high prices for procurement and implementation, companies no longer need that. What they do need is someone to make sure that their systems are running properly at all times.

For example, they will no longer work on a short-term basis with businesses for a large sum up-front. Instead, their process will need to shift to accommodate the more long-term needs these companies have.

At this point, they will face challenges like the fact that companies won’t be willing to pay big sums of money up-front. This doesn’t mean that VARs won’t be able to have a profit, it just means that they will earn revenue on a more ongoing basis. Potentially, their earnings could be bigger this way than by charging at the start of the contract.

Their success will depend on:

• Their ability to maintain a strong relationship with their clients
• The quality of customer service and support they provide
• Accepting the fact that it may take them months to get the same amount of profit they would for a single-project contract

If VARs are looking to add value and run their businesses sustainably, these are some of the changes they will need to make. The rewards of this new model are not to be forgotten. Subscription revenue could outpace the one from the current model and retaining customers, while harder, is less expensive than constantly looking for new ones.

The only question is whether VARs are willing to apply their own premise at the expense of changing their operations.

About The Author

Alan Finlay is a Co-Founder of Boomtown, a company that helps organizations reduce the complexity of selling, activating, and servicing technology products used by real-world businesses. Alan is passionate about helping Boomtown’s partners achieve value from the platform and spends his time across marketing, customer success, and product.