Hi Peter
I confess I've never liked selling software packages alongside advice but
I've been in and out of reselling software (currently out) in a few
countries so thought my experience might be useful (without quoting the
products to save embarrassment <g>). Four lessons:
Lesson 1: It's got to work ALL the time:
Our customers (3,500 of them in the South Island) are a pretty go ahead
bunch and our whole ethos is about building great customer relationships.
As a result they expect heaps of value for money from us. So if we sell
something it has to work perfectly. Hmmm! I was shocked to find when I
arrived here 6 years ago that one product our services team had installed in
heaps of sites simply kept breaking down and, worse, that the product
supplier *charged our customers (or us) for the analysis time to fix bugs*.
As the reseller we became the jam in the increasingly skinny sandwich. To me
that's iniquitous. If the stuff doesn't work (really doesn't work - not an
'OCU') then the originator should pay for both the programming time AND the
analysis time to fix it, not the customer (or reseller). After a lot of
soul searching the services team moved themselves and their customers to a
better product.
Lesson 2: It's got to be flexible enough to give real value to customers as
individuals but be dead simple to maintain
One size doesn't fit all. But I was once called in to manage a team who
built custom solutions with spare consulting resources who then disappeared
back to consulting jobs (not here). You guessed it. Maintenance was a
nightmare but the true costs were hidden as long as the sales volumes
continued to grow - sales funded maintenance. When we did some projections
we were either going to have to charge an arm and a leg and get dedicated
resources for maintenance (increasing costs and defeating the original
idea), or become more standardised and start pyramid selling (impossible
with custom solutions and shrink wrapped sales was not our market), or lose
a bundle as sales slowed down. We sold the business.
Lesson 3: It can't be too cheap
It costs quite a lot (time and $$) to keep people up to speed and have
enough people trained to give decent coverage on each product. In return we
look for products which don't make us a fortune in commissions but which, as
well as lessons 1 and 2, give us an opportunity to offer 'value added
services' so we can grow our business - could be as simple as designing
special reports through to helping restructure a chart of accounts, improve
some business processes, get better information, sort out a coding problem,
empower people - all that good consultancy stuff that advisory firms and
resellers do (or try to do). When a product is too cheap our customers'
perceptions are that it should work out of the box. So the package has to
cost enough (and therefore give enough value) to set an expectation of
sufficient additional services to cover our training and sales costs.
Nowadays implementation costs are about 0.2:1 for small packages to 1:1 (ie
the same again as the cost of the software) for major packages (SAP
implementations were nearly 8:1 originally). So we're interested in up
market solutions which cost more but deliver more, rather than shrink
wrapped stuff with no added value opportunities.
Lesson 4: Relationships are key
We don't just build 'selling' relationships we need 'buying' relationships.
Our customers want us (and the package) to be around for the next 5 years at
least. So any software probably needs to be updated and expanded several
times to stay competitive. Again, our reputation gets hit if we sell stuff
that's not 'future proofed' - that means finding solution providers who look
ahead and have a competitive development plan and enough funding to carry it
through - plus listen to their agents and customers.
Hope these thoughs are of use to anyone looking for an agent. Incidentally,
we don't sell software at all now at KPMG, only inspiration and
perspiration!
Good luck - Sue :)
Sue Stubenvoll, Director, Management Consulting
KPMG, PO Box 274, Christchurch, New Zealand
[EMAIL PROTECTED]
DDI +64 3 363 5781 or 021 535 781
Fax +64 3 363 5766
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