Altaro Software develops backup solutions for small and mid-market businesses. The company was founded in 2009 and has already onboarded more than 5,000 channel partners in its reseller program. Eric Krauss, VP of Sales for The Americas at Altaro, shares advice for other ISVs who are considering starting a channel program. Krauss discusses why Altaro decided to launch a channel program, onboarding and training best practices, and balancing channel and direct sales.
Why did Altaro decide to take a channel-first sales approach?
Altaro has been focused on the channel because it allows the company to achieve a much higher level of sales success without having to manage a growing and costly direct sales operation. This strategy allows the company to direct more of its resources toward product development as well as customer service and support, which are key points of strength for the organization. Since initiating an indirect sales force, the company has grown its partner ecosystem significantly and now boasts more than 7,000 partners globally.
What should other software companies consider before making a run at the channel? What are the pros/cons of working with resellers?
While growing a partner-based sales organization requires fewer financial resources, it does require a significant investment in time allocated to program development, monitoring, and management. The support infrastructure to host an indirect sales operation also requires sales tools, sales support, sales incentives, and a dedicated team of professionals to ensure partner success. When considering the channel as a route to market, identify whether or not partners already exist in the category which you will be selling into. Perhaps one of the most difficult steps to building a profitable partner network is aligning with channel partners who already sell into the space you are trying to access and have both a business and technical understanding of the market need.
What onboarding best practices can you share with other software companies who are looking to start a channel program?
The newest approaches to channel partner onboarding have been tied to managed services, where partners are delivering IT services based on the software. Onboarding strategies for this category of partner is tied directly to the experience level of the partner. Larger operations will have teams with a wider range of skill sets across applications and will typically have experience in your area of focus. Smaller MSPs, on the other hand, will typically require various amounts of training to fully orchestrate and properly deliver services based on the vendor’s solution. Regardless, a training and sales group should be put in place to ensure the proper education and execution of the software-based service.
In the case of Altaro, our channel program and onboarding approach was created with two goals in mind – to reduce time to revenue with speedy deployments of the software or service, and to help our partners become more successful in growing their backup storage and managed services business. With that as our starting point, we worked backwards to develop best practices to help accomplish that goal. A few of these include:
Our partner program consists of three tiers (Bronze, Silver and Gold) for resellers, and an MSP-specific track for our new dedicated MSP partners. Each tier offers an increased level of discount as well as a greater opportunity for marketing and lead sharing. All our partner levels have access to Priority Technical Support and Customer Service, as well as product training and certification programs. We also provide our Cloud Management Console at no cost, which helps partners manage all of their clients more efficiently in a multi-tenant environment.
What kind of training is most useful to your reseller partners? How can software companies ensure reseller partners will have success selling their solution?
Different training styles meet the preferences of differing partners. While many partners would prefer onsite support, others find that online or phone support is more timely and resource efficient for the partner. Altaro offers onsite, phone, and online support. We give partners the option of selecting which approach works best for them.
Regarding sales success, many vendors provide the basic pillars of a successful channel program, including a healthy margin, effective tools, plentiful resources, training, deal registration, and so on. But at the end of the day, if you as a vendor are not easy to do business with (i.e. your processes are complicated), or you can’t support your product effectively, you will lose trust in the eyes of the partner. As a result, all of the pillars you have in place will not keep your partners from gravitating elsewhere.
How do you balance keeping reseller partners happy while also trying to grow direct sales?
This is done several ways, including separating direct versus indirect sales by region (i.e. Europe vs. the Americas) and by customer classification, including the size of the customer. Many vendors make distinctions between SMB/SME sales and enterprise sales, which tend to be much more hands on and resource intensive. Addressing any possible concerns and establishing the rules of the game up front is the best way to start with a clear understanding between both parties.
What other advice do you have for software companies related to VAR/ISV partnerships?
Organizations entering the channel must absolutely stay focused on maintaining attention to detail regarding the quality of their products and/or services and the high level of support and customer service provided to partners. Furthermore, keep the partner program fresh and up to date. If your program is differentiated from competitive programs, this will help partners win business and stay relevant as the market changes.