I feel your pain.
I’m told by resellers and ISVs the main reason they don’t attend trade shows and conferences is time constraints, and this is the second consecutive week I’ve flown from Pennsylvania to Florida to attend a POS channel conference. Last week I participated in the NCC User Conference in Daytona and this week I attended Retail IT VAR of the Future in Orlando, so now I’m waaaaay behind on my day job.
That’s actually a headache I’m happy to have. I enjoy learning from reseller and ISV executives at these events, and I’m thrilled to act as your eyes and ears (every other body part is your responsibility) and share what you missed.
For highlights I gleaned from the NCC Conference click here, and for top takeaways from Retail IT VAR of the Future, just keep on reading. After attending these two events, I feel I’m even more in tune with the strategies POS resellers and ISVs must embrace to thrive in 2017 and beyond.
How To Influence Retail Decision Makers
One of my favorite colloquialisms is “all hat, no cattle.” It’s a term (used most often by ranchers) that describes a person who is all talk and no substance. Jim Thompson, the CFO at Cavender’s Western Outfitter, said on the Retail IT VAR of the Future stage that resellers who overpromise in an attempt to win his business are sure to fail.
“We’ve had people who promise the moon and then deliver a MoonPie,” said Thompson, who oversees budget planning for Cavender’s 80 locations. “Winning our business comes down to trust and integrity. We like to see you bring operational people with you on your sales calls. We want the people who are going to be doing the implementation there because they tend to have a lot of common experience with our people. What can your system do and what can it not do? Give us a lot of details how you’ll satisfy our requirements.”
Thompson said communication and timing also play a key role in determining if a reseller will win the project. “If you can’t talk our language, the whole project bogs down and gets slow. They might think we have a certain infrastructure in place, and we actually don’t. They assume we operate a certain way, and we say ‘that’s not us.’
“All your systems can pretty much do the same thing, so timing is a big thing,” Thompson said to the over 100 channel executives in attendance. “Can you do it in the time we need it? We’re in the middle of something now they told us would take three months and we’re already into the ninth month.”
Dedicate Resources to Payments
During my breakout Q&A with BSM editor Abby Sorensen, I was asked, “What are Vantiv’s most successful VAR and ISV partners doing well when it comes to selling payment solutions?” The answer is dedicating resources to payments, because that generates additional high-margin sales for you. Hardware margins continue to shrink, and the way to make money going forward is through residual income.
Here’s an example I shared of how that focus works for one Vantiv partner. They’re a medium-sized reseller (around 10 employees) in the Northeast U.S. The main way they dedicate resources to payments is by using only one payments partner. Instead of learning a little bit about several different payment providers, they understand their one partner intimately. They don’t spend overhead on nickel-and-dime issues talking with other payment processors and learning their systems.
The owner treats payments like a division of his business. He receives and studies reports, he understands how to offer payments and security to his customers, and he makes sure his staff sells payments religiously. This reseller is generating between $16,000 and $23,000 in residual income each month. That’s over $200,000 a year just in payments revenue.
How “Technical” Should Your Salesperson Be?
That was one of the questions posed to a panel of POS solutions providers: Brad Jarrett, CEO of Alert POS; Michael Tash, Co-Founder/VP of Essential Systems Solutions; Joe Creegan, President/GM of CardPayment Services; and Erick Wilson, President/CEO of TEC Works. Let’s hear their unvarnished answers.
Jarrett: “Hiring a salesperson is a 50/50 shot, and usually you don’t find out until you’ve spent a lot of money on them. A salesperson needs to have a good technical background or they need to be coupled with someone who does. They have to have all the answers before the sale, and a technical person can do that. … We’re not talking ‘technical’ in terms of people who install networks and fix computers. The world today knows their technology, they know their tablets. Your salesperson needs to be able to talk about applications and the impact they will have on the business.”
Creegan: “I steal (salespeople) from the competition. That’s my first line. Then I see if they have related experience, like selling copiers. The next level is do they have experience in the restaurant industry? If they don’t have any of those, do they have a lot of contacts in that industry?”
Tash: “Before I used to do just one job interview, and 50% was a good percentage for us. We just hired two sales reps, and they each had four interviews. We had them interview with different people in our organization to see how they interact with different personalities and see how they deal with them. They fit well with them so we hired them even though they didn’t have a technical background. One was a restaurant manager, and the other was a bartender.”
Wilson: “We look for non-technical people. Most of the customers we’re talking to are not technical. They’re intimidated by technical people. We let them talk more and ask questions. That information then helps our system engineer help that salesperson to develop the quote. … I’d say 90% of the people we interview are afraid to ask for the sale. If they don’t ask for the job, we don’t extend an offer to them. We’re also big on follow-up. If they don’t reach out to us and follow-up with thank yous, we don’t want them. We won’t hire them.”
Meet The POS Competitors You Didn’t Know You Had
Tom Clancy and Gary Power don’t claim to be POS experts, so why were they on the stage at Retail IT VAR Of The Future? Because these MSPs (managed services providers) from New York City are stealing business from traditional POS resellers.
Clancy, the President of 25-employee Valiant Technology, says being software agnostic is key to his winning restaurant business. “I’m not a salesperson for a particular brand; I’m just your trusted advisor,” Clancy said he tells merchant prospects. “We’re basically ripping business away from someone who’s wearing a vendor’s logo on their polo shirt. We say, ‘Choose whatever software you want. I’ll make sure it’s good, clean, and right.’ … People don’t want the best point of sale provider. They want a trusted consultant. I let them know I’m absolutely general and agnostic. I can come in and solve any of your problems. Any layer in the technology stack, I have relationships with those vendors. I don’t wear the polo shirt of anyone but Valiant. I just want to be your trusted advisor. You need someone who is loyal to you first, and that’s my job.”
Power, the Co-Founder and Director of Client Services for Power Consulting Group, says applying standards he developed as an MSP is one of his keys to breaking into the POS world. “Make sure the client is focusing on the standards you’re providing, not the other way around,” Power said. “Make sure you have KPIs and that your team sticks to those KPIs. Every tech needs to provide the same thing. Give them a list of ‘don’ts’ so they’re never providing a stupid response.”
Power talked about a restaurant deal he won in part because of standards. “Not one thing in that restaurant was the same – not one piece of equipment. And all the equipment was located over the stove. It was ridiculous. Our first goal was to standardize with them in Dubai that turned out to be a two-day project. Without our standards, that would have been a three-week disaster.”
Also key to these MSPs is expanding the system beyond the POS. Clancy and Power mentioned internet, security, cloud services, backup and disaster recovery, WiFi, wireless, phones, web hosting, email hosting, lighting, audio, and Facebook services among their suite of offerings. Why go to that extent?
“Recurring revenue, recurring revenue, recurring revenue,” Power said. “If you don’t know what you’re doing on cloud or backup, find a partner and learn that way. Get yourself a business continuity program for your clients – they need this and they want one-stop shopping. You’re likely saving them money in the long run. They’re happy to have one bill and know we have their back.”
Said Valiant’s Clancy, “Every restaurant has a website, right? So why don’t you host it? Everyone has email; you should host that. Tell them, ‘Instead of an AOL account, I can get you an email address that says FranksBistro.com. Wouldn’t that be better?’ Mail hosting, web hosting, phones, internet service. Get them used to you providing all those services for them. … I set up the infrastructure. And once you let the camel’s nose in the tent, your tent will end up full of Valiant-shaped camels.”
Managed Services In A POS World
Chris Rumpf, the President of Flyght POS and an RSPA board member, shared with the attendees how he pivoted his business from a struggling reseller to a thriving MSP. Rumpf provided me with great quotes recently when I asked him to weigh in on Vantiv’s Automation Software survey, and he delivered on the VAR Of The Future stage as well. Here are some of his most memorable and insightful statements about managed services for POS resellers:
- When you automate what you provide, things change for you. You lower expenses and your profits go up.
- When a merchant calls you all the time and you don’t charge them, they’re getting value for that conversation and you’re not.
- “Partners” are disruptors. “Dealers” are lazy. All your employees need to become customer service reps, salespeople, and, most importantly, mini-CEOs.
- When tracking your KPIs, everything doesn’t have to be digital. You can have a board in the office that you put checkmarks on. It’s okay to have folders. Just make sure it’s simple and consistent.
- Send a one-question survey after each install. You’ll get about a 40% response rate, and then you can understand what you need to work on.
- If you have a KPI that’s tied to a specific role, you can now have a conversation with an employee or contractor about measurement, not semantics or subjectivity. You’re not angry with them; you just talk about the difference. Separate the people from the problem.
- Is it easy to do these things? Actually it is. Staying consistent at these things is the hard part.
- Through our PSA (professional services automation) software, for $69 per month per user, we automate billing, collections, ticketing, agreements, CRM, marketing, quoting, expenses, timekeeping, and payroll.
- Through our RMM (remote monitoring and management), which is integrated with our PSA, we automate backups, migrations, maintenance, antivirus, Windows updates, branding, system lockdown, system disable and enable, and asset tracking.
- For the customers who pay us basically an insurance policy each month for us to keep them up-and-running, our effective hourly rate is $2,100. Our staff spends less time on those core tasks – we automate most of it.
- Adopting a PSA is a pain in the butt, but if you can dedicate an hour a week or a night a week, you can build this out slowly. Or you can write a check and someone can build it out for you. Our biggest problem was ticketing, so we started there.
The 2017 Retail IT VAR of the Future Conference was held April 4-5 at the DoubleTree Orlando at SeaWorld. The event was hosted by Business Solutions Magazine, and Vantiv was proud to be a sponsor once again this year. For more information on Business Solutions or to subscribe to their free magazine and newsletters, visit www.BSMinfo.com.