Wayne recently sat down with Tim Rodman for episode 102 of the AUG Forums Real Talk podcast to discuss the pros and cons of today’s consulting models. Acumatica recently announced an additional option that would allow for a consulting-only authorization instead of the prior reseller/consultant model.
AUG Forums Podcast Sponsors:
- Paya – paya.com – (automated payments for Acumatica)
- DataSelf – dataself.com– (Business Intelligence or Acumatica)
- 247 Digitize – 247digitize.com – (Acumatica accounting service)
Link to full episode of the podcast Episode 102: Wayne Schulz – Acumatica Service Provider Program
Acumatica Introduces A New Services Partner Program
October 10, 2022 – Acumatica Press Release – Acumatica Expands Channel Focus with New Services Partner Program
Services Partners will be considered “industry authorized” after completing two successful implementations of an Acumatica Cloud ERP industry edition, a designation that authenticates their technical knowledge and capabilities when implementing each of Acumatica’s Editions.
What’s So Bad About Reselling?
- Free demos and needs analysis
- Selling subscriptions may be less profitable
- Big time commitment for sales proposals
- Charging for initial consultation work is difficult since customers see it as part of your sales process
Is The VAR Model One Big Pyramid Scheme?
- The level of sales needed to make the same commission on selling a subscription rises frequently
- Two ways the publishers keep resellers on “the treadmill” – either volume requirements go up or commission rate goes down
The Number One Thing Consultants Must Focus On
- Recurring revenue ( that the consultant controls – NOT commissions paid by the publisher )
- Watch the publisher’s underlying business model (ie recurring revenue) as that is usually correct no matter how “crazy” some of the other publisher ideas may be
- Model your pure consulting business the same way that the publishers have evolve their business (it’s all about recurring revenues)
What’s The Advantage of Even Enrolling In A Consultant Only Type Program?
- Ability to open support cases with the publisher
- Access to training & online knowledge
How To Enroll Customers In Your Recurring Revenue Support
- Tell them this is the only way you bill – this works best for new customers
- “But what would it be hourly?” – We don’t have hourly rates (stop talking and if pressed repeat)
Why Should A Customer Want To Work With A Consulting -Only Firm?
- Offering an unlimited support plan removes customer reluctance to call
- Consulting-only firm has incentive to continue the relationship since 100% of revenue is consulting
- Unlimited support agreements can be money makers (so long as you haven’t underpriced)
- (Good) customers are generally ok with re-negotiating fees if circumstances change
What To Exclude in A Support Agreement?
- Training
- It’s ok to price extra services ( ie training class)
- What customers are not ok with are getting a surprise $6,00 bill
The Secret of Support Agreements
- You really do want them to call (just not to excess)
What’s Great About The Consultant-Only Model
- You keep 100% of what you bill
- Recurring revenue
- Not tied into an ever-changing publisher commission model
The Downside of Consulting Only
- If you have the ability to continue to meet the publishers changing commission requirements then you can earn very strong recurring commissions
- Publishers generally don’t provide leads to consulting only firms
Final Thoughts
- Put new customers onto a recurring revenue support plan right away (once they become customers)
- Don’t offer hourly billing
- How you start your relationship with a new customer is likely how it’s going to continue – so give some thought to your business model and have the typical customer questions ready to address.
Above is a summary of the topics discussed. To hear the full podcast (30 minutes) please visit the AUG Forums podcast page here.
