This morning I was reading a post by Seth Fineberg on WebCPA. He apparently picked up on the press release issued by Accession Technology promising that they will be offering a 0% financing option and free consultation services to all companies interested in upgrading or converting to Sage Software’s MAS 90 and MAS 200 4.4, the latest version of MAS 90 and MAS 200.

This post from WebCPA elicited some excellent discussion on the Sage LinkedIN group about reducing software implementation and support Total Cost of Ownership (TCO).

The only problem is that a lower service fee (or discounted software) – isn’t the same thing as a lower TCO (total cost of ownership). Not by a long shot.

The fatal flaw in labeling Accession’s offer as a reduced TCO is that it disregards that there are typically two components to Total Cost of Ownership.

1. Total cost of acquisition (what Accession and similar offers seek to reduce)
2. Total cost of operation – or ongoing operating costs.

Simply discounting the initial acquisition cost produces a “feel good” immediate sense of saving money – or reduced cost of acquisition.

What happens if the software being sold is the wrong choice for the company? What happens if the company failed to consider growth when selecting their system and within two years they’re forced to change software to another package at greater cost and incur yet another round of costs.

Indeed the web site for Accession displays a simple order form that promises to return a quote after a prospective customer enters in a few key pieces of information – the most important being “how soon do you want to implement” and “what is your budget”.

If the sales process is flawed – as it most certainly would be if Accession’s methodology is to allow web visitors to self-diagnose their software needs – then the Total Cost of Ownership might skyrocket in the second phase (cost of operation or ongoing costs).

If the wrong software package is selected because the user was focused on the level of discount available or the number of free hours bundled with the initial sale then the much longer term operating cost of ownership could be enormous.

Another trend that we’re hearing about but have been unable to confirm is the use by some consultants of off-shore labor at significantly  (80% cheaper) rate reductions.

If the rumor mill is to believed -  MAS 90 end users are being offered upgrade consulting services for about $28 per hour by some big name consulting firms who allegedly in turn supply the labor from overseas.

Does a heavily discounted consulting rate produce a lower TCO?

Perhaps initially – however the risks of problems are greater than the savings masked by a lower rate.

For example – will the $28 an hour consultant think to tell you about  your software options or will they plow ahead like a robot on a $28 / hour mission?

What if part of the news a (more expensive) consultant might share involved projects for which drastic future changes were happening such as module upgrades or even discontinuation. And if that news caused you to avoid a major software project instead of plowing ahead.

TCO would skyrocket. In the instance of a cheaper rate the company’s purchasing nothing but — well, a cheaper rate.

Cheaper does not usually translate into a long term lower Total Cost of Ownership – especially if what was done cheaply has to be redone.

Image: Flickr

Change doesn’t come easy to the group.

The problem is that the demographic of clients is changing – even when the VAR community struggles to keep old outdated practices in play.

One huge change that I’ve observed is in the area of pricing.

Ed Kless of Sage was an early proponent. Many times I’ve thought he was totally crazy with his fixed pricing talk.

Ed’s not crazy. He has just traveled to where the ball will be.

The VAR community needs to be there  – or someone else will catch the ball.

Here’s a great example. In the past when a software upgrade was available VARS (myself included)  worked  all sorts of complex hourly calculations and quote the client on the number of hours  it maybe would take to install the upgrade.

I said maybe because after delivering the quote, we’d tack on  warnings and disclaimers that when the hours were more than the quote (usually underbid ) we’d render an additional invoice — on an hourly ongoing basis. An open ended engagement – once the VAR started the work it’s quite possible the client would be expected to pay far above the original (usually underbid) quote.

Anyone like open ended quotes? When your furnace breaks is it ok for a plumber to come in and spend two days in your basement and expect you to pay him or her $100 an hour plus the cost of the furnace?

Of course not. Why? Because the plumber is a professional and is expected to give you a price to solve the problem.

But that’s what VARS do –  asking clients for an open checkbook. Shouldn’t VARS know how much effort it will take to solve a client problem?

Clients don’t want open checkbook quotes any longer.

I know this because I just met with a prospect whose complaint was that their last VAR expected to be paid hourly – even when the VAR screwed up and  badly mis-quoted and mis-managed the job. The client was presented with an additional bill for what they felt was shoddy work by their now ex- VAR.

Now this prospective client will only agree to fixed cost project work.

This is the fourth former client that I’ve seen -  of the same exact VAR. All four former clients are now current clients of our firm.

Clients don’t issue open purchase orders (aka – bill us whatever time it takes – even if that extra time is due to your incompetence in quoting or carrying out the service) to  any of their other vendors. Heck – they probably never wanted to buy that way – but that was the only option available.

This year we’re permanently changing the way that we price everything.

We’ll start with upgrades and gradually work our way to all services. Clients won’t have to worry about cost over-runs unless they’ve asked specifically for additional services.

I’m talking about fixed fee pricing to solve problems – not underbidding (hourly pricing)

I’m not talking about under-bidding. In fact most all of our fixed fee projects fully cover items like initial meeting, quote development, followup assistance. We’re being paid for all of that work — items which under the old method of billing by the hour often “fell through the cracks”.

Fixed fee pricing – at least for us – is about 20% higher than hourly.

Fixed fee pricing is also hard. It requires up-front work on the part of the consultant to develop a proposal and scope document. It’s much easier to just throw an hourly rate and let the client take on the risk.

Problem is that clients are only interested in a solution. They expect a solution. Heck, if it were easy they’d do it themselves.

VARS across the country are slashing hourly rates and writing off time  to win business in a shrinking pool of prospective clients because it’s easier than spending the time up front to properly outline a quotation describing the services to be offered. Period.

Will we lose money on some? Perhaps… ok probably on a few…but over time those that we lose on will be compensated by those we are on budget with.

That doesn’t mean we’ll provide the client with an open consulting engagement. The original quote will provide a full description of the scope as well as a clear indication that if the requested services veer outside of those quoted that we’ll allow them to submit an (optional) additional service request.

This is how I want to pay for professional services. Don’t you insist on a known price before agreeing to a project? Then why do so many VARS think it’s still ok to charge an hourly fee for upgrade projects?

This is the year you should be creating an upgrade document describing exactly the services to be offered – as well as the set price. Clients expect that you’ll quote them this way. That’s where the ball is. Now travel to it – or risk dropping the ball and losing the game.

Image via: Snagging baseballs

The abrupt, if not totally unexpected, news of SAP AG’s (SAPG.DE) chief executive Leo Apotheke’s departure brings all sorts of Monday morning quarterbacking opportunities.

SAP’s troubles are not unique. Most ERP software companies are struggling to get their mojo back after enjoying an unprecedented run of ever increasing annual new license sales.

InfoWorld has essentially the same observation with a post  that predicts SAP’s future depends on how they treat their customers. Read it here.

But SAP is only one software company – and pretty much all software companies are suffering from this lack of customer benefit focus – having instead turned to treating the customer as a portable ATM machine that dispenses yearly maintenance fees.

Software VARS aren’t blameless either. Most hold tightly to their ancient model of overpriced canned training, installation and upgrade services  - all mechanical procedures with relatively small value add.

The past 10 years were filled with customers looking for the next great ERP software. Companies routinely reviewed their options – and when they perceived a better accounting solution was available they switched.

So what happened?

In my view the slowing (shutdown?) of the much cherished ERP “replacement cycle” is at the root of the  ERP software vendor malaise.

In the past “the wise men” of nearly all software companies were smug in their prediction that customers “would be back”.

The conventional wisdom was that companies grew weary of their ERP software and sought something better about every 5 years (pick your own number here but it seems like 5 years or so was typically bantered about).

The problem?  ERP software didn’t get  better – only more expensive, more complex.

At least in the eyes of the customer. The only people who matter.

Software companies assumed that ERP buyers would, like robots on autopilot,  keep replacing ERP software every 5 years. This despite  ERP Software offerings remaining largely unchanged from the 1990s.

The fatal assumption?  Assuming that  buyers (customers) were morons.

Turns out the customers weren’t that dumb after all. The first sign is that almost all ERP software companies are struggling to report new license sales growth.

The real morons became the software executives who completely failed to observe that buyers weren’t stupid.  Without improved software ERP replacement cycles would quickly grind to a halt.  Most importantly, real improvements needed to be more than ill-fitting bolt on software which is increasingly more expensive to implement, support and upgrade.

Software buyers — the customers — have had their fill of open ended ERP engagements where each upgrade is potentially more painful than the last.

The gravy train stopped. Customers became wiser and smartly discovered that the grass was not perpetually greener on the other side of the fence.

In the 1990s conventional wisdom said most customers switched ERP systems between 2 and 3 times. Suddenly those customers learned after the 3rd ERP replacement that there  was no “promised land” waiting around the corner with that next (more expensive than the last)  $50,000 ERP replacement system.

So they stopped changing software. Instead they make due with what they have.

ERP software sales slump? It’s really this simple.

San Mateo, California-based NetSuite reported a quarterly net loss of $6.5 million, or 10 cents per share, compared with a year-earlier loss of $4.5 million, or 7 cents.

Revenue at NetSuite rose 4 percent to $43 million which largely met analyst expectations.

Some interesting items from the call.

• Average revenue per customer is $38,000 – this is up 10%. Lots of talk on the call about moving upstream to bigger customers and away from those smaller ($10,000 and under) deals that tend to churn.
• Net licenses flat – they lost as many as they gained. The claim is that those who were lost were replaced by better (higher revenue) customers.  Lots of talk about how cloud computing is going to slay on-premise computing. And maybe it will. But these earnings don’t show it.  Their customer license growth (flat) is nearly the same as Sage’s recent NA report. Flat customer license growth.
• Netsuite’s vertical specialization is wholesale distribution with services coming up fast bolstered by their Open Air acquisition. Lots and lots of talk about verticalization on the call with very little discussion of which verticals they’d be targeting. Open Air claimed 5,600 customers when they were acquired by NetSuite for $28 million in June 2008.
• OneWorld SRP customers estimated at 50. I’m unsure if this is the same OneWorld roll-out where they’d claimed 38 customers in April 2008 representing a growth of only 12 net new licenses in 1.5 years.  OneWorld is NetSuite’s real-time management and consolidation option for larger companies with multi-national operations. (UPDATE: Re-reading the transcript of the earnings call I think Netsuite is saying that their 50 users represent joint users of OneWorld and Open Air and is not the total OneWorld install).
• According to the call Netsuite is paying 30% commission to VARS who sell their solution. The amount is paid on first year and renewal sales. Only  20%  of their billing is generated from the VAR channel – a number which appeared to be flat year over year. Channel conflict (Netsuite by their own admission is 80% direct) and lack of meaningful services revenue has probably held back most VARS from jumping into a Netsuite partnership.

Comments (Full Disclosure: I am a Sage Business Partner and therefore not independent)

Except for the use of Cloud Computing this seemed like a similar call that Sage or Microsoft could have held.

NetSuite is targeting verticals though they didn’t spend much time saying which ones (I believe it’s wholesale distribution, software companies (same vertical as Intacct) and professional services).

The company is definitely moving away from servicing the low end (seemingly those paying $10,000 or under annually) due to churn. They claim that the users they lost were replaced by better (aka higher paying) licenses.

Recurring commissions are 30% (initial sale and renewal) to the channel. Only 20% of billings are through a channel ( a number which I think is unchanged from prior years).

Interestingly if I read the call right – the flagship (aka high end multi-company consolidation in real time) OneWorld offering ended the year with 50 users. Back in April 2008 when it was unveiled ( http://bit.ly/9Ev49E ) they claimed 38. So that’s a growth of 12 in about a 1.5 year time period. I am not 100% certain this is the same OneWorld flavor since on the call they refer to it was OneWorld SRP (services something or other).

UPDATE: I re-read the call and it looks like NetSuite has a product called OneWorld SRP and the 50 users represents those accounts using both OneWorld and Open World. Personally I find these product names too confusing and similar… but then again isn’t that what ERP has evolved to – using smoke and mirrors to sell…

Going forward Netsuite is changing their internal customer account managers so they each manage less customers. Previously it was a 100:1 ratio and Netsuite sees it moving closer to a 40:1. I think this is probably due to increasing complexity of their deals.

Of those buying the suite – 70% implement CRM.

Nothing I read made me think Netsuite was an opportunity for any but the largest VARS with a heavy vertical tilt who would use Netsuite to complement but not be their complete service offering. This is the same thing that has been on display the last two years at the IT Alliance. The NetSuite partners on stage who tell of their experiences are all using NetSuite as a complement to other service offerings (financing, accounting, mergers, venture capital) and not as a traditional VAR model where they sold software/service plus implementation.

I think cloud computing is still coming and as VARS we’ll have to adapt – though adapting probably means developing a model where the services we offer are not the same ones that the publisher will offer (namely support, training, implementation). Unless we can add some “special sauce” there’s little reason to get back on the treadmill of selling a highly commissioned SaaS offering only to see the commission rug be yanked 10 years down the road when growth in the industry slows (as it will).
Earnings call via Seeking Alpha image via: sfgate

This award was being given for the first time this year to two partners who best exemplified the characteristics of being a diverse, vibrant and constant contributor to the Sage business partner community

Here’s my wrap-up of the event – containing the good and bad – but mostly good.

The Sage Presidents Circle brings together what must have been about 200 Sage Partners (and guests) from across the country. They’re awarded for sales achievements as well as customer satisfaction, community service and being high spirited (Sage Spirit Award).

In the past these events have been in more exotic locations such as Hawaii. This year due to the economy (the change was announced last year) Sage decided to make the event more of a business meeting than a vacation. The event was held in Phoenix Arizona at the Arizona Biltmore.

This year’s gathering was informal with about two dozen Sage Executives in attendance to mingle with the group and exchange ideas. The real reason for being together in one place is to honor those receiving awards.

The awards ceremony happened on the second evening of the three day event.

My main concern about this year’s President’s Circle is that an event of 3 days (for which I spent 8 hours traveling each way) was just too short. In essence those coming from the East Coast had one full day to relax – half of which was a Sage meeting – before packing up to head home.

It didn’t help that hotel check in was 4pm and checkout was noon which tended to further compress the free time available on check in and check out days. I’m going to avoid ranting about the Biltmore Hotel  – though if you’re looking for a review detailing why I’d never return – here it is.

Overall the lack of free time wasn’t  a huge issue for me. I was really just around for the ride to see what these things are all about. This Presidents Circle will be my one and only trip as I’ll never be ringing the sales bells at Sage (or any other software vendors).

The three day event was broken down as follows

Day One - Arrival & check-in – evening reception/dinner.

I know next to nobody here. I’m a poor mingler. I dread making small talk at social events like receptions  I quickly spot the folks from DSD Business Systems and Mike Fitzgerald and his wife. They’re our dining partners the remainder of the event.

Day Two – Half day Sage meeting with Michael Gerber – remainder of the day is free for one of three events (we went to Taliesin West -architect Frank Lloyd Wright’s winter home base) – and the evening for awards and a hypnotist.

Day Three – Head home

Meals and evening social activities were all A++.

Sage has a top notch events planning team who did an incredible job keeping this whole event organized.

Event Activities & Observations

Nothing was mentioned about next year’s Presidents Circle  – though several times from the podium budget cutbacks leading to a much condensed 2009 event were mentioned.  Given the way the economy is running -  the next few years  trips might just as well piggyback Insights and let Sage take the winners out to dinner and a movie either at the beginning or end of the conference.

I kept wondering when I was going to get the ceremonial handshake from Sue Swenson – the CEO of Sage North America. She wasn’t there. The unofficial-but-only-when-asked explanation was that she entrusted the leaders of her various divisions to run these events – a fair enough (and believable) explanation and one that I think Sage should have made clear form the podium.

I also was scheduled to “meet” with Sage during the event. I generally duck these types of meetings (as I do with all generic “getting to know you” business meetings)  because they’re typically  feel good – go nowhere time wasters.

Because Sage had flown me out to Arizona – and called me a “Spirit Award Winner -  I felt somewhat obligated to carry the spirit flag for a few days and hold the meeting.

I’d made travel arrangements (later flight) so that I’d be able to do so without looking at my watch.

By the time I was seated “on deck” (around 11:15) to meet with Sage there was also another business “partner” waiting.

So I had a dual meeting with the other “partner” and Sage. Rather the other partner had a meeting and I sat and listened to the same old material/complaints re-hashed. ZZZZZZ. Basically we all checked our watches to see when everyone had to leave to be at the airport.

Re-affirmed my commitment in the future to duck these cattle call “Dear whats-your-name I want to meet you personally and learn about you – pick from one of my 100 open slots” meetings with Sage. Did I mention that for the past 20 years I’ve found them to be a complete and utter waste of time? I simply won’t go to any more of them. Hopefully Sage isn’t puzzled by why it’s sometimes hard to get the smarter partners to meet with them.

The best part of the trip was having dinner with Doug Deane, Mike Fitzgerald, Kayley Bell, Giselle Ferguson and guests.

These folks are who I consider the true “spirit” of Sage. If software vendors want to reach the best consultants  THESE are the respected thought leaders they should focus on.

Doug and Mike and Kayley were all there to pick up awards for sales and community achievements. Doug’s firm is DSD Business Systems (Disclosure: We are Premier Partner members and no independent with respect to DSD Business Systems – though that didn’t stop me from photographing Doug doing 30 minutes of  napkin folding during the keynote).

Mike Fitzgerald (http://www.thefitzgroup.com) is a perennial modest winner of Sage awards for MAS90, MAS200 and MAS 500. He’s also one of the first people I call when I need a second opinion or advice on just about anything related to consulting.

I  enjoyed meeting Peter Wolf of Azamba who was the other Sage Spirit Award winner. He was in a breakout session with me for the Gerber keynote and seems very on the ball. I believe his specialty to be Sagecrm. http://www.azamba.com/. Here’s a picture below of Peter, Tom Miller and Me.

I learned that there’s probably no big motivational speaker at Insights this year and that Sage is going to take more of an approach that they want Business Partners to re-connect with Sage — so watch for keynotes from  Sage people that we duck daily as well as plus a wrap-up session with open Q&A with Jodi Uecker-Rust ( I specifically asked if Sue Swenson would be doing the QA and was told no – but who knows whether that may change by the time the event rolls).

As with all Sage events the agenda and content can change up to the day of the event so you’ll have to wait to see what eventually occurs.

I also heard many people complain about the new tier structure  (my thoughts from last year about why I think Tier needs to go) which dictates how much more money resellers make (or don’t make) depending upon new business sales volume. Based on feedback it seems those complaining fell more into the “don’t make” category. The big issue is that the tier changes hacked away (and often completely removed) the commission paid on maintenance renewals.

If there was a lull in conversation during the breakout session the topic of tier usually came up. It’s one of those items that doesn’t come onto most VARS radar until it affects them (aka – Not In My Backyard syndrome) — then they are radically opposed to it and can talk about nothing else.

Overall a good event though I think Sage missed an opportunity to re-connect to their top partners from the podium. Instead of giving any type of indication about the year ahead they pretty much addressed the group as if everything was great and full steam ahead. I believe that this is sometimes referred to as “whistling past the graveyard”.

Michael Gerber And The E-Myth

Michael Gerber, author of the popular E-Myth series of books (here’s a very good condensed version of his E-Myth material) , spoke to the group for about two hours. The talk was broken up into a one hour general keynote where Michael spoke about the vital importance of having a system to do things which enable businesses to be unique and survive almost any downturn.

His opening comment of “the only reason to start a business is to sell it” threw quite a few in the audience for a loop and provoked discussion about the concept of whether that was truly the only reason to start a business.

Since as VARS most of us are stuck with lookalike businesses we can’t sell – because we have no systems for doing what we do – in hindsight it seems logical that nearly everyone in attendance appeared to disagree with Michael Gerber’s speech (which was all about having a system to build a unique company). To believe otherwise would be to admit that the last 20 years of “seat of the pants” business building was all wrong – and nobody wants to do that. Easier to kill the messenger.

The second half of the keynote saw  attendees break into small groups of 6-8 people. I’m not sure how other tables fared but the room that I was in had two groups  engaged in lively conversations. After the keynote I remarked to Sage that this keynote provoked some of the best discussion that I’d ever seen at Sage. This was also the first group breakout session where Sage participated as equal contributors instead of leading the conversation – which worked extremely well and reminded me of the IT Alliance meetings which are run similarly with vendors, consultants and software company representatives participating equally.

To Gerber’s defense, he began his talk with a story about how as a child he took saxophone lessons from a strict teacher who accepted no student unwilling  to dedicate all their resources to learning.  This teacher even went so far as to tell Michael’s parents not to bother to call complaining because whatever Michael said the teacher made him do was probably true. I can’t say that the group wasn’t tipped that the Gerber presentation was going to break the mold of prior conference motivational speakers.

Ultimately I think I was one of the few believers in the crowd. Major props to Sage for bringing in a non-conventional speaker like Michael Gerber.

My favorite moment  during the Gerber keynote after Sage spent a minute or two saying how 2009 sucked (my paraphrase) but that 2010 was looking up  (anyone ever hear that before – for the last 5 years that seems to be all I’ve heard everywhere). To Gerber’s downfall he immediately launched into a proclamation of what I was thinking – nope the economy is probably not getting better and haven’t people been predicting that the next year will “be stronger” forever? I didn’t get a chance to look  I’m sure Sage was less than pleased.

Don’t expect to ever hear Gerber’s name at Sage again – and it’s too bad because he delivered the most thought provoking content that I’ve ever seen in 20 years at Sage events.

Overall Evaluation

I go to events such as this not to shake hands and kiss ass with executives hoping to earn future favor. Rather I watch and listen to what Sage says – and does. And to what partners say and do – and try to make sense of it. My opinion is by no means the only one – or even correct. Use my thoughts along with your own to form your own conclusions.

I  tried to bring the flavor of what actually happens at the Presidents Circle to those who might not get a chance to attend. Anyone can come back and write glowing love letters to an organization who has just flown them (and a guest) for a three day vacation. My belief is that most people don’t want to read summaries that regurgitate only positive while leaving out analytical thoughts (whether positive or negative).

While I was at the awards conference Sage announced the hiring of Robert Deshaies, a former VP who helped developed the partner strategy for Microsoft and also worked on their SaaS strategies as well as managing field operations for MS Dynamics.

These hirings are in addition to Tom Miller, a 20 year veteran of Great Plains and then Microsoft who is on board running the Sage Channel. If there was ever any doubt about Sage’s commitment to the channel I think the hiring of experienced channel professionals like Jodi Uecker-Rust (President Sage Business Solutions), Tom Miller, Robert Deshaies (and any that I’ve missed unintentionally) puts those doubts to rest.

While meeting with Tom Miller the question of what new partner programs might be unveiled at Insights 2010 came up. I believe Sage has already unveiled some great programs – starting with Ed Kless and Rob Johnson’s series of FREE consulting and sales classes hosted throughout the country starting in Feburary (login to Sage Partner University to take a look and register). Sage’s continued support of educational classes for their channel (classes that don’t focus strictly on moving boxes of software) is a huge partner program that they should be commended for continuing to offer.

Sue Swenson’s absence from Presidents Circle, while on the surface provoked questions, ultimately was a vote of confidence in the Sage Management Team that she’s put in place to run the different divisions. I walked away from Sage Presidents Circle pretty optimistic about all that’s happening with Sage – not based upon what they said during the event – but based on what I observed.

Link: Flickr set of my Sage Presidents Circle 2009 photos

Sage ERP X3 was acquired by Sage in 2005. Prior to branding as Sage ERP X3 it was known as Adonix. They claim 2,700+ users — probably mostly overseas (As I’m in Glastonbury CT that would be non – USA customers – though I believe there are a several in the USA) and 150 partners. The US launch of V6 is scheduled for Q2 2010.

The overall theme of the launch today was that Sage ERP X3 is easy, simple, fast to implement, users like it.  Sage indicates that in competitive selling situations they  win about 1/3 of the time ( I’m unsure if that means globally or only in a region — it was hard to tell from responses because I was remotely connected and couldn’t see which Sage person answered).

Sage ERP X3 is one of two ERP accounting products  Sage has designated as a global offering. That means it’s intended to be used in all regions where Sage operates. The other ERP is Sage Accpac.

According to Sage they sell Sage ERP X3 50% direct and 50% through VARS. Sage further said that as of now they have no rules of engagement (????) for when to sell direct and when to sell through a VAR. This seemed really odd for me and a recipe for conflict.

DISCLOSURE: I am a Sage Business Partner at Schulz Consulting LLC. Since 1986 I’ve specialized in Sage MAS90 and MAS200 accounting software.  While I am not a Sage employee, I do derive most of my income from consulting on Sage MAS 90/200. Therefore I’m not independent in my views of Sage or their competitors. Though I believe this summary is a fair portrayal of what was discussed (sprinkled with my personal thoughts) I recommend you form your own conclusions based on your own research. What follows are my raw notes and observations of the Sage ERP X3 launch event and follow-up press conference. I welcome you to use these observations together with (but not in place of) your own good judgment and research.

Himanshu Palsule, Executive VP, Product Strategy/Marketing, Sage Business Solutions, followed up to clarify that he sees sales of ERP X3 as channel driven in the USA. He thinks that initially Sage will have to be involved in the North American sales process  if only to make sure the implementation goes well (Note: This sounds a lot like how Sage MAS500 started too).

According to Himanshu’s talk Sage ERP X3 is filling a space at Sage for customers requiring globalization with muli-company processes. This includes the need to be multi-lingual, international currency support, tax law needs, etc.

There are some new technologies built into (or around) Sage ERP X3. One of them is the SAFE X3 (Sage Application Framework for the Enterprise) platform can support a variety of databases and operating systems enabling customers to move to Sage easily and without massive investment as they will not need to switch all of their supporting systems

I asked during the Q&A whether there are other Sage products  sold direct (aside from the low end stuff) and was not able to get an answer. (I believe that qualifies as a no.)  Another hint that Sage doesn’t do a lot of direct selling on their larger products is the lack of any type of policy as to who sells the deal (direct vs VAR) — or at least if they have a policy they aren’t sharing it (and a few people asked about it).

The product will run on Oracle or Microsoft SQL and both companies had managers that appeared on stage to thank Sage for their partnership and give a little more background on their products. There’s no planned support for open sourced databases like MySQL (Sage says this could be added in the future but would have to be based on customer demand).

Himanshu Palsule addressed the question of when to sell Sage Accpac VS Sage ERP X3 (the two global accounting offerings) with a somewhat general reply. He said that the more complex deals are Sage ERP X3 candidates while the other smaller deals are Sage Accpac.

Sage does not see a demand for Sage ERP X3 in the cloud as of today. Some business partners are doing cloud hosting (I’m assuming meaning hosting it on a server and providing some type of remote access). It doesn’t seem like Sage ERP X3 is designed to be a true SaaS where you’d have multiple different customers logging into one code based product.

Curiously Sage declines to share any goals for sales or market share. I’m sure they have them.  On this webcast they declined to name any. The closest they got was when one of the Sage people mentioned they seem to win 1/3 of deals.

I asked Sage whether they’d be globally adopting Sage ERP X3 internally since I’d just sat through nearly two hours of discussion about how fast and easy the implementation was. Sage ducked the question saying “I don’t think that was on the announcement agenda today”….  and promptly ended the press conference while inviting journalists downstairs for drinks. I’ll take that as a no answer.

I asked Sage what their target market was as defined by a customer’s  # of employees. They gave a somewhat vague-ish answer at first of 20 to 20,000 but seemed to finally narrow it down to a range of 100 to 2,000 employees. It’s worth reviewing figures from Sage’s own 2009 annual report that shows the size of their current customer base (as listed below).

Only 17% of current customers are 25-500 employees. My take-away is that based on their own figures this (100 to 2,000 employees) market is not one that Sage knows exceptionally well — though I’m sure they’d like to play here.

Upper mid-market: 3% of our customer base – < 5,000 employees
Lower mid-market: 17% of our customer base – 500
Entry-level: 80% of our customer base – 25

They announced integration with Netvibes who is a desktop information delivery service specializing in creating custom web based desktops where you can add widgets to display snippets of information. Sage Enterprise Webtop  is a widget capable of taking data from Sage ERP X3 and pulling it onto the Netvibes desktop.

Nothing said about remote access via platforms like iPhone, Android or BlackBerry.

Sage will be (or has) developing an international team for consistent marketing and support of Sage ERP X3.

Two channel partners were mentioned at the outset (though I know there are more). Blytheco was one. The other was Datel (sp?). A representative from Logica (a global consulting firm) was brought on stage to explain their reasons for choosing Sage ERP X3 as a product to represent. Among other reasons Logica seemed eager to take on smaller clients as well as happy that Sage ERP X3 is going to be sold at least partly through a channel. UPDATE: Bob Scott (http://www.bobscottsinsights.com) notes this link which displays the current North American Sage ERP X3 Partners .

There was a very limited demo – all of it centered around the Netvibes widget capabilities.

Link: Sage ERP X3

With that in mind I have 10 predictions for 2010. Because I work primarily with Sage MAS 90 and MAS 200 accounting software you’ll find that most of the predictions have to do with Sage or MAS90/200.

My predictions are based only on my gut hunches and careful observation at public seminars – in other words I don’t have any inside confidential information.

Score a win for any of these predictions if they’re announced in 2010. Most of the changes that I predict will be multi-year efforts meaning that I don’t expect them to be both announced and completed in 2010.

The year 2010 will introduce some changes for everyone in the software industry. The old prediction of ERP buying cycles where users changed accounting software every 5 (or pick a number) years have been proven wrong.

Instead what we have is an installed base play. Software companies everywhere are earning well over half their revenues from recurring annual maintenance paid by existing customers.

Expect annual maintenance to continue to be a big component of revenues. Going forward however there are several ways that ERP publishers will change to meet their own growth expectations as well as to serve customers better.

Here are my top 10 predictions of changes we’ll see beginning in 2010:

1. Get ready to love EES (Sage Extended Enterprise Edition). This software package of MAS 90 / 200 + Fixed Assets (FAS) + SageCRM is off to to a nice start. Clients like it because the cost is very low for what they receive. Consultants like it because clients like it.

If you’re a consultant be prepared to sell only EES beginning with what I anticipate will be an announcement in 2010.  I look for Sage to at least announce plans that MAS 90 / 200 EES is their “go forward” brand.

The other flavors of MAS90 and MAS200 will stay around until a reasonable transition period is reached.

At various sessions held by Sage management around the country they’ve been vocal about simplifying pricing. What could be simpler than the one price model of Sage MAS 90 and MAS 200 EES which bundles the most important Sage modules with Fixed Assets (FAS) and ERP (SageCRM)?

This means as a consultant you should get comfortable with your new annual authorization fee which, unless Sage makes a mid-year change in 2010, may be about 5 times what you pay now for  Basic Partnercare. Happy New Year.

Probability: 90%

2. Party’s over for small remote offices. Thinking of merging with a bigger  partner? Until now these mergers and acquisitions have been handled pretty informally. Remote offices have been on nearly equal footing with Sage so far as tier computations go.

Sure, you need a legalese merger document, but once you iron out the paperwork for the most part it’s smooth sailing. The remote office tier structure is treated the same as the main office.

Sound too good to be true? It probably will be after 2010.

Watch for the rules to be tweaked so that unless a remote office is  staffed with sales personnel (or other more stringent pipeline reporting requirements) that reduced margins will be in effect.

This may not happen in 2010 – thus my rating of 50% probability -  but I predict it will happen eventually. The coming year will begin laying the foundation of how remote offices might be treated more separately than equally.

Probability: 50%

3. Tier gets goosed – again. The time period between March and the annual reseller conference in May  is typically bad news season. The majority of information that might be perceived as negative is released in plenty of time for tempers to settle before annual conference time  in May.

Last year it was a double whammy of reorganization (May 5, 2009)  and tier restructuring taking effect.

This year we’ll see at least a single whammy of  tier modifications.

It doesn’t take a genius to figure that maintenance commission rates are the most obvious candidate to hit the chopping block. I’d love to fantasize that there will be some type of magic loophole and that “good partners” will be exempt from tier slashing – but don’t we all think we’re good partners?

Instead I predict we see another 2-5% margin decline on maintenance commissions – partly offset by an increase in margin on new deals.

Let’s hope that along with simpler product pricing Santa  leaves a tier schedule weighing in at under 7 pages under the tree this year.

Probability: 33%

4. Jodi Uecker-Rust takes the reins. When Jodi Uecker-Rust was announced as “Interim” lead of Sage Business Division in February 2009 it didn’t take a genius to predict that she’d soon be running the division but not as an “Interim”.  Jodi worked for years as Doug Burgum’s right hand person at Great Plains before retiring shortly after the Microsoft purchase of Great Plains.

It made no sense that Jodi Uecker-Rust would come out of retirement to be named an “Interim” leader of anything. We were right on when we predicted that 2009 would see Jodie Uecker-Rust move up the ranks quickly.

Sure enough on May 6, 2009 she was named President Sage Business Solutions.

Look for Jodi’s control to expand significantly in 2010. While the exact title that she may take is a bit unclear I predict that 2010 will be the year that Jodi Uecker-Rust steps out from behind the curtain and takes a much more public decision making role in the Business Solutions area.

Probability: 75%

5. News (rumors) of MAS90’s death are  greatly exaggerated. Every year there’s rumors and innuendo about products reaching the end of their lives. In 2009 the popular whisper rumor was that MAS90/MAS200 had reached the end of life in favor of Accpac. Prior years had Businessworks on the chopping block.

It would be shocking to see a company,  who admits that well over half of annual recurring revenues comes from maintenance, get rid of the MAS90 maintenance cash cow. It’s not going to happen in 2010  unless the right offer comes along and MAS90 is sold – which in this environment seems  unlikely.

Probability: 99%

6. Act! gets a second wind. Let’s hope that in 2010 the Act! CRM program which is wildly popular with clients gets a second wind. An official iPhone version is overdue and I hope we see it in 2010.

Probability: 20%

7. The online knowledgebase stays the same. The long suffering poor Sage Online Knowledgebase has struggled for years under a tired user interface that has perpetually been promised an upgrade as soon as Sage’s internal IT upgrade project is done.

I’m predicting  the Sage Knowledgebase gets coal in its stocking again this year – so what you see is what you’ll have for 2010.

Probability: 75%

8. Sage makes a full court press for premium (aka phone) support - Within their 2009  earnings report Sage’s parent company said growth in premium support sales was a goal for Phase 2 of  Sage North America’s business plan (presumably under way now).

While Sage  say’s there will be growth in “offers” and not sales, it seems logical that they’d like more than a few premium plans to be sold.

The most likely way  this will occur is by bundling phone support (at least limited calls) into software pricing. Until now premium phone support was  optional. With Sage working diligently on simplifying pricing it’s probable  2010 will see many products offering a bundled premium phone plan with initial purchase.

From Sage’s 2009 Earnings Report:

Phase 1 of the changes to our North American business has been successfully completed with the new management team in place and an appropriate reduction of the cost base. Operational improvements planned in Phase 2 are underway including reinvigoration of the channel, growth in premium support offers and several product launches. We are making good progress in these areas and have seen increases in customer satisfaction scores across our product lines.

Items like this don’t go into a corporate earnings report footnote unless they’re virtually certain to happen.

Probability: 99%

9. SQL Version of MAS 200 is delayed into 2011. Call me a cynic but anytime I hear how easy and quick something’s going to come to market little flashing red lights spin in my head. By “delayed” I’m talking about the shipping version and not a preview release.

Sage has a full plate with their MAS 90/200 4.4 release.  Expect an all-hands-on-deck release late in the first quarter for 4.4 leaving slim resources to devote to MAS 200 SQL.

Probability: 60%

10. Business Objects Interface (BOI)  becomes the most respected new feature of MAS 90 4.4 that hardly anyone uses. People rave about the capabilities of BOI. Know anyone other than  hardcore techies who use it? Me neither. I don’t expect that to change in 2010.

Every release starting with 4.0 has brought gushing about how great BOI is and how it will grow hair on your head, make you more attractive to the opposite sex and help build strong bones and healthy minds.

Most people are still waiting to master Business Objects Interface.

Better documentation (free) and training (free) are both needed and should be a new component of premium maintenance.

Probability: 95%

Crystal Ball Is Too Hazy To Call These

There are numerous other issues that will be on the radar in 2010 but where my crystal ball is too hazy to make any prediction:

• Extended Solutions being turned over to developers and the end user reactions
• Purchase of third party products for incorporation to MAS90 / MAS 200
• Adoption rate for the latest MAS90/MAS200 upgrade
• Announcement of an FRX replacement
• Announcement of a SaaS (software as a service) ERP product
• X3 product plans

DISCLAIMER: Most of these predictions are wrong. They’re my personal opinions and do not reflect the opinion of anyone else (that’s why they’re called personally opinions silly).

The best example that I’ve seen of someone using social media to promote their business is Scott Jordan.

He’s the owner of Scottevest which make jackets for geeks with lots of pockets to hold their cell phones and other gear.

http://www.scottevest.com

Take a look at Scott’s Facebook page to get an idea of the type and quantity of things that he posts that help him generate business (he claims much of his new sales increases have been driven by Twitter/Facebook).

Some things that I think are noteworthy.

One of the most important things you’ll notice about Scott Jordan is that the doesn’t only use one Social Media site. He uses nearly all of them.

If one site’s not working after a while he just stops. But he’s always providing a regular stream of content on the sites that work for him. Invariably I’m sure that Scott measures effectiveness by tracking incoming traffic to his site via a free tool like Google Analytics.

Scott doesn’t just broadcast information about his business all day long. It’s not one big sales pitch (though that’s a big part of it). He mixes in personal and interesting topics.

- He doesn’t use only one method – it’s not just Facebook or Twitter or YouTube — he uses them all. And most of them converge on his Facebook page as well as broadcasting out on Twitter. Click the image below to see all the places that Scott’s active.

- He talks about a wide variety of things – it’s not just business. How boring would it be if all he did was post pictures of jackets and asked you to buy. Here’s an interesting item from Scott Jordan’s Posterous site

- He has a mix of daily posts that may show him skiing or walking his dogs – as well as posting about new products that he’s thinking of introducing.

The mix of content that Scott produces keeps you following his updates. Along the way that invariably also keeps you updated on his products. In most cases Scott never has to ask you to buy anything – the thought will probgably naturally occur from exposure to his products in a non-sales type of format.

If you (or your company) have been wondering where Social Media should fit into your marketing mix — take a look at how Scott Jordan does it. Friend him on Facebook. Watch how he markets. Do the same thing (or modify the ideas) for your business. I think the concepts will be helpful — take the best ones and adapt them to your business.

Read more about Scott Jordan’s Social Media in this article from MSN dated 1/4/2010 .

http://www.facebook.com/scottevest

So then how did I manage to squeak out an invitation to  President’s Circle with Sage January 2010?

According to Paul Johnson of Sage I was selected from a pool of 140 partners who’d been nominated for the inaugural Sage Spirit Award.

This new category  was created by Sage to honor business partners that embody the five Sage principles of agility, innovation, simplicity, trust, and integrity. In other words it’s meant to recognize people who don’t sell millions in software but have other characteristics that Sage has determined justify them being honored.

I wrote about the Sage Inaugural Spirit Award on my main site so I won’t get into it in detail here. Suffice it to say that I was completely surprised and honored to receive the call from Paul Johnson.

Now on to Arizona  (assuming they accepted my reservation) where I’ll see if I can use my scary social media skills to  become the first Sage Business Partner ejected for live blogging about what goes on at President’s Circle. Full press release after the jump.

Dec 22, 2009 12:09 ET

Sage Announces 2009 Sage Spirit Business Partner Awards

IRVINE, CA–(Marketwire – December 22, 2009) - Sage North America announced today the Sage Spirit business partner awards for 2009, recognizing Sage Business Solutions (SBS) partners who are diverse, vibrant and strong contributors to the Sage partner community. The recipients of the inaugural Sage Spirit awards are Azamba Consulting Group, Chicago, IL and Schulz Consulting, LLC, Glastonbury, CT.

“At Sage, we believe that a successful business partnership is developed through embracing the fundamental principles of agility, innovation, simplicity, trust and integrity,” said Jodi Uecker-Rust, president, Sage Business Solutions division. “By recognizing these business partners, Sage is acknowledging the characteristics that we look for in order to build a successful business partner relationship.”

Azamba Consulting Group specializes in the sale, installation and support of SageCRM. Known for generosity in the Sage partner community, Azamba Consulting Group often provides no cost marketing, promotional and consulting services to other Sage business partners to help overall customer service. Responsive and professional, Azamba Consulting Group has the reputation as a company built to work with Sage business partners.

Schultz Consulting, LLC demonstrates that effort and persistence can drive success no matter what size the firm. The company is known for outstanding contributions to customers and to the Sage business partner community. Recognized as a leading voice for Sage MAS through innovative use of social media, Schulz Consulting, LLC embodies the spirit of the Sage principles.

The Sage Spirit award is part of the Sage Partner Advantage Award Series, which honors business partners for a variety of outstanding achievements. Spirit awards have been added to the program to honor business partners that embody the five Sage principles of agility, innovation, simplicity, trust, and integrity. Recipients have demonstrated that they value their relationship with Sage by embracing these principles in order to create a mutually beneficial partnership. Nominations were submitted by Sage business partners and Sage employees with selections being made by a Sage executive committee.

Distinction as a Sage Spirit award recipient includes an invitation to the exclusive President’s Circle. All Sage Partner Advantage Award Series recipients will be honored at an official awards ceremony at the luxurious Biltmore Resort and Spa in Phoenix, Arizona, January 25-27, 2010.

About Sage North America

Sage North America is part of The Sage Group plc, a leading global supplier of business management software and services. Sage North America employs more than 4,000 people and supports nearly 2.9 million small and medium-size business customers. The Sage Group plc, formed in 1981, was floated on the London Stock Exchange in 1989 and now employs 14,500 people and supports 5.8 million customers worldwide. For more information, please visit the Web site at www.sagenorthamerica.com or call 866-308-2378.

© 2009 Sage Software, Inc. All rights reserved. Sage, Sage Software, Sage logos and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc. or its affiliated entities. All other trademarks are the property of their respective owners.

Quick Preview Of What The Sage Presidents Circle Might Look Like This Year As Spirit Award Winners Join The Million Dollar Sellers and Sage Execs

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.