If 20 percent of small and medium-sized businesses have CRM software, but only 5 percent of those have purchased accounting packages from Best Software, what’s the possibility that Best can make inroads with a combination of its CRM and accounting products?
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That’s Best’s challenge as it revs up its channel activities to increase the number of customers buying both kinds of products. In particular, it thinks that a channel-friendly approach will win new clients for SalesLogix, its CRM package. Last spring, Best dropped the direct sales efforts for SalesLogix, switching to a complete channel focus, and changed its margin tiers.
Could this strengthened focus on the channel have anything to do with the competition from other front-office products such as Microsoft CRM?
“We have partners who sell both, and once their customers look at both products, we are confident that they will see ours has more features and is easier to use,” says David Butler, executive vice president in charge of customer and channel operations for Best’s Mid-Market Division. To accomplish this, Butler notes, “We’ve thrown all our weight behind the channel.”
Best says that the efforts are spurring interest for accounting software VARs to sell SalesLogix. In June, SalesLogix had its strongest recruitment month ever. Nearly 50 MAS 90/200/500 resellers attending its Insights partnership conference expressed an interest in CRM, and about 20 have already signed up to sell.
SalesLogix was introduced in 1996 by Pat Sullivan, previously president of Contact Software International, which developed the Act contact management package. Along the way, SalesLogix was renamed Interact Commerce, and acquired Act, then owned by Symantec. Sullivan’s company was itself purchased two years later by Best’s British parent, the Sage Group. In its last reported year, fiscal 2000, the company had $107.7 million in revenue, but had been losing money. SalesLogix now operates as the Best CRM Division.
Priced at $495 to $995 per seat, SalesLogix comprises sales, marketing, and support components. Within sales, it automates key aspects of the selling cycle, facilitates team collaboration, and lets management make informed decisions based on accurate visibility into the pipeline. Within the marketing component, it targets the most profitable prospects, tracks all aspects of campaigns in one place, and analyzes campaign return on investment.
An upward migration path is critical to the SalesLogix success story. About 10 percent of SalesLogix users were Act customers first. Those efforts are helped along by 500 Act consultants worldwide, about 15 percent of whom are certified for SalesLogix as well. The new Best Migration Center in Atlanta is likely to increase that percentage too.
Hiking the Margins
Best sees better pricing as a key to success, so it is awarding resellers bigger margins than ever. Channel manager David Bean says, “Higher margins allow business partners to be more competitive in the marketplace and to grow their business more rapidly.”
Under the new framework, margin levels range from 35 percent for Entry-level partners, who buy up to $24,999 annually, to Board-level VARs who get 50 percent margin for purchases of more than $400,000 a year. (See chart on page 59 for additional margins.) The new structure replaced a flat rate of 40 percent. Currently, most partners fall into the 42-to-47 percent range.
To join the Business Partner program, applicants pay $2,500 and must pass two technical certification classes that cost about $1,600 each, in addition to taking a free online “Selling SalesLogix” training class. Resellers receive a year of technical and sales support, and access to three online support sites: PartnersOnline for business, sales, and marketing information; SupportOnline for technical support; and the Developers Network.
Those who don’t want to resell SalesLogix may join the new Referral Program at no charge to qualify for a referral fee that is 10 percent of the suggested list price of Best products. Best qualifies all leads provided by referrers and matches them with a local VAR.
Best expects about 80 percent of VARs will participate in the referral program, with 20 percent eventually joining as resellers.
But the two products do have different requirements. SalesLogix “is very different from the back office,” says Butler. “CRM VARs need to understand how sales, marketing, and support people work in order to meet the CRM needs of an organization.” SalesLogix resellers must also understand integration with legacy database systems, lead capture, customized screens based on vertical industry, and the type of information an organization needs to gather.
Best strongly encourages partnering when it comes to SalesLogix implementations, and both Spinnaker, based in Irvine, Calif., and Blytheco, in nearby Laguna Hills, have chosen that route.
Spinnaker, which gets 95 percent of its revenue from SalesLogix, has been a reseller since 1997, and a Top 10 reseller for the past two years. Blytheco, on the other hand, is a top reseller for the Best MAS accounting line.
Although Blytheco has salespeople and engineers who are trained in SalesLogix, president Stephen Blythe says, “CRM is not a primary focus for us. It’s secondary, and that’s where our exclusive relationship with Spinnaker comes in. We have people on staff who can identify issues within SalesLogix and answer customer questions when on-site, but if any [installation] work needs to be done, we call in Spinnaker.”
Spinnaker CEO Mitchell Cannady agrees. “There is a lot of knowledge involved, and implementing accounting software is very different from implementing CRM,” says Cannady. “By partnering, we can stay in the same [product] family, yet this allows us to focus on the front office while going out to the customer as a fortified front.”
In a recent effort, the team worked with Chapin Medical, a Corona, Calif.-based company that sells pharmaceuticals. Chapin had already purchased SalesLogix and MAS 90 from other resellers, but now needed some customization and integration work to build a central repository of information to give it a view of past, present, and future customer activity.
While Cannady provided additional customization and training on the SalesLogix side, Blythe upgraded the company from MAS 90 to MAS 200. Together, the companies implemented Best’s DynaLink, which lets information flow between the two systems.
The partnership is paying off on a regular basis, notes Blythe. “By partnering, we get at least 10 new prospective clients per month. [This arrangement] allows me to specialize in my area of expertise, while providing our customers with the best of both worlds,” he says.
Carly Lombardo is Associate Editor of Accounting Technology and can be reached at firstname.lastname@example.org.