What is a VARPs?

1. Introduction

Value-Added Resale Partners, or VARPs, are key players in a partner ecosystem. These channel partners resell a vendor's products. They also add valuable services to these offerings. VARPs enhance the core product for end customers. This increases the total value for the buyer.

For example, an IT VARP might integrate software solutions. They could also provide implementation and support. A manufacturing VARP might bundle machinery. They could offer specialized training and maintenance. VARPs increase customer value significantly. They are essential for strong channel sales.

2. Context/Background

The VARP model has a long history. It began with early computing and hardware sales. Vendors needed partners to reach more customers. These partners also provided local support. Over time, services became more complex. VARPs adapted by adding specialized knowledge.

Today, VARPs remain vital. They help vendors expand market reach. They offer expertise that vendors may lack. This is especially true in specialized industries. VARPs are a cornerstone of many partner program strategies. They drive significant revenue for vendors.

3. Core Principles

• Value Addition: VARPs always add services beyond the core product. These services create more value for the end customer.
• Customer Focus: VARPs understand customer needs deeply. They tailor solutions to solve specific problems.
• Technical Expertise: VARPs possess specialized knowledge. This includes product features and industry applications.
• Market Reach: VARPs extend a vendor's presence. They access new geographic areas or customer segments.
• Relationship Building: VARPs build strong customer relationships. They often become trusted advisors.

4. Implementation

Implementing a successful VARP strategy involves several steps.

1. Define VARP Profile: Clearly identify the ideal VARP characteristics. Consider their market, skills, and current customer base.
2. Develop Partner Program: Create a structured partner program. Include tiers, benefits, and requirements.
3. Recruit Suitable VARPs: Actively seek out and onboard partners. Focus on those who align with your goals.
4. Provide Partner Enablement: Offer complete training and resources. This ensures VARPs can sell and support your products effectively.
5. Use a Partner Portal: Implement a partner portal. This centralizes resources, training, and deal registration.
6. Support Co-Selling: Establish processes for co-selling with VARPs. This includes joint sales calls and strategy sessions.

5. Best Practices vs. Pitfalls

Best Practices (Do's)

• Offer clear incentives: Motivate VARPs with attractive margins and rewards.
• Provide robust enablement: Equip VARPs with sales tools and technical training.
• Communicate regularly: Keep VARPs updated on product changes and strategies.
• Simplify deal registration: Make it easy for VARPs to register deals.
• Support through-channel marketing: Provide materials for VARPs to market your products.
• Foster collaboration: Encourage joint planning and problem-solving.

Pitfalls (Don'ts)

• Lack of clear program rules: Confusing terms deter potential VARPs.
• Insufficient training: Unprepared VARPs cannot effectively sell or support.
• Competing with VARPs: Direct sales teams should not compete with partners.
• Complex deal registration: Difficult processes lead to lost opportunities.
• Ignoring partner feedback: Not listening to VARPs can damage relationships.
• Poor communication: Lack of updates leaves VARPs feeling disconnected.

6. Advanced Applications

For mature organizations, VARPs can drive advanced strategies.

1. Solution Bundling: VARPs create unique solutions by combining vendor products. They add their own services and intellectual property.
2. Vertical Market Specialization: VARPs focus on specific industries. They develop deep expertise for niche customer segments.
3. Managed Services: VARPs offer ongoing management and support. This creates recurring revenue streams.
4. Geographic Expansion: VARPs help vendors enter new international markets. They navigate local regulations and cultures.
5. New Technology Adoption: VARPs can be early adopters of new vendor technologies. They help prove market fit.
6. Customer Lifecycle Management: VARPs manage the entire customer journey. This includes pre-sales, implementation, and post-sales support.

7. Ecosystem Integration

VARPs are integral to the entire Partner Ecosystem Operating Model (POEM) lifecycle.

• Strategize: VARPs help define market opportunities and target segments.
• Recruit: Vendors actively recruit VARPs to fill market gaps.
• Onboard: Effective onboarding ensures VARPs understand the partner program.
• Enable: Partner enablement provides VARPs with necessary tools and training.
• Market: Through-channel marketing empowers VARPs to promote products.
• Sell: VARPs execute channel sales with vendor support and co-selling.
• Incentivize: Proper incentives drive VARP performance and loyalty.
• Accelerate: VARPs contribute to faster market penetration and revenue growth.

8. Conclusion

VARPs are more than just resellers. They are strategic extensions of a vendor's team. They add critical value through specialized services. This enhances customer satisfaction and expands market reach.

A strong partner program for VARPs is essential. It requires clear communication and robust partner enablement. Tools like a partner portal streamline operations. VARPs are fundamental to successful channel sales and a thriving partner ecosystem.