By: Jim Roddy, VP of Marketing at the RSPA
At the conclusion of the just-published 2021 RSPA POS Channel KPI Study, we provided insight into the opportunities, threats, and challenges retail IT solution providers face today. We laser focused on that topic during a recent RSPA Niche & Startup ISV Community call and learned quite a bit about software developer challenges. I divided the group’s comments into four categories and summarized their thoughts below:
- Our resellers experienced merchant closures and lockdowns, and there was a big decrease in in-store shopping, so it was a challenge for merchants to justify changing POS platforms when they were closed. We had no choice but to focus on partnerships, embrace e-commerce, and build a better personalized experience.
- We accelerated our partner strategy and helped merchants open an online store – to help them sell more, to help them get more repeat business. In one year we went from just 21% of our merchants able to sell online to 48%.
- Our biggest challenge is customer success on a consistent basis. We have a young product and a young channel which contributes to the challenge. We’re determining how we can be more effective training partners.
- Ultimately we want to have QBRs (Quarterly Business Reviews) with our partners to better understand them. We have to help resellers grow their business and understand what it’s going to take for them to embrace a new platform. They have to invest a lot in learning and selling a new platform. We have to show resellers how our product will help them make money faster, but we have to be in learning mode first.
- We simplified our product to make it easier to sell and created a model to make it work in the channel – made a scaled-down version that’s easier to install. Our original product does more than what they needed and expected; we were trying to sell a Ferrari when they needed a Honda. We’re now coaching the resellers and offering them co-marketing tools. We created a program that works and that we can scale. We will extend our footprint by training others, and we have lots of touchpoints to keep that going.
- We’ve played around with pricing during COVID. Our standard is $130-$150/month; merchants want to move to cloud, but three figures a month sounds scary. We built a starter plan and give merchants a simple version of our software that you won’t find offered on our website – it’s only for channel partners. It’s a solution to compete vs. Clover. We’ve seen that about 50% of merchants will advance from that simple version to our full software.
- My challenge is we look at ourselves as a rugby team joining the NFL. A rugby team has a coach and an assistant, not an offensive line coach and a wide receivers coach and a strength/conditioning coach. I need a dedicated recruiting person to grow.
- I need advice for marketing, I need someone to bounce ideas off of, and the RSPA community meetings help. I’m short on time, so I need the contributions I get to be great.
- Being remote is a challenge. We meet two times a week as a core team – we need to have frequent communication and bad news has to travel fast. We’re trying to develop a culture where people feel free to express themselves. Prioritizing what needs to be done is never done; we could spend an entire team meeting on marketing, then we could spend half of the next meeting on support escalation that is rich with process improvement.
- Our business is going well but retail is changing fast. That’s super exciting but challenging for a team of people. I have to navigate my team through choppy waters.
Let’s analyze those answers. First, I love the analogy of an emerging hybrid ISV/VAR viewing themselves as “a rugby team joining the NFL.” Many hybrids are learning that transitioning to a vendor is more complex and time-consuming than it appears from the other side of the table.
I thought simplification was an interesting top-four challenge for ISVs. I’ve been a huge fan of the keep-it-simple-smartypants concept since I read the 2016 business bestseller Simplify. The authors call the practices these ISVs are embracing Proposition-Simplifying: you can create a premium market by simplifying to make your product or service dramatically better and a joy to use. Square, Toast, Clover, and others have pushed retail and restaurant bundles in this direction, and SMB ISVs are adapting to keep their market share – and maybe gain some.
For additional analysis of challenges facing ISV/VAR hybrids and software developers, listen to my recent RSPA Trusted Advisor podcast interview with Josh Wintoniak of ISV Auto-Star and Hunter Allen of VAR Cervion Systems. Wintoniak and Allen are insightful from start-to-finish, of course, but you can jump to the 16:44 mark to hear their erudite hybrid/ISV discussion.