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VARs respond to low marks on deal registration, closing sales leads

Solution providers say they sometimes avoid deal registration and sales lead generation programs because they don't always work.

IT solution providers are speaking out against vendors that gave their channel partners average marks in a recent Forrester Research report, particularly in the areas of deal registration and sales lead generation.

Forrester surveyed 20 vendor channel executives, who said their partners' participation in deal registration programs is just average, and their nurturing of vendor-provided sales leads is below average. But in response, solution providers told they don't always register deals because they fear vendors will steal their business, and a lot of the leads they get from vendors are, as one partner put it, "garbage."

Deal registration, a feature of most channel programs, lets partners claim a prospective sale -- usually above a certain cost threshold -- and protect themselves from poaching by the vendor or other partners. Many vendors also give partners discounts or rebates for closing registered deals.

Despite those perks, many solution providers feel that registering deals is a surefire way to lose good customers to vendors' direct sales teams. That has been a huge point of contention in the Oracle world.

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"Before, partner deal registrations went into a completely separate database, where the Oracle direct reps could not see them," said one West Coast Oracle partner who asked not to be identified. "The [Oracle] channel manager then had to check the partner database and then look up the lead in the in-house direct database and verify that the lead wasn't there. And lo and behold, it usually was. Now, when the partner registers, the system automatically populates the forecast on the direct sales database, and the direct reps can then see for themselves where partners are working."

That makes it simpler and faster for Oracle reps to take channel deals, the partner said.

VMware's direct sales team also has a habit of going after customers as soon as partners register deals, according to one Northeast partner who asked not to be identified. That's one reason deal registration participation isn't as high as vendors would like, the partner said.

"It's definitely a fear with VMware, because the VMware reps are very aggressive," he said.

Other deal registration problems

On a scale of 1 (poor) to 5 (excellent), the channel executives in the Forrester report gave their channel partners a 3.3 when it comes to participating in deal registration.

The fear of poaching isn't the only reason channel partners don't always participate. Some vendors don't offer any discounts or rebates for registered deals, so there's less incentive, said Paul Anderson, CEO of Novacoast in Santa Barbara, Calif.

"Deal registration in and of itself I don't give a crap about," he said. "It's not the deal registration. It's the money."

The way a vendor designs its deal registration program can also be a hindrance. One Juniper Networks partner said the vendor's program is cumbersome, and the incentives are complicated and ever-changing.

"We never know what kind of discount we are going to get," said the partner, who spoke on the condition of anonymity.

Juniper partners get varying discounts depending on their specialties, if they have dedicated engineers, and whether the customer is ordering or reordering a product, the partner said.

"I tell them the same thing all the time: Keep it simple, stupid," he added.

Sales lead generation: Quantity vs. quality

In the area of nurturing and closing vendor-provided sales leads, solution providers scored a 2.7 on the Forrester report. Some vendors do co-marketing with partners to generate promising, qualified leads, but in other sales lead generation programs, vendors just send lists of potential customers to partners, with nothing else to go on.

"I don't even know where they get them from," Anderson said. "They're usually garbage."

Dan Schinsky, vice president of enterprise solutions at Relational Technology Solutions in Rolling Meadows, Ill., agreed that some vendors' sales lead generation programs are subpar. His company, a major networking reseller, partners with Cisco Systems, Avaya, Juniper Networks, Symantec and other vendors.

"Companies give us these leads that are people who say, 'Oh yeah, I would love to hear from you,' and then we never hear from them again," Schinsky said.

For other solution providers, it's not the quality but the quantity of leads that's the problem. John Hendrickson, CEO of InterDyn Business MicroVAR, a Microsoft Business Solutions Gold partner in Roseville, Minn., said his company gets about half as many sales leads generated by Microsoft now as it did five or 10 years ago.

"The quality has always been mixed," he said. "Some are tire kickers. Some are already old. And some come just at the right time, and the turnaround is real quick. The quality hasn't changed, just the number."

And in some cases, both the quantity and quality of vendor leads is a problem.

"You give us one lead a quarter, and it's some 14-year-old kid in a basement," said Andrew Plato, president of Anitian Enterprise Security, a Beaverton, Ore.-based partner to Cisco, 3Com, IBM, Juniper, BlueCoat and more. "That's not a viable lead."

Selling solutions vs. point products

Another part of the Forrester survey that stuck out to channel partners was the matter of selling integrated solutions to business problems instead of point products. The vendor channel executives gave their partners a 3.3 in that category.

Selling an entire portfolio from a company is almost never possible, according to some resellers.

"Sometimes the customer wants a solution that could contain Vendor X for server, Vendor Y for storage and Vendor Z for software," Schinsky said.

Plato agreed.

"Cisco has some products that are OK to good, but they have a lot of products that are fair to poor," he said. "I don't want to sell those products. My company's reputation is on the line."

Large vendors with vast portfolios overlook the fact that some solution providers, like Anitian, are specialists in one or a couple of fields, and they may not want to expand into something that is not their area of expertise, he said.

"When Cisco comes and says, 'We want you to sell everything,' I say, 'I am not selling phones. I'm not in that business,'" he added.

Vendor-partner relationships create tension

Despite objections to certain parts of the survey results, some solution providers said they could understand why vendors' channel executives gave them the marks they did.

"In general, most of the manufacturers probably are disappointed with the channel, and I don't blame them," said Jack Kaiser, vice president of sales and marketing for International Computerware in Marlborough, Mass.

A lot of solution providers try to do too much, and as a result don't do any one thing particularly well, Kaiser said.

"There are a lot of average players out there and a few good ones that [vendors] count on," he said. "It's impossible to be experts in everything."

George Brown, CEO of Database Solutions in King of Prussia, Pa., chalked the survey results up to the underlying tension in vendor-partner relationships.

"This emanates over fear of losing account control," he said. "Both VARs and vendors want to tighten ties to the customer."

Senior news editor Barbara Darrow, senior news writer Rivka Little and news writer Colin Steele contributed to this report. Steele compiled the report.

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