AccuFund tries to keep its customers close. And it wants its resellers to do the same. When the company first started selling its nonprofit and government accounting software, it chose to use an indirect model in all regions except for New England, where the company is based.
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“Customers like when someone can drop in on them relatively easily,” says President Peter Stam.
With only about 30 members currently taking part in the AccuVAR Partner Program, there’s plenty of regions for resellers to sign up, including St. Louis, Chicago, New York, Georgia and the Carolinas.
“I could add another 20 to 30 resellers without feeling we’re oversaturated or pushing out our current resellers,” Stam says.
Lead generation is typically determined by region, as well as vertical niche. But because the company didn’t want to compete with the channel, “New England” no longer included Connecticut in Stam’s mind because that is where one of its resellers is based.
When Jim Clarkson, principal of Rockland, Mass.-based New England Systems and Solutions, first contacted AccuFund about a reselling opportunity, the company declined. Six months later, he received a call from AccuFund informing him the vendor was dropping its direct sales and expressing interest in having him join the program.
Close proximity to AccuFund is tremendously important to Clarkson, whose office is less than a 45-minute drive from the vendor.
“As issues crop up, I can literally hope in the car and say, ‘I have this issue, let’s work it through.’ I don’t have to do everything over the phone,” Clarkson says.
His relationship with nearby resellers also is friendly.
“If I get a lead in Connecticut, I’m going to send it to the reseller in Connecticut. That’s how I play the game,” Clarkson says.
While he and others agree lead generation by AccuFund could always be better, Stam says his staff generates about 62 percent, the resellers 38, and he’d like that to become 50-50.
Marketing assistance is one of the areas channel members express extreme satisfaction, particularly through providing them with telemarketing scripts and qualified lists of prospects to call, many of which fall into micro-niches within the verticals. AccuFund also writes case studies on niches, such as Indian tribes, so resellers can use those stories to show it makes sense to purchase the software.
Margins are also something current resellers seem content with, though they are changing slightly.
Average implementation costs break down to $15,000 in software, $20,000 in consulting fees and $3,750 in maintenance and enhancements for a five-user system, according to Stam.
As with many vendors, AccuFund’s program works on three tiers—Silver, Gold and Platinum—based on sales volume. Silver members selling up to $14,999 receive a 20 percent margin; Gold members selling $15,000 to $29,999 receive a 35 percent margin; and Platinum members selling above $30,000 receive a 45 percent margin.
There is also an opportunity for all three levels to receive an additional 5 percent bonus. Previously, that bonus was based on excellent customer service, which was determined by client surveys and support calls. Starting this spring, it changed to be based on marketing efforts, including joint efforts with the vendor. Stam says that all of his resellers were making the mark in customer service but he wanted them to concentrate more on marketing moving forward.
He’d also like more of them to pledge loyalty to AccuFund, which is why the company also introduced the Committed to AccuFund program this spring.
Channel members who are part of this program focus their Web site completely around AccuFund and its products are the only ones they actively sell, although they can continue to support exiting clients and collect consulting dollars from them, Stam says.
Their reward is a 40 percent margin from selling a single system.
“In looking at performance, we found that folks that committed to AccuFund did better than ones who weren’t,” Stam says, adding that he is not surprised by the discovery. “People who try to sell a lot of products tend to be generalists and don’t do as well.”
While that is not the case for everyone—Clarkson was the most recent volume leader — some other resellers are taking Stam’s advice seriously.
Larraine Wiklendt of Melbourne, Fla.-based Waypoints, provided consulting work and training for nonprofit organizations and sheriffs’ offices for three decades, primarily on Kintera FundWare and Sage’s MIP products.
She added AccuFund to her roster when her clients started asking her about switching products because of complexities with those systems or because of problems with servers crashing during upgrades, which caused Wiklendt to have to rebuild their databases.
She has about 20 AccuFund customers and another roughly dozen she is hoping she can get to switch. She also changed her Web site to focus on AccuFund on the center of the homepage, though other products are mentioned elsewhere on the site.
“Right now, we’re trying to get away from anything that isn’t AccuFund,” Wiklendt says.
Clarkson actually came to AccuFund after another vendor did the opposite of AccuFund and went 100 percent direct.
New England Systems began in 2000 with Kintera’s FundWare product to help nonprofits and municipalities better control their finances and identify additional revenue. Clarkson took on other products, including Blackbaud, but that vendor dropped its resellers, making Clarkson cautious about putting all his eggs in one vendor’s basket.
That’s what triggered him to call AccuFund initially and to start a relationship with the company in mid-2006. Since then, he’s sold 12 systems and finds the applications to be well-suited for nonprofits that are starting to grow and need something both scalable and intuitive.
“For the A/P clerk who’s responsible for putting invoices in the system and cutting checks, it needs to be straight forward. At the managerial level, it needs to provide tools that provide in-depth reports to help them achieve their [goals],” Clarkson says. “Lots of products can provide that level of reporting but tend to be very complicated on the importation of information.”
Clarkson’s clients have budgets ranging from $3 million to $20 million, demonstrating the scalability. They can start off with a basic chart of accounts with check-writing and as they run into additional allocation requirements that demand layers of internal approvals or need to see reports on a program basis or departmental basis, they can add the modules necessary to do so, such as Grants Management and Allocation Management.
He also appreciates the easy transition from QuickBooks or Peachtree, applications which he says do not do a good job tracking funds with various restrictions attached to them.
“They’re running dozens of reports to accomplish the same thing they could in AccuFund with one report,” he says. Jumping from those systems to a Blackbaud or Kintera could be “substantial,” in terms of difficulty and expense, he says.
“It requires a different level of knowledge to operate the software,” Clarkson says. “It’s like taking someone who drives a Hugo and putting them in a Lamborghini. It goes fast, but they don’t know how to control it.”
Maintaining control of the wheel is one of requirements resellers must meet themselves, in terms of ongoing training. They pay $2,000 to join the program, which includes attendance to a two-part certification program — a five-day basic course that covers installation and training in each of the core modules plus accounts receivable and purchasing, and a four-day advanced training course encompassing payroll, human resources, allocation management and SQL training for Sybase ASA. They must also attend two training conferences per year for $250 per person to receive product and module updates.
For those looking to capitalize on the software-as-a-service model, AccuFund introduced AF Hosted last summer, which Clarkson and Wiklendt see as a way of attracting smaller organizations that don’t have enough cash to lay out for a license fee. The money is spread out over time and the margin is lower—about 65 percent of the on-premise margins—because of costs the vendor incurs and the fact that AccuFund is doing the upgrades itself, according to Stam, but it’s money they might not have seen otherwise.
“I look at the hosted solution as that annuity I don’t have right now,” Clarkson says. “We still get services [fees], but we get the license over time. Over five years, it’s probably more profitable.”
Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at email@example.com.
HQ: Needham, MA
Key Products: AccuFund, AF Hosted
Web site: www.accufund.com
Phone: (877) 872 2228