General Consultant Discussion

At MOTM I sat in on the session (titled something like "Firm of the Future") which talked about ideas to modify the approach towards billing practices.

The general suggestion was to set up an Access Agreement with each customer (with choices for support level), and all billable services (like upgrades) quoted with 3 options (never doing hourly billing).

We've been using a similar hybrid type customer agreement for years, with certain things considered "support", and other things considered "billable consulting" (although the transition from hourly to quote based billing is an ongoing effort).

The question I have today is how to deal with grey areas that fall somewhere between support and non-support work.

We consider an error message within Sage 100 to be support (from a 2 minute fix to dealing with Sage / 3rd parties to get their assistance... all the same). We also consider "how do I" questions to be support. (How do I reverse a payment? What tables do I use in Excel to query inventory by Bin location? The OnSO value for item XYZ is wrong, can you fix it?).

I'm sure we have all dealt with the nightmare that is an error (crash) during a journal / register update. Getting the interrupted batch to post is usually not that hard but the fallout from such a crash can take hours and hours to scope out the data damage and fix the problems. Obviously the customer doesn't want to be billed for this work, but we don't warranty Sage 100 and our support plans are not priced to accommodate these situations. How do others deal with this kind of wild-card time sink? How do you approach quoting for raw data fixes when you have no idea the scope and effort that will be required?

Similarly, we don't offer accounting advice as support, and when a customer asks "why does my (module data) not balance with the GL?" it could be considered a simple system question (unposted DTR, direct GL entries to Control accounts...), but it could involve some in-depth data detective work to unravel what happened. (Recently we've had a couple of these traced to unreported crashes during posting that resulted in corrupted data which needed to be fixed manually). Again, how do others approach billing for services where you don't know the scope of what will be involved, considering push-back from customers on what they think should be included as "support"?

Additionally, how do you sell your support plan / access agreement with caveats around exclusions (e.g. raw data fixes after a program crash are not included).  Or - are you including these things in the scope of support, with your plans priced accordingly (scaring away more cost conscious customers)?

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Kevin Moyes
Technical Systems Analyst
Munjal White Consulting Co.
Toronto ON
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My short answer: 

I tell the customer up front if the service is going to be billable and let them know the cost. If their scope is pretty broad and the customer doesn't want to pay for an interim discovery type agreement then my price is going to be pretty broad.

Don't confuse "I'm afraid they might say no to my price" with the uncertainty of how to price/propose an additional fee.

• I have a written access agreement ( which 1 in 50 people read) which spells out billable vs covered ( I literally never have questions about what's covered unless the customer is a real D level who is on their way out )
• Price your agreement to allow for one or two grey area questions - what this means is if you sit down and think that a customer on average never calls more than 5 hours a year and you back into $1,000 per year ( 5 hours at $200.hr )  as your fixed access agreement then, IMO, you are miscalculating. Also build in the hand holding and administrative work required by virtue of being the point of contact for licensing questions.
• I've seen little pushback for quoting an additional fee for a service not covered under the terms of my agreement - those that push back tend to be new customers who are frequently only on Sage 100 for an interim time or they are VAR hopping.
• Last year I had someone who used way more than what I felt was covered under my plan,  I spoke with them and raised the fee significantly and also included the annual upgrade ( ever 2-3 years) as part of the ongoing fee. 
• If it's a good customer who pays on time and at a market-based rate - then if you need to take a loss on a stray project or two take the loss.
• If you use subcontractors pay the sub a percentage of the fixed price you charge the customer

You should not accept any new customers or orphans unless they go onto your Access Agreement.

​

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Wayne Schulz - Schulz Consulting - 860-516-8990
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All of Wayne's comments are part of the solution; I learned a lot by studying his practices.

Our approach is similar but different, so it's worth considering adding to your mix. 

1. I tried to emphasize the importance of the 3-level options in implementing access agreements ("good, better, best" as @Peter Wolf puts it) in my MOTM presentation. it takes a while to get the hang of but greatly simplifies the sales process. In my case, ​the main level differentiation is response time, but I also increase the of "reconciliations" and "data fixes" included. I also change the discount on upgrades across the levels. I put the differences into a grid so it's easy for customers to compare, and for us to educate them when we discuss out-of-coverage.

2. It is really, really important to think of these agreements as an "insurance portfolio." Some "policies" will have more "claims" against them than others, and some customers will have more "claims" in one year than in another. If you try to analyze time spent (there is no marginal cost, only opportunity cost since your analysts are salaried) too closely, you'll come up with the wrong answer. 

3. My goal in our agreements is make it clear that we try to pass our knowledge to them. The emphasis is on smooth running. So the incentive is on us to "idiot-proof" their installation as much as possible. When it's clear that their computer/network infrastructure is inducing corruption, etc., we tell them that either they must change the architecture or our price must go up. We rather they change the architecture since a customer with a smooth-running system is happier with Sage and happier with us. 

4. We have a standard "starts at" price for data corruption fixes, and for reconciliation efforts. If a customer's agreement doesn't include one, then we offer 3 options:
    Free: the relevant KB article. (they never take it, but they have the option to not spend money ...)
    Better: $$, but the fix might take a couple days to work in, it might be just for this instance, etc. 
    Best: $$$. Pretty fast solution. Flexible back and forth. Extra work to attempt to fix the underlying conditions, etc. 

5. For "Accounting problems" we offer coaching as the "better" option. We help them find the problem and tell them how to fix it. In this case our "best" is most expensive even though it takes us less time to do it than coaching. Coaching ultimately reduces their load on us in this insurance portfolio.

6. We purposely price our lowest level agreement to be obviously affordable. Very few choose it unless they are low-usage GLAPR customers who can't see a need for rapid response and other features that heavier, mission-critical customers need. Our goal is for them to know that they never get charged for calling, but they might get charged for solutions beyond phone-answers.

Please call me if you'd like to explore any of these further.

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Jerry Norman
VP, 90 Minds
Smartbridge Partners
512.419.1444 x112
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If you decide to go exclusively fixed price — practice the response to the question “so what are your rates if we just have a quick question/decide not to enroll in your plan?”

Until I got this down, I wavered all over the place and would swear to you that fixed pricing was unworkable and these gray area questions made it so.

Sage and almost every other publisher requires enrollment. They have no published pay-as-you-go rates.

So I did two things in response to the “so what are your rates”

1. We don’t have hourly rates. We don’t quote number of hours for projects. If completing [ insert project ] at [$ ] does not have value we recommend not continuing.

2. There is almost always someone who gambles, drops your support and calls back. For those I created a support incident which lasts no longer than a day, we will not respond to until 48 business hours have passed and the price is $x,xxx prepaid by credit card and here is the link online for you to pay.

I sell maybe two of these a year - which are usually evenly split between gamblers and new to me web visitors.

My purpose for having this option is only to be able to provide what I consider a “polite no”. I don’t want to sell these one-off cases but need a polite way to tell someone that I’m not the right fit ( don’t sell break fix hourly ) for them.


---------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
---------------------------------

In my access agreement I actually have four levels. The bottom one is for "no agreement." Its "starts at pricing" is at least 50% higher than that of the lowest agreement level, and response is next day or longer. 

I tried to make clear at the MOTM session that we never even imply hours, even for training. 

Wayne's line, "If completing [ insert project ] at [$ ] does not have value we recommend not continuing" is key. In my case, that [$] is the lowest of 3 options, but it is still central to pushing the customer to think about how he justifies the cost doing his "whim." I haven't yet had a customer I care to keep, a "C" or higher, think that was a ridiculous thing for me to say; the others are now somebody else's problem-child. 

------------------------------
Jerry Norman
VP, 90 Minds
Smartbridge Partners
512.419.1444 x112
------------------------------

Original Message:
Sent: 05-29-2020 08:19
From: Wayne Schulz
Subject: Discussion about strategy to deal with support vs billable work

If you decide to go exclusively fixed price - practice the response to the question "so what are your rates if we just have a quick question/decide not to enroll in your plan?"

Until I got this down, I wavered all over the place and would swear to you that fixed pricing was unworkable and these gray area questions made it so.

Sage and almost every other publisher requires enrollment. They have no published pay-as-you-go rates.

So I did two things in response to the "so what are your rates"

1. We don't have hourly rates. We don't quote number of hours for projects. If completing [ insert project ] at [$ ] does not have value we recommend not continuing.

2. There is almost always someone who gambles, drops your support and calls back. For those I created a support incident which lasts no longer than a day, we will not respond to until 48 business hours have passed and the price is $x,xxx prepaid by credit card and here is the link online for you to pay.

I sell maybe two of these a year - which are usually evenly split between gamblers and new to me web visitors.

My purpose for having this option is only to be able to provide what I consider a "polite no". I don't want to sell these one-off cases but need a polite way to tell someone that I'm not the right fit ( don't sell break fix hourly ) for them.


---------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
---------------------------------

Thank you @Jerry Norman and @Wayne Schulz very much for the tips and strategies​!
(Not even implying hours... is like resisting breathing, but I understand what you are going for).

------------------------------
Kevin Moyes
Technical Systems Analyst
Munjal White Consulting Co.
Toronto ON
------------------------------

Original Message:
Sent: 05-29-2020 10:55
From: Jerry Norman
Subject: Discussion about strategy to deal with support vs billable work

In my access agreement I actually have four levels. The bottom one is for "no agreement." Its "starts at pricing" is at least 50% higher than that of the lowest agreement level, and response is next day or longer.

I tried to make clear at the MOTM session that we never even imply hours, even for training.

Wayne's line, "If completing [ insert project ] at [$ ] does not have value we recommend not continuing" is key. In my case, that [$] is the lowest of 3 options, but it is still central to pushing the customer to think about how he justifies the cost doing his "whim." I haven't yet had a customer I care to keep, a "C" or higher, think that was a ridiculous thing for me to say; the others are now somebody else's problem-child. 

------------------------------
Jerry Norman
VP, 90 Minds
Smartbridge Partners
512.419.1444 x112
------------------------------


Original Message:
Sent: 05-29-2020 08:19
From: Wayne Schulz
Subject: Discussion about strategy to deal with support vs billable work

If you decide to go exclusively fixed price - practice the response to the question "so what are your rates if we just have a quick question/decide not to enroll in your plan?"

Until I got this down, I wavered all over the place and would swear to you that fixed pricing was unworkable and these gray area questions made it so.

Sage and almost every other publisher requires enrollment. They have no published pay-as-you-go rates.

So I did two things in response to the "so what are your rates"

1. We don't have hourly rates. We don't quote number of hours for projects. If completing [ insert project ] at [$ ] does not have value we recommend not continuing.

2. There is almost always someone who gambles, drops your support and calls back. For those I created a support incident which lasts no longer than a day, we will not respond to until 48 business hours have passed and the price is $x,xxx prepaid by credit card and here is the link online for you to pay.

I sell maybe two of these a year - which are usually evenly split between gamblers and new to me web visitors.

My purpose for having this option is only to be able to provide what I consider a "polite no". I don't want to sell these one-off cases but need a polite way to tell someone that I'm not the right fit ( don't sell break fix hourly ) for them.


---------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990