Hot Takes From RSPA INSPIRE 2017
“I’m talking with many people I never thought I’d have a chance to. I’m dating up – and it’s awesome!” That was how Chris Rumpf of reseller Rumpf Computer Solutions described the annual RSPA INSPIRE Conference, being held this year Jan. 29-Feb. 1 here at the St. Kitts Marriott Resort & The Royal Beach Casino. Vantiv is proud to be a major sponsor of the Retail Solutions Providers Association and the INSPIRE event.
While I wouldn’t have thought to use Rumpf’s terminology – maybe because I’ve been married for 12 years now – he’s exactly right that INSPIRE offers networking opportunities like no other conference. Since I arrived a day-and-a-half ago, I’ve already had in-depth talks with C-level executives from reseller, ISV, vendor, and distributor companies. I’ve picked up quite a bit of info from them that I want to share with you.
One of the biggest struggles I’ve heard from resellers and ISVs is finding and hiring good salespeople – in fact, I just had that conversation most recently with an ISV Friday afternoon. One of the hurdles is that you can’t see firsthand the candidate’s sales skills, and saying “sell me this pencil” doesn’t quite yield the data you’re looking for. A tip a reseller gave me here at INSPIRE was to ask sales candidates to prepare and present a PowerPoint on themselves. That way, you have the opportunity to learn about them, their organizational skills, their communication skills, their attention to detail, their critical thinking skills, and more.
Serving Merchants Better
I’m also always on the lookout for tips on how solution providers can better serve their customers. In my list of Guiding Principles for Growing the Value of a POS Reseller, we call this concept “ensure everyone continually obsesses over client satisfaction.” One POS reseller told me that giving everyone on his team access to real-time messaging tool Slack has greatly enhanced their service. “Service calls get routed there, and our response time is 10 times better than before,” he told me. “It’s generally now a five-minute response time. It’s great to watch how quickly issues are resolved.”
Compensating Sales Reps in the SaaS Model
Another reseller struggle is determining the best way to compensate sales reps, especially with the shift to the as-a-Service/recurring revenue business model. Resellers know how to pay a rep on an install where the customer pays up front, but what do you do for a $200-a-month sale? One reseller gives all the revenue from the first two months of the SaaS sale to the rep. Yep – they get it all, and if they upsell the customer later, they get commission on that, too. This structure pays a living wage to the rep and keeps them hungry to keep selling new customers.
Selling solutions as-a-Service is a big part of many conversations here at INSPIRE. Leading POS resellers are learning lessons and adapting their business methodologies. “In the past we focused on how large we could make the sale,” one reseller told me. “Now we focus on the lifetime value of the customer. We ask ourselves, ‘How do we maximize our revenues over three years?’ We lay managed services in top of what we already do for them.” To that point, I’ve been counseling resellers that their prior business model was a sprint, and now the Goddess of Commerce is requiring them to run a marathon. The sprint was selling as much hardware, software, and peripherals as they could in the initial sale; the marathon is how much technology and services they sell to the customer in the long run. And, just so you know, this marathon isn’t 26.2 miles; it’s a never-ending race.
Transitioning to the as-a-Service Model
Recurring revenue is “not that complicated, but you have to get moving,” one executive told me. “Migrating to that model will hit your top-line sales but the swing isn’t as deep if you manage it.” This exec has a message for resellers who are resisting making sales on a subscription model because of the impact it will have on their operations and their cash flow. “Your customers need to have the choice of monthly fees or someone else will provide it. It makes no sense to walk away from those deals and get zero instead of something.”
Increase in Self-Service Sales
One medium-sized reseller told me 2016 was his best year ever revenue wise, sparked by a sharp increase in self-service kiosk sales. He said the increase in the legal minimum wage in several states is driving this spike, and he expects that part of his business to continue to rise in 2017.
Are You Focusing Too Much on Pricing?
At a break during Monday’s general session, ScanSource POS/Barcoding President Paul Constantine said that the presentation reminded him of an important strategy lesson which I think applies to resellers. Despite customers talking about it all the time, your core value proposition isn’t your price, so don’t focus too much energy there. Of course your price has to be in the ballpark of acceptability, but what truly differentiates you is the customer experience and services you provide. If you innovate to become head-and-shoulders above the competition in those two areas, you have a winning and sustainable value proposition.
Watch This Space
The keynote speakers for INSPIRE 2017 are the authors of The Roadside MBA, a great book that draws lessons from interviews with small business owners across America. Authors Michael Mazzeo (pictured above), Paul Oyer, and Scott Schaefer are speaking here Monday through Wednesday. Keep an eye on this blog later this week for some of the best quotes and lessons from The Roadside MBA crew. Click here for my summary of the book which also is on the 2017 edition of my Roddy’s Recommended Reading list for channel executives.
INSPIRE 2017, the annual executive-level conference hosted by the Retail Solutions Providers Association (RSPA), is being held Jan. 29-Feb. 1, at the St. Kitts Marriott Resort & The Royal Beach Casino. For more information on the RSPA, go to www.gorspa.org.