In my last blog post, I provided analysis plus highlights from RetailNOW 2018, held Aug. 5-8 at the Gaylord Opryland Resort & Convention Center in Nashville. To steal a line from every middle-of-the-night infomercial, I’m here to say today, “But wait – there’s more!” These additional observations from RetailNOW are available to you for the low, low price of free (which you can make in three easy payments; operators are standing by).
“Recurring revenue doesn’t suck”
In his “Demystifying Managed Services” breakout, Chris Rumpf of VAR/ISV Flyght shared several best practices related to transitioning away from the break/fix business model. Enhancing his high-energy presentation were live snap polls conducted with the attendees. (God bless smartphone technology.) Rumpf recommended resellers focus on increasing their average recurring revenue per location – meeting or exceeding $800 per location per month – and it appeared most of the attendees had yet to hit that standard. The snap poll of 28 VARs showed that 64% were under $400/month with 43% between $200-$399/month. Only 22% of the room was earning $800 or more in recurring revenue per location each month.
The main avenue to increasing that monthly recurring revenue figure is offering and selling more products and services. Rumpf said a reseller’s first step should be “Do 10 Things Ridiculously Well” and then grow your offering list to 20 as quickly as prudent. When the room was polled, only about a third (35%) said they currently meet or exceed Rumpf’s 10-Thing threshold. The poll also showed that 23% offer between 6-9 recurring revenue products/services while 35% are currently between just 3-5.
In addition to automating and standardizing your organization, Rumpf recommended resellers be brave and charge more for their services. “Price yourself high by providing more value,” he said. “Make sure you price based on what your business needs, not based on what your competitors do. In our business, it took us three years to get off the ground and automated internally, and it was so worth it. Recurring revenue doesn’t suck.”
POS VARs: Meet Wi-Fi Marketing and Receipt Content Management
Rumpf shared his “easy list” of 14 products and services that should be offered as-a-Service by point of sale resellers: POS, merchant services, firewall management, network services, managed wireless, internet service, VoIP phone service, television service, online ordering, managed antivirus/system maintenance, surveillance/access control, digital signage, above store management/reporting, and stored value (gift/loyalty). That’s a great start, but what’s the full list you can choose from? Throughout 2018, I’ve shared my collection of 40 recurring revenue products and services offered by POS resellers – and I’m expanding it to 42 based on what I learned at RetailNOW 2018.
One reseller shared with me at Monday night’s Worldpay partner party that he’s now offering “Wi-Fi Marketing” as-a-Service. He uses Zenreach to offer restaurants (at a rate of $200 per month) the ability to gather email addresses from customers in exchange for using the free Wi-Fi. Customers only have to log in once, and the restaurant is then able to serve them special offers, surveys, and other marketing messages via email. If a customer rates the restaurant with 5 stars, they’re directed to the restaurant’s social media outlets to leave a public rating. If the customer gives 3 stars or fewer, they’re asked to share a private comment with restaurant management. This reseller pays Zenreach $120/month for this service, so he nets $80/month ($960/year) without adding overhead to his organization.
The other new recurring revenue service I discovered is “Receipt Content Management” which was explained to me by David Salisbury of Star Cloud Services at the Star Micronics booth just before the show floor closed. After the receipt is printed, a special coupon or promotional offer is printed and handed to the customer. The merchant pays the reseller $20 per month to manage the content using a drag-and-drop software program that didn’t appear to me to require graphic design expertise. Salisbury said only a handful of VARs are executing this just-launched service but he hopes for exponential growth over the next 12-18 months. Star doesn’t charge extra for this service, so the VAR could earn $240 per month per location (or more if they follow Rumpf’s advice) with minimal additional internal labor.
6 quotes & quips from RetailNOW 2018
“Great things never came from comfort zones.”
Mark Fraker, VP of Marketing at BlueStar and outgoing RSPA Chairman of the Board, during the RetailNOW opening general session
“We can’t have an elite team without elite people.”
John Kirk, RSPA President and CEO
“You’re not defined by your setback. You’re defined by your comeback.”
Robyn Benincasa, RetailNOW 2018 keynote speaker
“If your customers call you because there’s something wrong, you’ve already failed them — they have downtime. Managed services helps you be proactive.”
Mike Monocello, Co-Founder of XaaS Journal and DevPro Journal
“When we were ready to sell — physically and mentally — we got a formal valuation of our business from an advisor. There’s value doing this on an annual basis.”
David Shaw, Postec Chairman of the Board
“You need to adapt: identify what sources are leading to the most traction, what statements are clicking with people; create more tailored outreach based on sub-groups and where they see value; be patient, and constantly work at it.”
Ted Kingsbury, Next Gen Community keynote speaker
Back to the future
I asked in my prior RetailNOW blog post, “Who are the retail and hospitality solution providers of the future? Who will walk the show floor at RetailNOW 2023?” Possible answers are born-in-the-cloud software providers, ISOs, IT MSPs, e-commerce providers, or – a pessimist might predict – none of the above. I hope in five years the millennials pictured above will be there to lead the way for the rest of us. Ryan Williams of CBS NorthStar, Rick Feuling of RITE, Justin Wells of DCRS, Matt Swanson of North Country, and Jared Schum of Spark Solutions (left to right) were awarded grants from the Next Gen Community and will attend the RSPA’s Inspire executive conference in 2019 thanks to the community sponsors.
In my opinion, this is the most important sub-community inside the RSPA and maybe in our entire industry. We need strong leaders to pave the way for the next generation of solution providers, and they won’t be groomed by accident. Immersing with veteran execs at Inspire is a tremendous place to start. It worked for me.