General Consultant Discussion

The state of the online lead marketplace. March 2013 edition. Listen to the attached MP3 from a web lead. I have no idea who it is. He apparently doesn't either as he did not leave a name. My guess is it's going to be some IT guy working on behalf of a customer (or a slight variation).

Sad..

I recognized this as a lead from a former Sage partner. So I call and the conversation goes: ""Hi I need a price on MAS90 and 5 or 6 modules"" Me: $15 - $20k ""You're not even close to the other people's prices"" Me: I know - that's usually the way ""Ok - thanks"" I have very low tolerance for high risk and low payback customers like this.

This company is easy 1.5 hour one way trip. I'm sure the whole ""come show me a demo"" would be next on the agenda. So you're easily a minimum 3 hours into the process before you throw on another three hours for chasing the guy around and submitting a proposal (including education on what you're recommending which he'll use to whittle down other bids) only to have the ""your price is too high"".

The business just sucks :(

It's times like this when I think it would be best to build any software licensing costs into our fixed consulting fees.

I'm increasingly of the belief that we would be better off letting Sage sell the software (including ALL pre-sales) and we deliver the consulting. If companies want to buy the software at a deep discount - let Sage sell it to them and retain the liability when the company can't get it working. I know that companies buying cheaply through Sage won't likely be candidates for consulting - but enough will that it could be more profitable overall to focus purely on consulting.

@JohnHoyt - are you separating the licensing and consulting now? Once we started fixed pricing, everything (software, services, sales tax, training) went under a single line for the budget.

@BrianRice I thought I had a new idea, but you have confirmed that this works. Thanks. I need to go to the next level.

State of CT has great sales tax rules - different rate for service and product.

Sales tax is so byzantine its ridiculous a company like Avalara gets to get rich solving an artificial problem. For example, NJ, which is generally one of the simpler sales tax states (generally 7 rip off % across the board) if I implement or train on ERP software, that's not taxable. If I pop the hood of your PC and pop in a hard drive or help you with your server, technically that's taxable. For some reason, work that is considered 'professional' isn't usually taxable, but '99%er' work like hardware, plumbing, electrician etc is considered taxable. Oddly, programming (with legalize from the late 1960's) is taxable. So should I tax a client when I'm doing Crystal reports? Is scripting taxable? Have we gone insane?

@JohnHoyt, we've been writing our pricing proposals with a one line price for 5 years now (after the customer chooses one of three options for the project). It definitely works. Tennessee makes the sales tax calculation pretty easy. Everything is taxed at 9.25%. The only exception is for services that are not related to software...a business process review is one example that is not subject to sales tax. What I don't get is why CPAs and attorneys are not required to charge sales tax.

@JohnShaver Who do you think writes the tax laws?? And the sheeple just accept this crap as ok

In California software and maintenance are taxable only if something is physically delivered, such as a DVD, and maintenance is only 50% taxable. Telephone support plans are not taxable. We haven't charged sales tax for at least two years - all software being downloaded. Unfortunately Sage does not have that memo and has not read California code, because they continue to charge sales tax on software and maintenance.

I'm with @JohnShaver. The customer is actually buying the implemented tool, which includes software, config-customization, data migration and training. We do much of our quoting as single line (actually 3 lines, each a different level of functionality). There is no law that says that the invoice has to look like the quote, only that the total $$ equate. It's a different selling process, but not necessarily harder.

I disagree with Wayne's statement about maybe being better if Sage sold the software and we just sold the rest. I think there are situations where that works (sf.com is the best outlier of this), but many where the customer is required to do a lot of minutiae that distracts from what he wants. The ""app for that"" approach will continue to seep into all of our economic experiences, and turnkey solutions of our solutions fit that. I think it is harder to be perceived as the valuable experts if we become largely the ""after purchase"" guys. Everybody has an emotional attachment to buying ""a thing"" and few have an emotional attraction to buying a service (lawyers, anybody?) So, I'd rather pitch the whole deal, focusing on the functionality and the benefit (and ROI), and not bother their pretty little heads about exactly how the magic is created.

...how the magic is created."" I like that @JerryNorman !!

I think it is harder to be perceived as the valuable experts if we become largely the ""after purchase"" guys. "" I believe it is harder to be perceived as the valuable experts if we give all of our knowledge away in pre-sales. That's exactly what most of us are doing now. Prospects aren't dumb - they're playing us. We let them. Wash, lather, rinse repeat.

Wayne, I completely agree. But not all ive away the knowledge in pre-sales. @JohnShaver, has an excellent methodology for his situation. Chuck and I don't go very far down the pre-sales route without some lock-in. This is where Powerpoint and fixed-price agreements with a focus on results combines pretty well. (PPT to illustrate the promised result.) So I don't don't think my point contradicts the idea of pay-for-knowledge at all.

It doesn't sound like @WayneSchulz and @JerryNorman are making opposing points. That being said, to get back to the Wayne's original statement, I wouldn't be opposed to Sage attempting to take the sales process on. Of the rescues (other call them orphans) that we now work with, most do have an attachment. Of course, I may just be taking a narrow view.

My comments relate to my original post which is a guy on my VM saying (paraphrase) ""Hey waaaaaaynnnneee - I got your name from someone I can't remember and I need MAS90 MAS200 -- ummm give me a call -- bye"" And upon call back predictably the first question was ""how much does MAS90 cost"" .... Knowing this prospect was about a 3 hour round trip - and with the initial interaction 100% based on price - I think it's a much better deal to let Sage make these sales and assume the risk when the discount hunting customer finds out that it's not easy as they assumed

...and that's (basically) where our rescue accounts come from: a partner (not Sage) offering a quick, discounted sale without the services required. We pick up the pieces and put Humpty Dumpty together again.

OK. Yeah, I wouldn't touch that prospect with a 10' pole either. My first set of questions is designed to see if they think about things in a reasonable manner. One of the first rules of successful selling is to always be ready and able to get up and walk away. It is a learned art.

Yea, that's another thing. Epicor clients are saving THOUSANDS in sales tax as epicor purposely only allows the software to be downloaded electronically, while many other vendors insist on mailing a DVD costing the customer thousands in sales tax.

We have a nice phrase here for that. ""We fix $5 hair cuts

Personally, I'd hate to take on a customer after Sage sells the software and promises the world. Many of the ""wow"" demos with Custom Office are smoke & mirrors, using shadow UTD's instead of original tables and scripts that only work in a controlled demo.

It's not so bad. Welcome to the world of Epicor where if you believe them, the software will make you a Grande Mocha Latte in the morning. You now get to blame them as the bad guy and take no responsiblity for bugs in the software, or how well the software fits their business since somebody else sold it. You are also not expected and tell them up front, you won't be eating any costs relating to bugs since you didn't profit from the original sale

Oh,. and any of that bullcrap time you spend with Sage dealing with admin & technical issues is all billable now. In the end you might actually make more money this way

I tell the orphans straight out that what someone else told them would work is not my problem. I didn't sell the deal and I'm not the unpaid warranty department.