CCH spent nearly a century selling direct only. But two years ago, the vendor turned things around with a 100 percent indirect model for its sales tax application suite - CorpSystem Sales Tax Solutions.The vendor wanted to form relationships with top-tier Microsoft and Sage channel members who traditionally focus primarily on accounting systems.
"The synergy comes from the fact that every sales tax solution sold must be integrated with a company's accounting software, ERP or e-commerce system, and companies were making their sales tax solution buying decision when they purchased their accounting software," said national strategic alliance manager Michael Silmont. "Building relationships with [these] business partners was an excellent strategy to increase sales."
CCH hired Silmont at the end of 2005 and charged him with launching the CCH Preferred Partner Program in March 2006. That month, CCH attended Microsoft's Convergence conference and signed up its first five members of the Microsoft President's Club - a distinction that goes to the highest sales achievers.
From the beginning, CCH had some competition to face. Avalara, a Web-based sales and use tax vendor, already had embedded itself into Microsoft Dynamics GP and NAV, and was pitching its product to resellers.
"Avalara had a leg up at the start [with its sales tax calculator]," Silmont said. But CCH provided both on-premise and Web-based Software-as-a-Service products, which Silmont believes benefited his company. "The trend is toward SaaS, but about 65 percent of customers are more comfortable having it in house," he said.
The other advantage that Silmont believes CCH had was that from the start it got into all four Microsoft Dynamics ERP products - AX, GP, NAV and SL - and four Sage ERP products - Sage MAS 90/200/500 and Accpac.
CCH offers a suite of products - both on-premise and Web-based - with varying levels of complexity and prices. At the very basic level is CorpSystem Sales Tax Load Utility, which allows customers to upload CCH-researched rates into their ERP system and set up detailed sales tax schedules for their customers. More detailed products include CorpSystem Sales Tax Office, which digs into jurisdiction boundary information and complex calculation rules. CorpSystem Sales Tax Returns Online automatically populates sales and use tax forms, schedules and worksheets with information from the ERP system, then lets the customer review, edit, print and e-file the returns.
"A small company doing business in five states can just use a tax table with CCH rates. They can get in for as low as $3,000," Silmont said. Then they can add levels of sophistication as their business grows.
One year after launching the program, CCH had agreements in place with roughly 80 top partners and today has about 175, with the ratio roughly two-to-one Microsoft-to-Sage VARs.
"We recognize the 80/20 rule. We want to get 80 percent of the top 20 partners," Silmont said. "Rather than spreading ourselves out to every Microsoft certified person, we'd rather provide our partners the focused attention they deserve. The focus seems to be working as our channel growth year over year is one of the fastest sectors within CCH."
REQUIREMENTS AND BENEFITS
VARs wishing to join the program pay a one-time $250 fee that includes administrative expenses, data storage, unlimited tech support, 1.5 hours of Web-based training for up to 15 employees, a copy of the product, marketing materials, flash demos and lead referrals.
Resellers receive 20 percent margins on first-year subscription fees and continue to receive recurring revenue every year. Those with year-to-date sales totals of more than $60,000 receive 25 percent margins on first-year subscription fees.
Top-performing partners are eligible to receive joint marketing funds, jointly branded collateral and invitations to CCH's annual user conference.
There are no quotas to stay in the program.
CCH's nine-person direct sales team is assigned to a named partner, instead of a territory, to provide pre-sales assistance, the bulk of which boils down to talking the talk of sales tax in particular micro-verticals, ranging from retail to telecoms to restaurants, all of which have specific products that must adhere to specific sales tax rules, which sometimes vary from state to state. For example, books are taxable, but the Bible is not taxable in the Bible Belt and some other areas.
"I don't think there's any VAR that wants to know that level of tax," Silmont said. "We don't expect to have our VARs be sales tax experts. We're much more involved in pre-sales than a typical third-party product would be - that's what partners really love. It's like having an extended tax department for a lot of these companies."
ATTRACTING INTEREST
One of those resellers is Clark Haley, president of BCS ProSoft, a large multi-office Sage MAS 200/500 and Abra VAR that is part of Sage's President's Circle and Million Dollar Club. BCS ProSoft has been in the ERP software business for 25 years, most of that time exclusively with Sage. "They help us talk through the issues with the customer and help get the business closed, and we partner on the back end," Haley said.
BCS ProSoft held a few informational Webinars, which it marketed and signed clients up for and had CCH provide the sessions for the VAR.
BCS ProSoft joined CCH's partner program about a year ago and has signed roughly a dozen customers since, but Haley expects that number to climb when sales tax regulations get stricter.
"Most people won't charge sales tax in other states, but states are going to come down on them. It's going to be a much bigger deal the first time one of my customers get audited," Haley said. "The ones who have embraced it and already purchased it are doing enough business outside their own state that they have a worry about it."
