An avalanche in Hawaii? That’s what I’ve experienced this week at the annual RSPA INSPIRE Conference, being held Jan. 28-31 this year at the Waikoloa Beach Marriott Resort in Kona, HI. This isn’t a snow-powered avalanche; instead it’s a deluge of data related to trends and best practices in the POS channel that I’ve gleaned from the conference’s education and in-depth talks with C-level executives from reseller, ISV, vendor, and distributor companies.
Lesson #1: Sell as much as you can
Many leading resellers in the POS channel attend this event, and they’ve been generous sharing their success stories and best practices. A recurring theme (besides recurring revenue) has been increasing sales growth and merchant stickiness by offering a wide array of products and services. Every top VAR I’ve talked with has recently added several new product offerings – some of them going as far as acquiring small companies to quickly enhance their software linecard or hasten their advancement in managed services. Three of the four POS resellers on stage Monday for Business Valuation day own/invest in/have an ISV portion of their business. That’s something for other POS VARs to take note of.
Lesson #2: This is what a strong POS reseller looks like
I asked the Business Valuation Day panel, which included resellers Bob Bauer of BMC (Mich.), Phil McCarthy of DUMAC (NY), Don Potter of Pinnacle Hospitality (Fla.), and Kelli Stewart of Advanced Data Systems (Ind.) for their top-of-mind response to what’s made them thrive for decades. Here’s what they said:
- Always keep the customer #1
- Recurring revenue
- Systems and controls
- Continually reinvest in your business
- “Practice what you preach”; use technology to keep control of your business
Lesson #3: Resellers and ISVs really, really, really, really care about their independence
Recent ISV acquisitions by payment processors have given resellers plenty of heartburn. I knew that when we collected survey data for our Special Report on ISV Acquisitions in December, but to hear it face-to-face repeatedly in conversations is even more impactful. I even heard one executive go as far to use the term “IISV” to separate software developers who remain independent and agnostic for hardware and payment providers from those now controlled by a processor. I’m wondering if I should start calling some resellers “IVARs” because they’re not de facto controlled by their payments provider.
Lesson #4: The bigger the vendors get, the more the resellers fret
Tying with lesson #3, consolidation is a hot topic here at INSPIRE. You know the saying “only worry about the things you can control”? That sounds great on paper, but the person who came up with that statement never worked in the POS channel. Resellers are indeed at the mercy of their vendors, especially if you’ve only represented one ISV for years. Statements I’ve heard this week include:
- “2+2 rarely equals 5. And a lot of times it doesn’t even equal 4.”
- “What will the VCs backing these acquisitions do when the economy slows? What will happen to lower tier resellers when the VCs lose their patience?”
- We only sell ____ now, but that’s going to be changing soon.”
During his keynote talk Monday morning, Jeff Riley, the former Dinerware President who now serves as a Vice President for the Corum Group, advised, “Your fate should not be determined by your vendor relationships.” Yes, your vendor partners play a key role in your business, but they should enhance your business, not constrain you.
More from INSPIRE 2018
- Based on new information I’ve learned here at INSPIRE, I’ve expanded my ultimate list of recurring revenue products and services. The list now features 38 recurring revenue products and services that have been implemented by POS resellers in hospitality, retail, or grocery. I guess you can say I’ve made the list “ultimater.”
- I loved how Mark Fraker, the current RSPA Chairman of the Board and longtime VP of Marketing at BlueStar, opened the conference. He told the 150+ attendees, “You can’t stop the waves but you can learn to surf. We’re going to teach you how to surf our channel no matter what business model you sell against.”
- In my role as a Business Advisor at Vantiv, now Worldpay, I’m fortunate to look under the hood of many reseller and ISV orgs. I’ve seen that the winners perform consistently because of established operational systems, so I was very happy to hear DUMAC’s McCarthy say, “You don't want to be thinking of (best practices) only when you’re buying or selling a business. You want to be doing these right things all along.” Riley backed up that sentiment when he said, “How smart you are with processes, efficiency, and automation is how you become more like a software company from a valuation perspective.”
Vantiv, now Worldpay is proud to be a major sponsor of the Retail Solutions Providers Association and the INSPIRE event.