The Power of VARs: Key partnerships for growth

Today, in part 2 of “8 key partnerships for growth”, we’ll look into the unique strength of 💎 Value Add Resellers. VARs sounds esoteric, but they're the secret weapon behind >30% of revenues at giants like Atlassian and HubSpot. Let’s dive in.

At the heart of VARs lies the powerful combination of your product and another company's human capital. They amplify your product and create a winning offering or a service for mutual customers.

These are typically SMBs, with a sharp focus on a specific domain, industry vertical, or region. Consider them as the trusted advisors within their spheres of influence. Their expertise is often high, but that comes with the caveat of limited geographical reach.

📊 How VARs stack up

Partner’s Expertise in Your Product: 🔺 High

Geo Reach: Low-Mid

Internal Investment Required: 🔺 Mid-High

Partner Collaboration Investment: 🔺 High

Commission: 15-30%

Global/large VARs are rare, examples: CDW, Dimension Data (in MEA), and Data#3 in Australia.

Your training investment in fostering VARs and building expertise in your products will be mid-high.

You may need many VARs scattered around the world, and your internal investment in managing them will be high. You'll need to create a partner program with rules, guidelines, and formalized training.

📈 VARs' amplification of your product can be worth it

Hubspot used marketing agencies who support SMBs with marketing strategy. They then implement their GTM plan and help to set the tech stack. Agencies became ardent evangelists of the HubSpot CRM platform to their clients.

In early days HubSpot discovered that selling through VARs led to LTV:CAC ratio of 📍 5.0 - vs 1.5X while selling directly.

So they flipped the structure of their sales. Initially: 12 reps selling directly, 4 reps via VARs. After 12 months: 2 reps selling direct, 📍 25 reps through the channel.

Today, out of HubSpot’s 1.7Bn ARR, 43% is via Solution partners.

Atlassian has 700+ VARs that generate a big part of their revenue.

💡 VARs are undergoing a renaissance

VARs have evolved and aren't just implementers of software. Rather, they're service providers incorporating SaaS into their portfolio, offering comprehensive solutions to their clients.

Clients like this solution approach - this shift is evident in the + 4% YoY increase in customer preference for buying from VARs (G2).

SaaS companies too are increasingly looking for partners with advanced capabilities that can boost customer success and promote adoption, consuzToday, in part 2 of “8 key partnerships for growth”, we’ll look into the unique strength of 💎 Value Add Resellers. VARs sounds esoteric, but they're the secret weapon behind >30% of revenues at giants like Atlassian and HubSpot. Let’s dive in.

At the heart of VARs lies the powerful combination of your product and another company's human capital. They amplify your product and create a winning offering or a service for mutual customers.

These are typically SMBs, with a sharp focus on a specific domain, industry vertical, or region. Consider them as the trusted advisors within their spheres of influence. Their expertise is often high, but that comes with the caveat of limited geographical reach.

📊 How VARs stack up

Partner’s Expertise in Your Product: 🔺 High

Geo Reach: Low-Mid

Internal Investment Required: 🔺 Mid-High

Partner Collaboration Investment: 🔺 High

Commission: 15-30%

Global/large VARs are rare, examples: CDW, Dimension Data (in MEA), and Data#3 in Australia.

Your training investment in fostering VARs and building expertise in your products will be mid-high.

You may need many VARs scattered around the world, and your internal investment in managing them will be high. You'll need to create a partner program with rules, guidelines, and formalized training.

📈 VARs' amplification of your product can be worth it

Hubspot used marketing agencies who support SMBs with marketing strategy. They then implement their GTM plan and help to set the tech stack. Agencies became ardent evangelists of the HubSpot CRM platform to their clients.

In early days HubSpot discovered that selling through VARs led to LTV:CAC ratio of 📍 5.0 - vs 1.5X while selling directly.

So they flipped the structure of their sales. Initially: 12 reps selling directly, 4 reps via VARs. After 12 months: 2 reps selling direct, 📍 25 reps through the channel.

Today, out of HubSpot’s 1.7Bn ARR, 43% is via Solution partners.

Atlassian has 700+ VARs that generate a big part of their revenue.

💡 VARs are undergoing a renaissance

VARs have evolved and aren't just implementers of software. Rather, they're service providers incorporating SaaS into their portfolio, offering comprehensive solutions to their clients.

Clients like this solution approach - this shift is evident in the + 4% YoY increase in customer preference for buying from VARs (G2).

SaaS companies too are increasingly looking for partners with advanced capabilities that can boost customer success and promote adoption, consumption, and renewals - see stats from Bain & Company on the slides.

So, as you strategize for #growth , consider the power of VARs. Their high-touch services and domain expertise might just be the missing link in your GTM strategy.