Forepoint, Inc in November 2010 sold their Sage ERP Accpac practice to East Coast super-VAR Net@Work.

 
BCS PROSOFT TO TAKE OVER THE DELTEK VISION PRACTICE OF FOREPOINT, INC.

It’s almost a certainty that these are some financial types either doing due diligence or writing a research paper that they’ll re-sell.

I’ve never found a way to properly charge for “brain picking”. They all want to pay for an hour or two of services — however in the back of my mind I know that the value goes far beyond the hour or two that they offer – yet they almost always disappear at any suggestion beyond them paying you for an hour of your time (which they usually value at the lowest rate that they’ve offered the guy mowing their lawn someone doing this type of work on the side — aka about $25/hr is deemed “fair”)…

Here’s what the request looks like.

Hi Wayne,

I’m in the process of doing some general research on the fixed
accounting software space and, in particular, Sage Software and their
position in this market. I came across your review of fixed
accounting software on The Progressive Accountant web site and thought
you might be able to help me.

I imagine this is not a normal request for your services but I’d like
to get 1-2 hours of consulting time to give me a primer on FAS
software packages, the competitive landscape in this market, trends
and opportunities, and opinions on Sage as a company and a player in
this space. I’m hoping to conduct this overview by phone, ideally
sometime within the next two weeks, with any supporting or reference
materials sent by email.

If this is something you would consider please let me know a time when
we can have a brief call to discuss pricing and other specifics. Feel
free to reply by email or call my cell at xxx-xxx-xxxx. Thank you.

On the surface it looks like an easy way to make a few bucks. Assuming these folks want to pay (which in my experience of dealing with about a half dozen of them – they don’t).

In prior years I’ve replied with a fixed price for consulting research assistance. That either results in (insert sound of crickets chirping) or a reply  for me know to teach them how I came up to the price I proposed to charge since it’s substantially higher than what their lawn guy charges other contacts charge.

Who knows what they’re really looking for. Writing research papers for customers who’ve paid them big bucks, due diligence for acquisitions, reviewing systems for a relative as a favor?

I’m never entirely sold I’ve gotten the full story. In most cases I assume these are disguised pleas to “pick someone’s brain” for free ( and I’m assuming that most people on the other end of the phone line don’t know enough to charge in advance for a “quick call”).

I just know my rate is worth more than their lawn guy and I’m retired from the business of educating analysts on value.

Yesterday’s news of Jodi Uecker-Rust’s departure as the leader of Sage Business Solutions in North America didn’t really come as a total shock.

Surprise? Yes. Shock? No.

Prior to joining Sage in February 2009 Jodi had spent her career first at Great Plains and then led a division at Microsoft (after they acquired Great Plains for $1.1 Billion in 2001) playing a key role in the Navision acquisition.

By my personal observation during her tenure at Sage North America she was all but invisible to most VARS while Paul Johnson, Executive VP, served as the public face of Sage and emceed many events including the Sage Presidents Circle in Phoenix.

When the announcement arrived yesterday that Jodi was leaving for what were described as personal reasons there were several things that stood out to me.

First, the surprise announcement came from two people who either reported to Jodi or were below her on the organizational chart.

The announcement of Jodi Uecker-Rust’s hiring came from Sage North America CEO Sue Swenson. It seems that the departure announcement should have too.  Instead the notice that Jodi was leaving came from two people below her in the organization chart.

When asked-  Sage public relations explained that the two people who made the announcement, Paul Johnson and Tom Miller, were considered to ” have been the principal senior-level communication links”.

Partners in the Sage channel who hadn’t previously followed and known about Great Plains and their outstanding management team likely had no idea who Jodi was. Jodi was never the primary channel communicator at Sage. That’s one possible reason behind her departure.

There were VARS who knew of Jodi from Great Plains. And those who knew her had nothing bad to say. The problem seems to have been that somewhere Jodi’s talents where squandered in an office either in California or Fargo (where I’ve been told she was commuting from).

Back in December 29 2009 I made 10 predictions for Sage. Number 4 on my list was that Jodi would take a greatly expanded and more public role in the channel. That expanded role never occurred – at least  visibly to the channel. And if there were signifiant changes Jodi spearheaded they weren’t noted in any of the departure announcements.

I’m also told that the lengthy Fargo to California commute might have been a key reason for this departure. Perhaps that’s true however at President’s Circle Jodi described how she moved her entire family overseas to quarterback the Navision acquisition –  which doesn’t make me think she’s a person who avoids  travel.

Second, the announcements contained no list of accomplishments during Jodi’s nearly 1.5 year tenure. There was only vague re-assurance that Sage is committed to the partner channel. As most of these types of departure letters go – this one was no different and reads like a generic press release.

The letter that Jodi penned to announce her departure makes vague reference to Sage’s channel commitment and fails to mention the people remaining who will be leading the channel or any reasons to have faith that they’d continue.

Taken together this sudden departure is a big change for a few people:

- Jodi recruited many former Microsoft executives. Tom Miller – the VP of Channel Management was reportedly lured to Sage primarily at the request of Jodi. Since then Sage has hired several former Microsoft executives (Robert Deshaies, Jon Witty).  I’m sure the behind the scenes communication network at Sage is buzzing like crazy.

- Sage Business Partners – The next leader of Sage Business Solutions will provide big hints on where the division is going. If it’s a sales oriented leader (as I believe it will be) expect to see more of full course direct sales effort. If the leader is someone with a strong channel management background then expect a continued commitment to the channel.

- Taylor Macdonald. For those who don’t know Taylor was the head of channels for Sage and one of the energizing forces behind growing Sage’s channel management efforts. When Taylor left in a management shakeup there were many VARS who followed him to his next efforts at Deltek. Now Taylor’s at Intacct managing their reseller channel. If he had trouble getting phone calls returned from Sage VARS before Jodi’s departure –  he’s likely not having that problem now.

Overall I don’t think Jodi’s departure means that Sage will sell around or eliminate their channel. Rather what’s more likely to happen is the channel approach is restructured to focus on large firms (much as Microsoft has done in the last few years) and to more directly service the smaller software customers.

All we can do is wait for the appointment of a new leader for the division. Who do you think that might be? I have a few suggestions/guesses that I’ve set up on Quora where you can weigh in with your ideas as well.

Who will be the next President of Sage Business Solutions?

First thing this morning I skipped over to take a look. Sure enough it seemed to be a relatively new blog cataloging news items in the SaaS industry.

The Internet is ripe with sites that spring up overnight with posts populated by RSS feeds from other blogs (aka SPLOGS or Spam Blogs). In general these SPLOGS seems to exist to try to game the system and earn both ad revenue and perhaps measure search visibility for a particular domain.

At first I suspected that’s what this site was. However after looking for a minute it didn’t seem to be your typical SPLOG. There were links to industry analyst blogs.  The articles seemed relatively current and topical.

The it hit me as I read the bottom of the blog. There was an entire row of posts sponsored by only one SaaS/Cloud publisher. I took a quick look at the Network Solutions Domain Name Lookup. Sure enough the site is hosted on the server of what seems to be the only sponsor.

Based on a quick review it looks like Acumatica (a provider of SaaS ERP solutions) is hosting the blog – at least according to the data provided by a domain lookup done this morning at Network Solutions. A quick Traceroute which shows the Internet path that your browser follows to find the server seems to back this up.

So what’s my point in all this?

First, there’s nothing wrong at all with publishers using blogs to promote their services or their products. However there’s a great potential that a user will be misled into thinking that the blog is an objective source of information – when it really can’t be if it’s backed by a publisher.

If you’re blogging for your own company – take great care to go overboard and disclose any and all bias. This will help form a greater trust with your reader.

What I thought was especially creepy – and prompted me to write —  is this post from the ERPCloudnews site. Notice how they disclaimer indicates that the post is sponsored by Accumatica? That’s good. But why is there a disclaimer “may not reflect the views of ERP Cloud News.” if as I suspect ERPCloudNews is hosted and sponsored by the publisher?

Second, you should have an “About” section that identifies you and provides enough information so the reader can know if the site might have any bias (whether intended or unintended). As a matter of practice whenever I comment about anything related to Sage Software, MAS 90 or MAS 200 (of which I have consultant affiliations as noted on this page) I go out of my way to state that “I am not independent with respect to my comments”. Blogs should make any potential bias clear as well.

From the screenshot below you’ll see the ERPCloudNews affiliation isn’t totally clear. Kudos for disclosing that the authors behind the site are a media firm (fancy name for Public Relations aka Advertising). Not so cool that they fail to disclose the fact that this site appears to sit on an Acumatica server.

What’s the point to all this?

When you blog – fully disclose your bias. If you resell a product you’re not independent. If you derive revenues from a product you’re writing about then you’re not independent – use the “About” section of your blog to make this  lack of independence clear. Better that you point it out than to have your reader figure it out and then disregard everything they find on your website as un-trustworthy.

Be careful when reading blogs online. They’re not all as independent as they may seem. Use the information you find combined with your own research to form conclusions. Just as online reviews of books, software and restaurants can be easily gamed by organized groups of individuals  - so can blogs.

I’m using one site – erpcloudnews.com – as an example. I’m sure there are many more where affiliations aren’t clearly stated on the blog. There’s nothing technically wrong here – unless your reader starts to sense that there could be the potential for bias in the bog. And if that happens all your goodwill and hard work creating your blog could gradually erode.

The email is from a company that serves as a lead gathering source for ERP VARS ( and probably software publishers too ). They’re certainly not the only company offering this service but since I happen to be on their email distribution list I’ll use them as an example.

This lead  they’re offering is a person looking to be better trained for future job opportunities. A noble request – but not exactly the type of lead most VARS would be looking for.

Which started me thinking.  Are  “pay leads” something VARS should be chasing? Maybe there was a time in the past that they worked. Are they still a valid marketing tool?

Services like the one that sent the email work by having end users  submit contact information online – usually doing so in exchange for some type of free white paper or other assistance with finding an ERP solution.

These prospects are then matched with one of several consulting firms who’ve paid to receive the names of companies  looking for  help in their area of expertise.

At least that’s how it’s supposed to work.

Disclaimer: Various regions of the country  have different types of lead results. If, for example, you’re in a remote area with no competition then a lead generation service probably works great because you just might be the only VAR chasing that lead.

However if you are in New York City or San Diego then I bet your experiences will be a lot different.

From what I’ve seen the leads fall into one of these overly broad categories:

1. Consultants looking for free help finding a program for a client (The consultant usually has been paid to conduct a search. You however won’t see a nickle of that. In the unlikely chance you win the bid expect to bill everything through this third party consultant at the same rate you were using in 1986. The consultant invariably doesn’t pay you and second guesses everything despite having zero experience with ERP turns out to be a thorn in your side for the entire engagement),
2. End users who already have a quote and are looking for second, third, fourth and fifth bids. They’ll always say  they’re looking to close very quickly – and they are – just not with you,
3. Dreamers with low budgets that don’t cover the cost of a single on-site visit (Tip: If the budget range provided is $500 to $25,000 guess which number the prospect’s thinking of),
4. People who enjoy filling out online lead request forms and have no authority/budget/motivation to buy. Recognize them when they hang up on you or repeatedly ask “why are you calling?” or “where did you get my name”,
5. A seemingly never ending pool of companies that will “buy immediately if it can do what we need” , the problem being they don’t know what they need and/or their needs are so hopelessly unique and complex that even $100,000 of the world’s best programming won’t solve a problem that they’ve budgeted $2,500 for. These companies are easily identified because they’re still using the same computer they purchased on August 12, 1981 when the IBM PC was released.

VARS  subscribe to these services (I never have). The amount charged varies depending upon the number of leads the VAR wants to receive.

Is there a return on investment for these services? Certainly. Is it worth the hassle and overhead? I guess if you love chasing  the same lead that’s probably been distributed to multiple competitors. I’ve sometimes heard this described as a “race to the bottom line” . The winner’s often the one with the biggest discount.

Anyone like chasing that type of lead?

Based on informal non-scientific discussions with people who’ve bought leads from various sources it seems most do so because of the “I only need one big sale to make it worthwhile”.

Problem is that these big sales seem elusive yet perpetually just within arms reach.  VARS use paid leads as the lazy man’s way to marketing. It’s a “feel good” marketing because the VAR is “at least doing something” with a side order of “I’m doing it because my competitor is”.

My opinion is chasing these leads are poor uses of time, resources and  marketing money. When you close one of these leads they often produce  disloyal and price sensitive customers that never become profitable long term clients.

When the initial sale is heavily discounted the  way to make money is by keeping the client happy and loyal for several years so you’ll have a chance to earn back the initial discount. This is the cell phone carrier model where the phone is given away but the customer agrees to stay for two years so the company can earn back the phone discount.

My experience is that most  (but not all) clients arriving via lead services won’t stay. So you never have a chance to make back in year two through five all that money you discounted in year one. See the problem?

Cattle call lead generation  sucks as a reliable way of producing loyal profitable clients

Everyone’s familiar with Google Adwords.

It’s the simplest form of advertising and you can get started quickly with almost no effort or planning (which is how 98% of VARS do it).

Create a three line ad that displays when a Google search is performed on your select keyword(s). Set a monthly budget and sit back while your competitors and tire kickers Internet searchers click away at your link and are delivered right to your web doorstep.

Right?

The theory of Adwords is great –  for  businesses that sell commodity type goods  based predominantly on  price.

Accounting ERP software is fortunately not one of those types of businesses. Most ERP software must be sold bundled with some consulting, setup and training time as well as an often lengthy initial discovery process to ensure that the expensive software is a good fit for the business.

Google Adwords for ERP Software in my experience is a crap shoot

What I’ve found is that you quickly blow through $200 (or whatever your monthly budget is) with few leads. I’ve always been suspicious about exactly who was clicking my name. Is it mainly competitors?

I’ve never been a  believer that it’s a great idea for me to invest in a service that essentially provides my company name along with (pick a number — 1, 2,3 or more) competitors to those searching the web.

Am I wrong here in believing that I’d then be chasing the weakest form of client?

Essentially I’d be dealing with predominately companies searching based on price. Then when those companies found ME – they would also have a handy list of several of my competitors.

Anyone enjoy completing an RFP (request for proposal)?

That’s what online leads essentially are. The online lead is the Y2K version of an RFP.

And you know what – RPP’s suck because it’s a crap shoot (sound familiar) where you are at a cattle call (familiar?) with several competitors (ding ding – are bells going off yet?).

Notice that I said predominately because I’m sure there are some companies that will find you online that in turn become valued long term clients.

There are also homeless people who walk into the casino, insert their last quarter and walk out a millionaire.

But not many do. And there’s a reason that Casino’s can afford to give you $5 buffet steak dinners and free drinks. Hint: It’s because the house has the advantage EVERY time.

It’s the same theory with online leads.

The customer or the person selling the lead has the advantage EVERY time.

I’m sure there are companies that spend the money on daily lead reports and who win business from those services.

Average out the cost of chasing the duds from the lead sheets and Google ads. Are you making money after factoring in the cost of obtaining the lead. Assuming that leads found this way are less loyal — leaving after a they buy their bundle of discounted software and services — then you probably aren’t making  recurring revenues from them.

Which is why I question the wisdom of buying these leads in the first place.

And it’s not just the examples that I’ve used. There are plenty of other sites that have been around offering similar services.

I sometimes receive email solicitations to buy their lead updates – which are good for a  laugh.

• “Nigerian companies looking for software”
• “Budget range $100 to $20,000″ (Two guesses which number the prospects thinking of)
• “Using Great Plains Dynamics but seeking a General Ledger replacement – not open to switching from GP”
• “Consultant looking for a client” (My all time favorite because 95% of these are pleas for some free consulting help)
• “Company located in XXX where physical geography of the consultant is unimportant” (It’s only unimportant until the consultant tries to sell or bill them for anything – then watch how the story changes!)

I see far too many Sage VARS “investing” in marketing programs that they seem to rely on to do all the work for them (listings, paid links) when in fact there’s no better marketing than keeping clients happy.

In my experience  companies searching the web for accounting software and clicking paid links are the weakest form of customer. They’re invariably looking for cheap price and instant gratification. Of the customers that I’ve found this way – I cannot remember a single one that has stayed with me. I can’t remember a single one that bought on anything other than price.

Thankfully I stopped using paid lead sources years and years ago. I’ve found no substitute for good old fashioned hard work.

What do we use instead?

• A monthly newsletter sent to 2,000+ customers, vars, prospects, CPA firms
• Timely updated information on ERP software and specifically our specialty – MAS90
• Referrals from happy customers
• Prepaid unlimited support that benefits the client by allowing them to know their annual support costs
• Retaining existing customers – if we’re not constantly churning disloyal customers that we’ve acquired from paid sources then we have more time to nurture (and earn fees from) our existing loyal customer base who return year after year after year.
• Internet marketing – but only for those who come to us after having been on our newsletter list or read an online article we wrote

What don’t we use?

Tired sales tactics that over-emphasize price and promotions over consulting.

Are we winning sales awards this way?

Hell No!

Are we more profitable than most? That’s hard to say.

Most of our clients return to us year after year for advice and support on their accounting systems (specifically MAS90). We don’t churn clients at a rate that forces us to take on the more expensive lead generation sources. I suggest that focusing more on client service and retention. might be a good goal for 2010.

Well meaning consultants have this habit of giving advice about things they sometimes know nothing about. If you’re foolish enough to follow it you may end up like they  do – out of business, unemployed or working as an employee.

Here are my five favorite lies  consultants have tried to lay on me over the years

You Must Have a Live Person Answer The Phone

Not only don’t I have a live person answer the phone – nearly 90% of my support is  via email.

That’s right – almost all of my support starts and finishes via email.

Clients don’t care whether they reach me via tin can and string or smoke signals — provided the response is fast and solves their problem. Whoever floated the rumor that you needed a live receptionist must have never called into a consultant’s business where the bored receptionist made it sound as if your call was interrupting their Perez Hilton or TMZ web browing session.

You don’t have to pay a live person to juggle phones and take messages. Hardly anybody does this anymore. I use grasshopper for outsourced PBX and my BlackBerry for incoming email.

And while your outsourcing technology (which I strongly recommend) – take your Microsoft Exchange email system and throw it out the window.

Google Apps for Domains is cheap ($50 per mailbox per year) and provides 25 GB of storage and tight integration with BlackBerry. Point your company’s domain name to Google’s Mail servers and clients are never the wiser. The benefit to you? If the email or phone service breaks – it’s someone else’s problem — not yours! You can stay out consulting with clients where you make ALL of your money – not fixing your internal technology which  costs you money.

Customers Will Only Pay Hourly For Phone Support

We stopped doing hourly phone support about 10 years ago. So much for this piece of advice.

With over 60 clients subscribed to a prepaid phone support plan (we charge $2,800/year) there’s never a fear on the client’s behalf about getting a bill for a quick question. And we don’t  argue over whether a call for support should be billable because it only lasted three minutes.

Does this mean we turn away clients?

Absolutely.

There are anywhere from 6 to 12 suspects that we refuse every month because they don’t see the value of going onto a prepaid phone support plan. Over time I’ve learned that customers who are only interested in a per call fee arrangement are most likely to use your services for one call and then never be heard from again. They just don’t turn into what most of us would call a client.

Don’t sell your services  cheaply. The people who want to pay less than going rate will only draw your attention away from  companies willing to pay an annual fee to be covered under your support plan.

The key to success with phone support? Stick to your guns. Have a plan already written up (here’s mine) so  when you go into a meeting you’re ready for the question. Without a plan to offer you’ll often wind up backing down and entering an hourly support agreement.

Offer More Than One Accounting System

Don’t do “onesies and twosies”.

What I mean by this is if you cannot get reasonably proficient with an accounting system – don’t get involved with trying to sell it to your clients.

Don’t get suckered into installing an industry (aka niche) software program to a client who will be your only user of that system. This is a recipe for disaster. If you only have one client on the system how on earth will you get proficient at it?

Installing only one or two systems per year won’t give you enough experience to be profitable offering (and more importantly supporting) the system. It’s a total waste of resources to make a big profit on an initial software sale only to have to refund the money or offer a hundred free hours to make the software work.

Chase Every  Sale And Win  Sales Awards

The fastest way to lose money and possibly go out of business is to pay any attention to the annual or quarterly sales goals set by the software publisher.

Unless you’re on their payroll it’s not your problem whether the publisher makes their quarterly sales goal or not.

So don’t stock product because you’re a few bucks short of some arbitrary sales goal.

Certainly never push a bad sale just because you need to make that same arbitrary number.

It’s the worlds worst feeling to walk away from a sale.

It’s even worse not being paid — or “eating” time put into a job that cannot be billed or collected.

Stick to your guns and only offer your solutions where they are a good fit. It makes your clients fiercely loyal and develops your  reputation as reliable consultant. Top notch clients seek out the reliable consultants while the company’s who want to pay $20 to $30 for a quick support question will take the first name that appears in their Google search.

Turn Your Cell Phone and BlackBerry Off After Five And On Weekends

I smile deeply and for a long time when I hear a competitor brag about how they turn off their BlackBerry at night and on weekends.

Suckers!

Little do they know that the weekend and after hours is when most decision makers are working.  The people sending you urgent emails are also the people whose hand makes the signature on the checks. I’ve won more multi-year support clients just because I’ve responded to an after hours email or two. This goes down in the all time book of lies that consultants tell.

My BlackBerry gets turned off at 11pm (usually long after I’m in bed) and turns on at 4:30am.

How often do I get calls on the BlackBerry after hours? Maybe twice a month. But for clients just knowing that they can reach you after hours is a major psychological boost that helps them decide to hire you.