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
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.
As I see it, accountants are terrible sales people anyway (and proud of it!),
so it makes no sense to have them in a reseller program. We’ve seen many
firms take on these reseller programs, even some offered by us through The Sleeter
Group. But the reason they don’t succeed is because when they reach the
end of their client base, sales stop. At that point, the vendors get frustrated
by the lack of sales performance. This becomes a vicious cycle: Vendors start
demanding more “performance,” resellers increase their credibility-compromising
activities, and it all continues to fail because it was the wrong business for
the accountant in the first place. Finally, the vendors sever the ties, thinking
the accountant was just a poor salesperson.
SUCCESSFUL ACCOUNTANTS/CONSULTANTS FOCUS THEIR CLIENT ENGAGEMENTS
IN THE FOLLOWING ORDER:
- Client Needs: Obtain a full understanding of the needs
of each client, with deep analysis done for each situation, rather than just
lumping broad categories or business needs into a group. Never force everything
to be a nail just because you only have a hammer.
- Consultant Match: Scrutinize your own skills, and consider
whether you have what it takes to deliver meaningful benefits to the client.
Sometimes you should simply decline the engagement if it’s outside your
core skill set. Find a colleague that specializes in the client’s area,
and make the referral. This takes discipline, but it is critical to overall
success. You’ll probably find that the more referrals you give, the
more you’ll get.
- Solutions Available: Study the market and always update
your knowledge and understanding of the solutions in the market. Find the
solution(s) that meets each client’s need. Sometimes, it’s not
clear which product is best so help the client evaluate each candidate solution
while remaining independent of any particular vendor. This underscores the
problem you’ll have if you are a sales rep for any particular product.
- Consultant Recommendation: After finishing all of the
steps above, make a recommendation for a particular product that, in your
opinion, is the best match for the client’s needs.
- Client Engagement: If you and the client agree on the
course of action, proceed with an engagement, including purchasing the software,
installing, customizing and configuring.
You may ask why you shouldn’t be paid when you “sell” vendor
products. After all, you have the best view of the client’s needs, and
if you generate a sale for a vendor, then why shouldn’t you get paid for
that service to the vendor? In my opinion, as long as the sale is a result of
going through the steps above in the specified order, then receiving some type
of payment from the vendor is great. It’s like a bonus or a finder’s
fee, and in most cases it’s probably appropriate. But if you ever reverse
the steps above or skip any of them, sooner or later your whole business will
See inside November 2010
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