On the Prowl for New Customers


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by Richard McCausland

With an installed base that exceeds three hundred customers, you’d think L. Kianoff & Associates is sitting pretty. Not necessarily so. As president Lisa Kianoff explains, “A few years ago, people were just buying up. Today, people are skinnying down, and they’re adding as they go along.”

Based in Birmingham, Ala., this Best Software and Microsoft Great Plains reseller has seen its ratio of new to existing customers swing in recent years from 60/40 in favor of newcomers to 45/55 against. That flip-over concerns Kianoff, since new clients generally mean “a larger [revenue] hit” in required software, implementation services, and support.

Partner Insights

To counter that trend, Kianoff has an inside salesperson on staff who deals primarily with prospects. “As she hears their needs, she’s funneling that information down to our sales and marketing team,” which will arrange a meeting, notes Kianoff. Of a total staff of 19, four are engaged in sales and marketing.

The inside salesperson doesn’t need to be intimately familiar with the nuts-and-bolts of the Best and Great Plains lines, notes Kianoff. “Honestly, the initial phone call has nothing to do with product,” she confides. “It has to do with pain points and what the caller’s business needs are. It’s not about us until we get deeper in.”

Paying close attention to what the prospect is saying has paid off handsomely for Kianoff’s company. It has added approximately 25 new clients in the past year. “That will probably be a good rolling number for us moving ahead,” she predicts.

Her success is no surprise to Taylor Macdonald, Best senior vice president with responsibility for business partners, who notes, “The best leads are not the publisher’s leads, but the reseller’s own.” He estimates only the top 20 percent of Best partners conduct their own marketing activities. These tend to be firms with at least six employees.

Since any reseller’s installed base will inevitably shrink as a result of business failures, mergers and acquisitions, and unsatisfied customers, “Bringing new blood into your customer pool is vital,” comments Michael Bongiovanni, senior sales vice president at Pleasanton, Calif.-based Accpac International. To achieve that, “Resellers really need to have sales and marketing programs, or they’re not going to be successful.”

For a VAR to have a dedicated business development person on staff was “somewhat rare” five years ago, he says. Fortunately, that’s changing. “The bigger VARs have dedicated one or more people to marketing,” points out Bongiovanni.

Going Out to Bring Clients In

"I've had little or no success with raw marketing," says Sheldon Waters, president of DSM Data Systems Marketing, a Toronto-based reseller of BusinessVision software. By that, he means handing over a list of leads to an on-staff telemarketer or outside salesperson with instructions to "Go get 'em, tiger!"
So just about a year ago, Waters began outsourcing his business development needs to a firm specializing in telemarketing. He now provides them with the list of leads, and lets them do all the preliminary qualification work. These may be candidates for BusinessVision accounting software, or for DSM's own InfoTrac customer relationship management package, or both. If a prospect is interested in hearing more, the telemarketing firm sets up an appointment, "and I then send out my best qualified guy," says Waters.
The expectation is that the telemarketer will arrange two or three appointments a week, or roughly eight a month. "Four or five of those are real good prospects, and it's realistic for us to bring home at least two of them," says Waters.
He estimates his outsourcing bill to equal roughly 60 percent of the cost of a full-time, in-house dedicated marketing staffer, "but with three to five times the success rate."

Even with an installed base that exceeds 400 firms, “It’s always important to get new customers, but it’s crucial in this kind of economic climate,” says Alex Solomon, president of New York-based reseller Net@Work.

He explains, “Any customer goes through a life cycle that spans from pain to luxury. In general, we have taken our existing [Accpac and Best] customers through their pain points, and now should be the time for a lot of cross-selling that covers their [functional] luxuries. But in this climate, they’re being very careful about spending for luxuries, so we’re not getting as much business from them.”

Also citing the sputtering economy, Michael Brown, sales and marketing manager at Boise, Idaho-based Cougar Mountain Software, observes, “Speed to market can’t be emphasized enough. The first to respond often will be the one to get the business.” That means a VAR should be sure there’s someone in the office to receive calls from prospects, and to monitor the Web site for incoming queries, and to rapidly pass those leads onto the appropriate salesperson.

Working with CPAs

For Kianoff’s firm, leads come from various sources: the reseller’s Web site, placement with leading search engines, and ads in local business publications. Also, “We’ve got real good relationships with CPAs,” who are invited to monthly Lunch & Learn seminars as part of the overall Kianoff Accounting Partnerships program. A CPA herself, Kianoff has found, “If the CPA gets involved, an implementation goes smoother for the client.”

Then there are all the cooperative (co-op) programs for which the reseller and its two major vendors share expenses. These can include product seminars, telemarketing, and mailings. Although “we live in two worlds” because of the alliances with Best and Microsoft, Kianoff notes that both companies share a commitment to “solution selling,” which emphasizes the need to identify and prioritize the prospect’s operational difficulties, and then clearly lay out possible remedies. Both vendors also are committed to polishing their resellers’ sales and marketing skills through confabs like the Best Marketing Bootcamp and the Microsoft Business Building Conference.

As a result of all its marketing activities, L. Kianoff & Associates has a diverse mix of new clients. “A good number are coming off [Best-owned] Peachtree; that’s an important feeder base for us,” notes Kianoff. Others are moving from obsolete DOS packages, while some are prepared to switch brands (and channel partners) because of new business issues they have to address. Also, “Of late, we’ve got a couple of prospects who are on upper-end platforms like PeopleSoft, who have determined they should move down a notch,” says Kianoff.

There have been a few medical startups as well, including software developers and biotechnology firms. “Those are real growth-oriented companies, who are quickly adding users and modules,” comments Kianoff. Not only are they generating revenue, they’re also bringing “a sense of excitement” because they understand how technology drives business.

“There’s a level of satisfaction and creativity that you only get from new clients,” says Kianoff. “They keep our skills honed.”

Best, for its part, is fully prepared to assist the channel with mailings, telemarketing, seminars, and other marketing activities that are eligible for co-op funds. “The more opportunities we can discover for them, the better,” says Macdonald. At the same time, the vendor expects its VARs to create their own marketing programs. On that score, matters are definitely improving. For example, almost half of Best’s resellers have been through its whole-day Lead Generation Bootcamp to learn how to be more pro-active in ferreting out new business clients.

For resellers to win over new clients, Macdonald recommends that the VAR quickly establish a friendly rapport with the prospect, persuade them of the VAR’s own financial security and longevity, and demonstrate that “you understand their business better than anyone else.” Additionally, in this  economy, the reseller must show how the proposed implementation will help the prospect (1) grow revenue, (2) make more money, and/or (3) reduce operational expenses. That’s critical, according to Macdonald, because “Buyers today are more sophisticated-and more wary.”

Best reseller Blytheco has customer service reps to “keep our name in front” of existing clients, as well as six outside salespeople who are “pounding on doors” following up on leads, says Stephen Blythe, president of the Laguna Hills, Calif.-based firm.

“We get hundreds of leads per month,” he says, the result of “very aggressive” marketing that encompasses mailings, local ads, seminars, trade shows, and Web campaigns. He estimates it takes as many as 150 leads to find 20 or 30 “really defined” prospects. The goal is to win six new customers in the $50,000-and-better range per month.

Blythe is very much a staunch advocate of homegrown marketing. “The publisher’s role is to get out a good quality product and to support it. Finding and closing on new business is our responsibility,” he states. Of course, he hasn’t yet turned away a lead brought to him by Best. “But if I don’t get any, I don’t whine either,” he says.

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