From the December 2010 Issue
For years now, I have been evangelizing the opportunities out there for Value Added Resellers (VARs) in the SMB market. But there is a big difference between a true “VAR” and an accountant/consultant who starts acting as a reseller or sales agent for software solutions. Unfortunately, a few high-profile reseller programs out there don’t seem to be working, and I think I know why. The issues go straight to the heart of how accountants have very different business models than traditional VARs.
As I watch and listen to the frustrations of software vendors throughout the SMB market that are building sales channels that focus on accountants as their rainmakers, I’m not surprised to find that things aren’t working so well. What does surprise me is the naiveté of most vendors when they approach accountants as a channel. Maybe the vendors will learn something by hearing me out on this.
The term VAR means that you add value to the solution you are selling. Usually, that means you’re developing some type of software add-on or customization service that puts the packaged solution to use for your customers. In nearly all cases, true VARs do all of the selling and represent the “solution” as something they have created and/or modified, often with their own trademark or product name. Of course, they also talk about the underlying packaged software as the core of their product, but the key is that they’re customizing, selling, installing, configuring and consulting with the client to create a whole solution.
Contrast that with being a reseller who sells a packaged product, takes on a sales quota and is required to present the company line to generate sales volume, all so you can earn a sales commission. The reseller model may work for IT firms, but accountants are a special breed. Accountants have clients while resellers have prospects and customers. When you have a client, you have a fiduciary responsibility to serve the client’s business, not yourself, and not any vendor.
The fastest way to ruin your hard-earned “most trusted advisor” status is to give vendor sales pitches to your clients, competing with other resellers or even the vendor, and winning or losing based on who can provide the biggest discount.
If you’re in the business of accounting, tax or software consulting, be in that business! When vendors approach you to join their reseller program, run the other way. Otherwise, you’ll be on a slippery slope that will ultimately ruin your business. As an accountant, your goal should be to serve your clients first, last and always. Of course, you want new clients, too, but you won’t get them by joining vendor sales programs, especially not if those programs involve marketing/sales activities that clearly compromise your independence. Successful “sales reps” have to say things like, “Oh, this new version is so great!” and they have to follow it up by listing feature after feature, even when they don’t believe those features matter to a particular client. But since they have a quota, they’re incented to just go along with the vendor’s company line. This is just wrong, and if you do it, sooner or later you’ll wake up to find that you have no more clients, just customers. And you’ll be addicted to finding new customers every day or you can’t get paid. Clients represent ongoing billable work, but customers come and go.
It would be a whole different thing if you were including the cost of packaged software as part of your overall consulting engagement, but then you’d be back to the Value Added Reseller approach, and that approach works great.