A guest post by Jim Ward, President of BrainSell, www.brainsell.net

When purchasing a CRM (Customer Relationship Management) software application, whether it be on premise software, in the cloud or software as a service, you’ll either buy through a value added reseller or buy direct from the software vendor.  Which is better for you and your company?

First,  let’s create an understanding of what buying direct versus reseller really means. It’s quite simple.

• A direct sales model for a CRM software vendor means the vendor employs their own sales force and you do business directly with the vendor.

• When buying through a VAR (Value Added Reseller), you’re buying through a company certified to resell the vendor’s software. VARs offer additional services such as training, development, consulting and implementation  to add “value” (the “V” in VAR) to the sale.

Software vendors make business decisions on how they sell their software.   Companies like Sage and Microsoft sell only through resellers.  Whereas Oracle/Siebel and Salesforce employ a direct sales force.  SugarCRM sells through a hybrid model (though increasingly focused on a reseller channel for sales).

Vendors who sell direct usually do so because they have a very complex offering that requires highly specialized sales people (Oracle/Siebel) or they have determined that having a direct sales force allows more aggressive selling techniques whereby sales people focus on one product; the vendor’s product

Buying CRM Direct Pros:

1. If your company is implementing a very large software project (Fortune 100, 200, or 500 companies come to mind) whereby there’s a corporate wide initiative, then having a direct-buy model provides a deep sales-consultative expertise on the product of choice. The employees of the software vendor will likely have deep resources to address a complex sale and implementation.
2. If you’re a “Do it Yourself” kind of company with internal resources then buying direct is all it may take to get your CRM project off the ground.
3. Direct sellers like Salesforce will be able to display a deep understanding of their CRM product.

Buying CRM Direct Cons:

1. Company’s like Oracle/Siebel are often very expensive projects that take a long time to implement.
2. The vendor only represents their product and therefore there’s little to no objectivity to making sure the CRM software is a good fit.
3. You will be aggressively sold to by the vendor.
4. Some direct sell companies use partners to provide services and you no longer are dealing directly with the vendor.

Buying CRM from a VAR (Value Added Reseller) Pros:

1. Many resellers have expertise in more than one product and will address your software requirements with an objective eye toward the best  fit software.
2. VAR’s provide full service offerings and have expertise in all areas of software implementation
3. VAR’s are certified in the products they resell by the vendor and are required to go through ongoing training.
4. VAR’s often have specific industry expertise and can share best practices. The VAR focus stretches beyond product sale.

Buying CRM from a VAR Cons:

1. If you’re a “Do it Yourselfer” the VAR has little to offer in value other than the product sale.
2. When engaging a VAR be sure to check that they are certified by the vendor, not all VARs are.
3. Some VAR’s are unwilling to share implementation services with your company’s internal resources.

Companies like Sage and Microsoft sell through partner channels only. These vendors decided that this model allows them to extend the expertise of the VAR to more potential customers.  Thus you’re not limited to vendor resources which could easily become over utilized. On the other hand, companies like Netsuite tend to sell direct – Although these companies may use their partner channel to perform services to those companies who need professional assistance.

If a company uses both VAR’s and a direct sales channel and you expect to need the services of a VAR, buying the software through the VAR creates a value proposition that the VAR will not ignore. You’ll create a more profitable relationship.

SAP, Salesforce or Oracle/Siebel CRM implementations that fall into a sizeable implementations may require company resources and expertise that can only be developed by those employed and consistently trained on their complex offering. You may also find that using Tier 1 consultants (Accenture) a part of such initiatives.

There are many things to consider when investing  in a CRM system. Think about your company’s needs and resources good and hard before making the jump. Often, companies opt for the “Do it Yourself” approach and never get the project completely done.

About BrainSell

Founded in1994 and headquartered in Ipswich, Massachusetts, with remote offices in Ohio, Virginia, Georgia, New Hampshire, New York and Maine, BrainSell Technologies LLC services have expanded up and down the eastern seaboard and to the mid-west. BrainSell is dedicated to perfecting customer relationship systems for each client to help increase productivity and profit margins. BrainSell provides comprehensive ERP and CRM solutions and services, including training, implementation and software development. Visit www.brainsell.net or call (866)356-2654 to learn more about BrainSell Technologies.

What are your thoughts about buying CRM direct or through a reseller? Please add your comments. You may also be interested in an earlier Sales Ops Blog article.  A Three Part CRM Adoption Plan.

1. Teaming: Online And Direct Sales Channels