General Consultant Discussion

break publisher dependency"" with Avalara the sponser? Talk about the fox guarding the hen house. Personally I'm not doing anything for Avalara unless a customer calls and asks me for something. Why should I waste any marketing efforts on a company that retroactively pulls out your recurring revenue and offers nothing more than a 20% 'happy meal' commission for bringing them a life time highly profitable customer I suggest we all do that and just maybe there is a line in the sand that publishers realize they cannot cross or they will have to build their own very expensive direct sales teams which aren't all they are cracked up to be

At least Avalara likes to buy drinks and are fun people to drink with...and why are you marketing anything but your services? The publishers just provide tools to use to solve issues for your customers.

Because installing avalara takes far less billable time than the effort it takes to market and sell it. you can't sell much of a recurring 'value' billing for it. If you are promoting a company's product that's a subscription, than if they make money year over year, why shouldn't I??? That's like saying Auto Dealerships shouldn't mark up the parts in their service department

@MarkChinsky - I'm not saying they shouldn't compensate us. I have always looked at what I do as representing the customers to the publishers, not the other way around.

At some point the channel is either going to charge for demos or the customer is going to completely self-serve on these purchases. In some cases where we have relationships with good customers we may make exceptions and undertake some free consulting but I think within two years that will be largely all done. Example: How many network consultants do you see trotting into their customer sites to ""demo"" the latest upgrade to Windows Server? These folks make very little (if any) margin on server and OS upgrades. Therefore the free dog and pony show has also largely disappeared for all but their largest and most important customers.

I also believe that most smart VARS are going to start charging third parties for demos and other ""co-marketing"". Why do marketing/webinars all for free when the vendors can and will change the rules of compensation and there's nothing that a VAR organization can do.

I agree with Wayne. We have never taken revenues from products but we charge for the entire process of helping our customers find and implement solutions. We are treated as a trusted advisor. It works.

If you don't charge by the hour, you can make money dealing with an Avalera-like installation. You create a proposal for ""Streamlined Sales Tax System"" with 3 deliverable options in it. The lowest price is where you point them at Avalera and offer ~2 analysis virtual meetings with the customer to review what they found and where they want to go, and leave it to them. The highest one includes the discovery and analysis, and installation/configuratoin and training and support. The middle one is less turnkey but you are along their ride to give them confidence. How much is it worth to them for peace of mind that the whole %^&* process will work? That's what you price the highest at. I've found that when you break ""an upgrade"" into its pieces, most of them want way more than just the software install/conversion. But they didn't know that the added education, coaching, etc. doesn't have to be part of the ""upgrade"". When you give them the choice, they'll almost always pay for the added service. Just don't bill it hourly!!

I hope we can talk @JohnShaver to expound a bit and MOTM on his process. It is really inspirational the way he puts his business on the other end of the spectrum from hourly billing and on-spec (free) demos.

Perhaps but you still only bill once for a service they get years and years of profits from. @GaryFeldman is looking into an alternative.

Both is good. If you can figure out how to get your organization on the approach I outlined and putting customers on annual agreement, you gain some independence.

@JerryNorman - I think independence is a myth unless you divorce yourself from the software completely. Annul maintenance is owned and managed by the publisher and the best you can hope for is a % of that revenue in exchange for managing the relationship. I think you can say by getting the customer on an annual agreement you can tighten your relationship with the customer and get them more value from the system in exchange for a more consistent revenue stream for your organization IMHO - All business transactions must have a give and a get or one party will end the relationship. It appears that Sage beleives they are not getting anything from the channel in exchange for mainetenance as they are doing the billing and they have taken over level 1 support with Silver and Gold. In the case of Sage the independence will be more people leaving the channel because they are not getting anything from the relationship.

Gary, my writing was sloppy. I agree completely with your 1st graf. If you don't have the software vendor relationship, you generally won't get the customer relationship opportunity. IIt is a necessary element of a VAR's strategic marketing strategy. And your assessment of the maintenance stream and why it is substantially dropping is also right: Sage has become skeptical of the value added by a majority of the partners in areas they think are valuable. What I'm emphasizing is that there are areas in the customer relationship that partners can deliver far more value than Sage can ... and that partners can succeed in those area far better if define that value to the customer through non-hourly billing approaches.

@JerryNorman - With that increased linguistic precision I concur with your assertion.