Unlock the Channel: New Guide to Leveraging Value Added Resellers

February 25, 2015

Success is never a solitary achievement, particularly in the software industry. From design and development to deployment and distribution, software companies tap into a wide spectrum of skill sets and networks in order to bring their visions to life by putting their products into the hands of end users.

Traditional software companies use many different channel marketing tactics to expand their reach and reduce acquisition costs. They create market leverage through sales-focused channels like affiliates and dedicated resellers as well as technical channel partners like system integrators. But, for two reasons, these kinds of partnerships are not usually a good fit for today’s B2B SaaS software company:

  • SaaS solutions don’t generally require an intermediary: They are typically easy to find (online accessibility), deploy (no installation or integration required), and use.
  • The SaaS licensing model isn’t designed to deliver substantial up-front revenue to the channel partner: By their nature, SaaS products aren’t front-loaded to deliver quick financial gain. With a SaaS product, resellers have to either settle for a fraction of the revenue they would receive from a perpetual license vendor, or get a cut of subsequent annual SaaS subscription fees. The first option is not appealing to the channel partner, and the second isn’t smart business for the SaaS vendor.

Value-added resellers (VARs), however, are channel partners who deliver the business process and services your end customers need to successfully implement your software solution.

The service provider, or VAR, derives the lion’s share of their revenue not from a sales commission, but from the related services they bill directly to the customer. While still technically a channel strategy, this kind of partnership requires an entirely different mindset and tactical approach. It is a long-term play, not a quick fix. Success requires a fair amount of due diligence as well as a healthy serving of startup agility.

Champions of the channel must be able to inspire a company-wide paradigm shift that considers the channel as an integral part of the organization instead of an expendable third-party.

It’s not an easy road, but SaaS companies that are getting it right (like HubSpot, Intronis, Optimizely, Pantheon, and others) are reaping benefits beyond what was possible with the old channel model. Through more deeply collaborative partnerships, smart B2B SaaS companies are gaining a market advantage with stronger acquisition and retention. In addition, the VAR channel is providing them with critical insights that positively influence everything from product development to positioning.

Free eBook: The Complete Guide to Channel Sales & Marketing

For all the benefits, however, one thing the channel won’t provide is an immediate fix to marketing woes or a quick boost in revenue. Building a stable and profitable SaaS channel program is a complex undertaking that requires patience, vision, and expert coordination of resources and leadership.

That’s why we’ve created our newest eBook: The Complete Guide to Channel Sales & Marketing.

It’s a clear, actionable playbook, written to help you:

  • Cultivate the right mindset for channel success
  • Craft a complete channel strategy
  • Build your team
  • Execute your plan
  • Know what to measure
  • Turn your program into a sustainable, scalable machine

Download the guide below. Along with expert advice from industry veterans you’ll also get a behind-the-scenes look at how companies like HubSpot, Optimizely, and Pantheon have developed industry-leading channel programs.

Photo by: Kaje


<strong>CeCe Bazar</strong> is an Associate on OpenView's investment team. She was previously a Sales Strategist also at OpenView.