VARs Need To Build Up Midmarket Relations

Many VARs have the midmarket dialed in and know just what these customers need and how to service them. But executives at a recent Everything Channel CIO roundtable at the Vision Events Midsize Enterprise Summit in Orlando, Fla., said a number of VARs still have quite a bit to learn about how to forge lasting channel relationships with midmarket firms.

Too many VARs still focus on selling point products and they don't always understand the needs of a midmarket company, the executives said.

"Anybody can walk in the front door and try to sell me something," said Bill Danuloff, vice president and CIO of The Gorman-Rupp Co., a Mansfield, Ohio-based manufacturer. "I'm a little leery that [the VAR] is only there because they represent IBM or HP. I don't have a problem buying from a VAR, but they need to understand my business."

Forging a strong relationship between a VAR and a midsize company is critical, he said, so VARs must be willing to put in the time and effort to build that relationship.

"I'm not interested in making a deal until there's a cultivation period to learn about [the VAR's skills]," he said. "If we build that relationship, the rest is going to happen. If I have a need, I will pick up the phone and call."

The CIO said one way to gauge the expertise and vendor compatibility is to test-drive the VAR first, by bringing them in to talk with your IT staff and have them do a small no-charge project.

But those experiences don't occur as often as they should, said Jim Murphy, director of IT for the City of Quincy, Ill.

An unpleasant experience with a VAR can have lingering effects for future business projects, he said. For example, Murphy remembers talking to a VAR about security solutions that CA brought to a previous Midsize Enterprise Summit conference. It was a good conversation, but he felt the VAR couldn't help him because he was based 1,500 miles away.

"My local person provides the same thing, so why should I go with them? After the event, the [California] VAR calls me five times complaining that I'm not [buying] from him. He even called the mayor of my city to say I was unfairly treating them," he said.

That's not the right way to build a relationship and it soured him from seeking new VARs, Murphy said.

It's difficult to build trust with a VAR if you're not sure of the VAR's intentions, he added. For example, earlier this year he was looking at a security solution. The vendor gave him two VARs to call, who came back with quotes that were 40 percent apart.

"That makes me leery," he said. "How do I know I can trust them when the prices are so far apart?"

VARs aren't alone in not understanding midsize businesses, said Niel Nickolaisen, CIO and director of strategic planning for energy company Headwaters Inc., South Jordan, Utah. Many vendors also fail to understand midmarket buying patterns, he said.

"I know what my [IT spending] portfolio is for the next nine months. Even if you walk in with the best thing in the world, let's talk in nine months. I can't do that many projects at once," Nickolaisen said.

"I'm smaller than Fortune 100, but I have the same business rules of complexity. I need to sit at the adult table when it comes to software or technology," he said. "I just need licensing in a different way."

Several years ago, when Nickolaisen was looking at an ERP solution, one vendor "couldn't get over the licensing hump," he said.

"They came to me and said I have to have a license for a warehouse user and a purchasing agent. For me, that's one guy," Nickolaisen said. "They said 'We don't license that way.' They lost the deal."

On the other hand, Nickolaisen recalls meeting solution provider Information Builders 18 months ago and being impressed with the New York-based company's business intelligence solution. He wasn't ready for an implementation at the time, but Nickolaisen heard from the VAR sporadically enough that it was not overbearing, and now they are working on a potential deal.

"He says he'll call me back in three months. He respects you. That's kind of nice. Eighteen months later, looks like we will do something," he said.