VARs: Understand ‘Strategic Durability,’ Then Revamp Your Business Plan

By: Jim Roddy, VP of Marketing at the RSPA

You remember five-year business plans, right? The leadership team or the president would map out where the company expected to be a half-decade in the future and then a secretary would type up the plan in a neat little (or not-so-little) document. Very rarely did a company construct its plan from a blank sheet of paper. A few tweaks from the prior five-year plan would often suffice.

There was a day when a POS reseller could write a five-year plan and stick to it for the most part. But that’s a next-to-impossible feat in today’s seismic-shifting channel. A vendor acquisition or new cloud something-or-other offering could make your plan obsolete within weeks of you distributing it.

I recently learned a phrase that aptly describes our industry’s situation. In Patrick Lencioni’s The Advantage, “Strategic Durability” determines how often your organization will need to change its fundamental strategy. Lencioni writes, “That will depend largely on two industry traits: the barriers to entry in a given market and the rate of innovation. … When barriers to entry are low and innovation is high, strategic anchors will need to be reviewed and revised much more frequently. Online software applications would fit this one.” Let’s look at POS VARs through that two-trait Strategic Durability lens.

Barriers to Entry: About 10-15 years ago, the barriers of entry to become a POS reseller were very high. In many cases, you had to qualify as an authorized reseller of a name-brand hardware system and then also qualify to resell for a software provider. Territories were protected by the vendors, and those outside the current channel were left scraps to live on. The Strategic Durability of a Micros dealer or NCR reseller was pretty, well, durable. Keep doing what you’re doing, take care of your customers, hold onto your territory, and everything will be okay. Today anyone with rudimentary IT skills and internet access can download POS software onto an iPad, sell it to their buddy’s bar for a monthly fee, and – voila! – they’re a reseller.

Rate of Innovation: I know from working at Business Solutions Magazine in the 2000s that our annual POS editorial calendar didn’t change drastically from year-to-year. Our Tech Trends section highlighted updates to all-in-one POS systems, receipt printers, touchscreens, and cash drawers. The most monumental change I recall was the year our editorial team cut product reviews of pole displays. If I was tasked to map out a 2020 ed cal today, I know much of what was on my list would be outdated (if not obsolete) within 18 months. As one reseller told me recently, “You think you have everything set up, and then six months later – squirrel! – there’s something new you have to pay attention to.”

Today’s POS technology – wait, it’s actually a misnomer and limiting to say “POS” today when leading VARs are providing tech that reaches well beyond the point of sale. Today’s innovative retail technology includes mPOS, cryptocurrency, IoT, pay-at-the-table, self-checkout, online ordering, menu management, digital signage, website management, custom software development, WiFi, cellular failover, and more. You’ve come a long way from pole displays, baby.

And that’s just the IT side of reseller innovation. Retail, hospitality, and grocery VARs are also witnessing changes in business models (as-a-Service/recurring revenue), service offerings (managed services), hiring best practices (recruiting passive candidates), and marketing strategies (advertisements out, content marketing in).

What does that mean to you as a retail IT VAR? Go back to what Lencioni said: When barriers to entry are low and innovation is high, strategic anchors will need to be reviewed and revised much more frequently. If you haven’t revised your strategic plan since Halloween 2018, you’re overdue for a review. I wish that wasn’t the case (I know you’re busy enough already), but our industry today has low barriers to entry and an accelerating rate of innovation.

The good news is you don’t have to go it alone. The RSPA has established a new Business Advisor hotline and is offering VAR members quarterly Strategy Sessions to help you map out your future. We’ll set you up with one of three on-staff channel executives (with a combined 70+ years of industry experience) for a confidential discussion about your business, and we’ll share resources to help you move forward.

Strategy Sessions will be customized for each reseller, but they will be rooted in best practices we’ve learned first-hand from leading POS VARs. For example, I’m one of the advisors and believe there are essentially two paths forward for POS VARs:

  1. Stop selling to micro-merchants and focus on SMB or large/chain merchants. I know that’s easier said than done; it’s difficult to displace an existing provider unless you offer significant cost-savings or extraordinary value.
  2. Run very lean internally (maximize automation; minimize staff size) and sell predominantly to a niche vertical. Obtain leads through trade shows in that market and by word-of-mouth, and sell them a bundle of industry-tailored services. Some micro-merchants in that niche might not want/need everything in the bundle, but they’re more likely to pay for it if you’re also bringing exclusive industry expertise to them.

If you’re interested in learning more about the RSPA’s Business Advisor Hotline or our Strategy Session offering, please reach out to me and I’m happy to get you started on the path to a more prosperous future.  

Jim Roddy is the Vice President of Marketing for the Retail Solutions Providers Association (RSPA). He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim is regularly requested to speak at industry conferences and he is author of Hire Like You Just Beat Cancer. For more information, contact