Software vendor partner veteran Terry Petrzelka, now a valued advisor and consultant to vendors and resellers discusses the top concerns for accounting technology consultants in this monthly Q&A series.
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This month, Terry looks at where smaller consulting firms fit into a rapidly changing publisher/partner world, where their future lies, as well as how firms of all sizes may better use social media.
There are some channel partners that have remained/opted to be comparatively small. How do they maintain and what are the advantages?
Peterzelka: I believe that, for some publishers, the days of the smaller partner are numbered. That is, unless they focus on cloud solutions, their proprietary IP and/or niche industry solutions to take to the market.
The smaller partner has to drive their niche via the cloud by being a local expert. The smaller partner also has to drive their niche with some IP that they have developed that is key for a segment of market, and the smaller partner has to drive their industry niche knowledge to take that to the industry strength they possess. If a smaller partner does not do this, they will not make it unless they have a very large installed base to keep their professional practice at a level that they can comfortably make a living and not really care what the publisher’s partner programs are or how they affect their business.
In the end, most small partners have come to the realization that their business will have little value other than its installed base when they decide to sell their business with the exception of some incremental value for their IP.
Are the days of the small partner truly numbered? Why or why not?
Petrzelka: I covered some of this in my previous comments, however I do have some additional thoughts on the matter.
For some publishers, today’s necessary technologies require too many skills and knowledge [certifications] for a small firm to handle by themselves and still stay qualified to be a partner in the publisher channel. This is where programs such as Microsoft’s Master VAR Program and a similar program authorized by SAP come into the picture for the smaller partner. These publisher partner programs will indeed allow a smaller partner to stay in business, but the smaller firm needs to understand that fitting into a model like this comes with its inherent positives and negatives.
Each partner needs to research these kinds of programs to see if they can live with them. If they cannot live with the framework of these programs, then the days of smaller partners carrying complex solutions will indeed be numbered…with one exception. That exception is if the smaller partner has found a way to become a tactical/strategic asset to a larger national firm or global systems integrator that exists in all publisher channels.
Another possibility is that a smaller firm can pick up a SaaS solution [i.e. Salesforce, NetSuite, Intacct, Acumatica, etc.] and wrap a service around this and focus on being the distinctive solution partner in a local area for that SaaS solution. There will always be opportunities for a local, qualified, quality shop and/or independent firm to serve local businesses looking for this kind of firm, especially when it comes to ERP.
Another way to look at this might be that, with cloud products today, a partner no longer needs to be a technology expert. The partner can just focus on the ERP application or even building add-ons for it. In fact, the small partner does not need an office as everything can be done remotely. What’s more is the partner can outsource development and marketing, while one person can focus on sales and one or two consultants can focus on delivery and support. This scenario is doable, however, this type of partner needs to be aware that SaaS publishers are also being more selective of the partners who make up their partner channel.
Another variant comes with this line of thinking. Many clients want a local person who is part of the community to support systems at a reasonable price. These smaller partners are survivors and can survive very tough times as they have little to no overhead and can cut costs quickly.
If one takes a step back today and observe what is happening around them, vendors give the one to five-person shops little to no support and they are all over the place. Additionally, there are thousands of one to five-person accounting firm. These business have found a way to survive. How?? They found a niche and even when they are getting ZERO software margin they have found a way to survive and stay a viable business. These businesses have a business model that is referred to by most publishers as the dreaded ‘lifestyle partner’ since all they are driven by is making a decent livelihood and a means to cover some business related personal expense. The most important factor is that they want to control their destiny, instead of being controlled by the publisher. Again, as I mentioned earlier the small partner has come to the realization that their businesses have no value to anyone but them. Some may also just value their existing customer base and recurring maintenance revenue and they are ok with that as long as they have control.
How should partners be utilizing social media/what best practices have you seen?
Petrzelka: The partners that are doing the best at utilizing social media are partners that are putting together a comprehensive social strategy as a part of their all-up marketing plan. They’re taking the time to understand their buyers and are spending a lot of their time understanding where their buyers are spending time online, what influences them, and they are speaking to them in those channels.
The best practices that I’ve seen are firms that are using tools like Oktopost and Hubspot to automate a lot of their marketing promotions.
As an example, a partner that is selling retail software and the partner sees a post in the retail group the partner belongs to on LinkedIn. There’s a white paper that addresses the biggest business challenges, the partner reads it; and if it’s impactful, the partner is going to remember that business as a source for someone who understands the retail industry problems and how to solve them.
Another best practice is the use of tools like Hubspot’s Social Inbox, which allows the partner to monitor and gauge the social activities of their prospects. So not only are you seeing how they’re interacting with the partner’s site in Hubspot, the partner is seeing all of their prospects’ activities on the social channels. That gives the partner very valuable information from a marketing and selling perspective.
A real world example I’ve heard of as a best practice is a company that sells member management software to nonprofits. They very successfully used tools like Oktopost and Hubspot to promote their marketing assets such as eBooks and white papers. They made their materials easy to share, promoted them very thoughtfully, and automated to a great degree, the sharing and posting of promotional items to channels like LinkedIn, Twitter and Google+. Then they were able to track their prospects using Hubspot tools. That’s a case where someone is using all the social tools at their disposal in a meaningful way.
Got a question or concern Terry can address? Send it to email@example.com for our next column.