Why Setting Expectations Is a Critical Part of ISV and VAR Partnerships

There’s more than pricing and revenue agreements that’s necessary to the working relationships between independent software vendors and the value-added resellers. Understanding this is important as the ISV segment gains ground as a payments channel, experts say.

It starts with communication, says Gary Liu, chief financial officer of Bold Integrated Payments and Tonic POS. “The other piece is setting expectations,” Liu told attendees at the Retail Solutions Providers Association annual conference RetailNow 2024 in Las Vegas this week. “The third piece is having aligned values.”

What does that mean in practice? “It looks equitable,” said Andy Dickinson, special projects manager and hospitality relationship manager at DCR POS, a Nashville, Tenn.-based point-of-sale system seller.

Closely connected is setting proper expectations, said Israel Morrison, director of sales and marketing at Retail Management Hero, a Sonoma, Calif.-based point-of-sale system provider. “Why is it important to set expectations?” Morrison asks. “The key reason is you’re looking to set the foundation.”

That involves how the relationship is managed and managing the expectations for the product, Morrison said. Doing that effectively means spending time upfront getting to know the product and the partner, he added.

“The VARs I see creating the most success are spending more time upfront evaluating that product,” he said, not only learning how it works and its capabilities, but evaluating it in different scenarios. Potential partners should ask how the software fits their customer bases and if any additional add-on products are necessary, he says.

A critical question to ask is how the ISV and VAR align when it comes to the product vision, Liu said. “I want to make sure we’re aligned when it comes to product vision,” he said. It’s important that ISVs communicate with the VARs selling their applications and vice versa, he noted. He said he knows of instances where software came to market that was not user-friendly. Clear communication between ISVs and VARs could have helped eliminate that issue, he argued. “The VARs are the folks on the ground,” he said.