In Episode 131 of “The Trusted Advisor,” POS Nation VP of Customer Experience Will Atkinson, BlueStar VP of Marketing Dean Reverman, and RSPA CEO Jim Roddy analyze the 2025 RSPA Retail IT Channel KPI Study. Atkinson, Reverman, and Roddy discuss better-than-expected 2024 revenue numbers, VAR and ISV optimism for 2025, strong profit margins for solution providers, how VARs should counter “MSP Creep,” the long-term future of small resellers, and more.  

To download your copy of the 2025 RSPA Retail IT Channel KPI Study, visit: www.GoRSPA.org/blog-2025-rspa-retail-it-channel-kpi-study/

“The Trusted Advisor,” powered by the Retail Solutions Providers Association (RSPA), is an award-winning content series designed specifically for retail IT VARs and software providers. Our goal is to educate you on the topics of leadership, management, hiring, sales, and other small business best practices. For more insights, visit the RSPA blog at www.GoRSPA.org.

Watch Episode 131 now:

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Full episode transcript via Apple Podcasts:

00:00:01.360 –> 00:00:03.120
Roddy: Hi, Jim Roddy here from the RSPA.

00:00:03.120 –> 00:00:06.520
Roddy: Wanted to chat with you for a minute before we start today’s pod.

00:00:06.520 –> 00:00:18.040
Roddy: First, it’s been about three weeks since our last episode, and that’s because we’ve been busy compiling the 2025 RSPA Retail IT Channel KPI study, which is going to be the focus of today’s episode.

00:00:18.040 –> 00:00:26.980
Roddy: Now, something else that’s kept Team RSPA busy is making the necessary preparation so I can announce you today that registration is now open for RetailNow 2025.

00:00:27.560 –> 00:00:32.700
Roddy: The Retail Technology Channel’s number one trade show education conference and networking event.

00:00:32.700 –> 00:00:41.720
Roddy: Join RSPA and Retail IT Channel leaders live and in person July 27th through the 29th in Las Vegas on the strip at Caesar’s Palace.

00:00:41.720 –> 00:00:48.040
Roddy: With nearly 200 exhibiting organizations, RetailNow is one-stop shopping for VARs and ISVs.

00:00:48.040 –> 00:00:53.640
Roddy: With an expected 1,600 or more attendees, it’s the place for extreme industry connectivity.

00:00:54.220 –> 00:01:00.820
Roddy: Across just 48 hours, you’ll meet new partners and new solution providers who can help accelerate the success of your business.

00:01:00.820 –> 00:01:05.480
Roddy: If you’re serious about the Retail IT Channel, you have to attend RetailNow 2025.

00:01:05.480 –> 00:01:11.600
Roddy: Again, July 27th through the 29th in Vegas, RetailNow is where the industry meets.

00:01:11.600 –> 00:01:17.880
Roddy: For all the details and to register at discounted early bird rates, visit the RetailNow website today at gorspa.org/retailnow.

00:01:19.980 –> 00:01:21.900
Roddy: Again, go rspa.org/retailnow.

00:01:24.180 –> 00:01:27.040
Roddy: We hope to see you there and I hope you enjoy this episode.

00:01:34.143 –> 00:01:41.743
Roddy: Welcome to another episode of The Trusted Advisor Podcast and Video Series, powered by the Retail Solutions Providers Association.

00:01:41.743 –> 00:01:47.323
Roddy: Our goal on the pod is to accelerate the success of today’s and tomorrow’s leaders in the retail IT industry.

00:01:47.323 –> 00:01:48.763
Roddy: I’m Jim Roddy back with you again.

00:01:48.763 –> 00:01:50.423
Roddy: Thank you so much for joining us.

00:01:50.423 –> 00:01:53.143
Roddy: Now, we have a very special episode for you today.

00:01:53.143 –> 00:02:00.543
Roddy: So the RSPA recently published its 2025 Retail IT Channel KPI study.

00:02:00.543 –> 00:02:11.343
Roddy: This is the ninth year of the report and we’ve invited back two veteran channel executives to help us dig deep into the numbers and tell you what it all means for VARs, ISVs, vendors and distributors.

00:02:11.343 –> 00:02:25.263
Roddy: So before we meet our guests, if you want your own copy of the 2025 RSPA Retail IT Channel KPI study, you can go to gorspa.org, find resources, and then select the industry reports from the drop down menu.

00:02:25.263 –> 00:02:31.703
Roddy: Or if you want to shortcut that, just Google RSPA industry reports and that should be your first result.

00:02:32.163 –> 00:02:38.903
Roddy: If it’s not the Racket Sports Professionals Association, that’s an RSPA as well.

00:02:38.903 –> 00:02:42.103
Roddy: They must be getting into new industry reports as well.

00:02:42.103 –> 00:02:51.523
Roddy: They used to be the United States Professional Tennis Association, but because of Pickleball, we’ll talk marketing, I’m sure, at some point, they needed to brand and expand a little bit.

00:02:51.523 –> 00:02:56.803
Roddy: So if you go to rspa.net, that’s not us, that’s the Racket Association.

00:02:58.443 –> 00:03:02.903
Roddy: So we found out the hard way because the people have reached out to renew their membership.

00:03:02.903 –> 00:03:06.603
Roddy: We’re like, we have no idea what you’re talking about with your Racket membership.

00:03:06.603 –> 00:03:11.943
Roddy: So all right, well, before we get into talking more RSPA and channel stuff, let’s meet our guest.

00:03:11.943 –> 00:03:18.983
Roddy: Our first guest analyst today is Dean Reverman, the Vice President of Marketing for Value Added Distributor BlueStar.

00:03:18.983 –> 00:03:23.523
Roddy: Dean joined BlueStar in 2011 after 12 years working for a Kentucky-based VAR.

00:03:23.523 –> 00:03:32.683
Roddy: Dean’s a member of the RSPA marketing community, and he’s co-host of the award-winning BlueStar Nation Podcast, which is closing in on 250 episodes.

00:03:32.683 –> 00:03:36.943
Roddy: This is Dean’s third year helping us analyze the KPI study.

00:03:36.943 –> 00:03:37.883
Roddy: Dean, welcome back.

00:03:37.883 –> 00:03:39.543
Roddy: Always a pleasure to connect with you.

00:03:39.543 –> 00:03:40.203
Reverman: Thank you, Jim.

00:03:40.203 –> 00:03:44.583
Reverman: It’s a pleasure to be here, and look forward to diving into this study as always.

00:03:44.583 –> 00:03:45.723
Reverman: Good stuff in here.

00:03:45.723 –> 00:03:46.183
Roddy: Excellent.

00:03:46.183 –> 00:03:46.423
Roddy: Great.

00:03:46.423 –> 00:03:47.543
Roddy: This will be fun.

00:03:47.543 –> 00:03:54.563
Roddy: Our second guest is Will Atkinson, the Vice President of Customer Experience at ISV VAR Hybrid POS Nation.

00:03:55.083 –> 00:04:02.003
Roddy: Will was President of CAP Software from 2006 to 2020, until CAP was acquired by POS Nation.

00:04:02.003 –> 00:04:08.283
Roddy: Will’s been active in the Association for years on the membership advisory group, and as an RSPA board member.

00:04:08.283 –> 00:04:11.583
Roddy: This is also Will’s third year analyzing the KPI study.

00:04:11.583 –> 00:04:14.543
Roddy: Hey, Will, welcome back to The Trusted Advisor.

00:04:14.543 –> 00:04:16.243
Atkinson: Glad to be here, Jim.

00:04:16.243 –> 00:04:16.663
Roddy: Great.

00:04:16.663 –> 00:04:22.303
Roddy: Folks, we asked Dean and Will to help us analyze the study because of the broader perspective of the channel.

00:04:22.563 –> 00:04:31.643
Roddy: We talked about Will is part of a hybrid ISV VAR, who worked with many reseller partners, and BlueStar works with hundreds of VARs and ISVs throughout North America.

00:04:31.643 –> 00:04:37.303
Roddy: Dean has that front row seat to a lot of the changes in the solution provider community.

00:04:37.303 –> 00:04:40.903
Roddy: I want to keep the first part of our conversation as open and as we can get.

00:04:40.903 –> 00:04:45.663
Roddy: You guys can surprise me with any insight and observations that we have.

00:04:45.663 –> 00:04:50.663
Roddy: The KPI study, it’s over 8,000 words long, and then it’s got thousands of digits.

00:04:51.483 –> 00:04:56.223
Roddy: From all that data, Dean, I want you to go first because Will went first last year.

00:04:56.223 –> 00:05:00.903
Roddy: What was the first thing that jumped out to you from the KPI study?

00:05:00.903 –> 00:05:02.083
Reverman: Optimism.

00:05:02.083 –> 00:05:04.303
Reverman: Optimism is back, I guess.

00:05:05.923 –> 00:05:09.943
Reverman: 2024 was a unique year for a lot of folks.

00:05:09.943 –> 00:05:20.023
Reverman: When we came into it, we thought that it had the potential of being a really bad year in general, and certainly the first part of the year started out that way.

00:05:20.823 –> 00:05:34.283
Reverman: All the tea leaves were being red correctly, and so that was not so good, but then towards the second half of the year, and obviously it pulled out a little bit better than we had anticipated.

00:05:34.283 –> 00:05:37.363
Reverman: Last year, a lot of people talked about flat is good.

00:05:37.363 –> 00:05:42.643
Reverman: If you were just flat or a little bit down, that was actually seen as a positive thing.

00:05:42.643 –> 00:05:47.283
Reverman: We had a lot of vendors that took it on the chin last year from a sales perspective.

00:05:48.283 –> 00:05:55.823
Reverman: What I love to see is just right out of the gate, that the optimism is pulling through in this particular survey.

00:05:55.823 –> 00:06:02.183
Reverman: People are feeling relatively optimistic about where their revenue growth is going to go.

00:06:02.183 –> 00:06:08.343
Reverman: When you dive into some of those numbers, and I’m just focusing in on the VAR revenue growth.

00:06:09.703 –> 00:06:14.723
Reverman: I love this, by the way, I love this survey, Jim, because you have so much history here.

00:06:14.963 –> 00:06:24.063
Reverman: We can go back all the way to 2016 to see and to analyze what the feelings were and what the expectations were of the group.

00:06:24.063 –> 00:06:30.903
Reverman: So when you looked at it, for VARs that were thinking that they were going to have revenue growth under 5 percent.

00:06:30.903 –> 00:06:34.343
Reverman: Well, back in 2016, and admittedly, that was a bad year.

00:06:34.343 –> 00:06:37.223
Reverman: We got to go back and look at that year because that was a bad year.

00:06:37.243 –> 00:06:43.403
Reverman: 65 percent of VARs actual revenue was under 5 percent growth.

00:06:44.083 –> 00:06:48.363
Reverman: Now, today, the expectation is that’s going to be 38 percent.

00:06:49.003 –> 00:06:53.763
Reverman: So they’re seeing, so there’s just this revenue growth.

00:06:55.483 –> 00:06:59.363
Reverman: They’re seeing that they’re not going to have less than 5 percent, which is really good.

00:06:59.363 –> 00:07:03.523
Reverman: But you really saw a lot of growth in that 5 to 19 percent.

00:07:03.523 –> 00:07:09.383
Reverman: Back in 2016, only 25 percent thought they were going to see growth in the 5 to 19 percent.

00:07:09.383 –> 00:07:09.943
Reverman: Now it’s 44.

00:07:10.563 –> 00:07:24.363
Reverman: So, you’re seeing revenue growth in actual numbers, but you’re also seeing the optimism come back, where you’re seeing it both from VARs and ISVs and the hybrids that answered the survey.

00:07:24.363 –> 00:07:27.523
Reverman: There seems to be a little bit of optimism going into 2025.

00:07:27.523 –> 00:07:29.563
Reverman: So I’ll pause there for a second.

00:07:29.563 –> 00:07:33.223
Reverman: But for me, that was one of the key highlights that came out.

00:07:33.223 –> 00:07:33.583
Roddy: Got it.

00:07:33.583 –> 00:07:34.123
Roddy: Thank you, Dean.

00:07:34.123 –> 00:07:38.963
Roddy: Will, can you talk about what Dean is focusing on there, the optimism?

00:07:39.023 –> 00:07:40.063
Roddy: What is your take on that?

00:07:40.063 –> 00:07:41.963
Roddy: What’s your reaction to what Dean said?

00:07:41.963 –> 00:07:51.823
Roddy: And then some of the numbers he shared from the report related to why VARs and ISVs had stronger than expected 2024s, and they’re even more optimistic about next year?

00:07:51.823 –> 00:07:52.563
Atkinson: Yeah, for sure.

00:07:52.563 –> 00:07:54.763
Atkinson: So I think last year was a funny time.

00:07:55.263 –> 00:08:01.163
Atkinson: We’ve been in a funny time for five years now, and probably we would have said the same thing in 2019 if you’d asked anybody with all the change.

00:08:01.163 –> 00:08:07.943
Atkinson: And there’s a lot of things going on outside of the purview of this group that we don’t want to dive into politics or whatever.

00:08:08.083 –> 00:08:10.683
Atkinson: But obviously, COVID was a big disruption.

00:08:10.683 –> 00:08:15.003
Atkinson: And I think we, in 2023, had this sense of new normal.

00:08:15.003 –> 00:08:19.423
Atkinson: You know, we’re back to doing business the way we were, and there was a lot of optimism.

00:08:19.423 –> 00:08:30.383
Atkinson: There were several things that went on in the channel, and really the second half of 2023 that drove a lot of growth, drove a lot of thinking, okay, this is the baseline, we’re back.

00:08:30.383 –> 00:08:35.683
Atkinson: And then the first half, first quarter of 2024, really brought us crashing back to Earth in a lot of ways.

00:08:35.963 –> 00:08:41.363
Atkinson: Some of the things that had happened in that second half were blips, not new normal trends.

00:08:41.363 –> 00:08:43.403
Atkinson: And so a lot of people had reset expectations.

00:08:43.403 –> 00:08:45.723
Atkinson: But then we did, we got there in the second half of 2024.

00:08:45.723 –> 00:08:52.223
Atkinson: And you can see that in all these projections, people said, going into 2024, it was going to be a great year.

00:08:52.223 –> 00:08:58.683
Atkinson: And then for people that weren’t able to adapt or were focused on the wrong markets, didn’t turn out that way.

00:08:58.723 –> 00:09:05.763
Atkinson: But I know we saw, specifically in some verticals, that behavior where people had just kind of hunkered down and held on.

00:09:05.763 –> 00:09:09.143
Atkinson: Uncertainty is a really bad thing for any market.

00:09:09.143 –> 00:09:10.463
Atkinson: You look at the stock market or anything else.

00:09:10.463 –> 00:09:17.703
Atkinson: But if you’re planning a business investment, you’re saying, hey, I’m going to go spend the type of money I spend every five years.

00:09:17.703 –> 00:09:23.343
Atkinson: And you’re looking at the news, and it’s all interest rates, inflation, bad news.

00:09:23.343 –> 00:09:24.983
Atkinson: Like money is a problem for everybody.

00:09:24.983 –> 00:09:26.283
Atkinson: Well, I’m just not going to do anything.

00:09:26.283 –> 00:09:27.183
Atkinson: I’m going to sit on that.

00:09:27.983 –> 00:09:37.023
Atkinson: But if you’ve been optimistic for a quarter, and then put your money on the sidelines, and you think my business has opportunity, I’m going to go add a new store.

00:09:37.023 –> 00:09:39.383
Atkinson: And I’m speaking as the retailer restaurateur.

00:09:39.383 –> 00:09:46.823
Atkinson: I’ve got actually good things happening in my business, but everything I see in the news is negative, probably going to be a problem for me.

00:09:46.823 –> 00:09:48.943
Atkinson: So I can sit back and wait a little bit.

00:09:48.943 –> 00:09:54.823
Atkinson: But if I get six months down the road, I’m still thinking, hey, my numbers are good in my existing store or restaurant, whatever it is.

00:09:54.903 –> 00:09:57.503
Atkinson: Because I don’t want to just sit here losing opportunity.

00:09:57.623 –> 00:09:58.823
Atkinson: I need to go ahead and do something.

00:09:58.823 –> 00:09:59.923
Atkinson: And I think that’s what happened.

00:09:59.923 –> 00:10:03.023
Atkinson: People just freed up that investment in the second half of the year.

00:10:03.023 –> 00:10:05.923
Atkinson: And so a lot of verticals ended up doing really well.

00:10:05.923 –> 00:10:09.123
Roddy: Yes, when the year came to an end.

00:10:09.123 –> 00:10:11.183
Roddy: A couple of things, just to clarify one.

00:10:11.183 –> 00:10:14.603
Roddy: This is the ninth year of the report, that this is almost like study nine and a half.

00:10:14.603 –> 00:10:22.063
Roddy: Because in 2020, we released the report like we usually do in late February, March, and then the world fell apart COVID-wise.

00:10:22.063 –> 00:10:23.123
Roddy: So we kind of made the report.

00:10:23.463 –> 00:10:24.783
Roddy: A lot of the projections are irrelevant.

00:10:24.783 –> 00:10:29.203
Roddy: We went back and did those projections again.

00:10:29.203 –> 00:10:32.303
Roddy: Your point, Will, is spot on about the uncertainty.

00:10:32.303 –> 00:10:34.143
Roddy: That’s one thing that we found out.

00:10:34.143 –> 00:10:40.203
Roddy: There’s, I’m going to do this or I’m going to do this instead, but there’s always that option of doing nothing.

00:10:40.203 –> 00:10:47.843
Roddy: I’m not going to a show, not finding a new partner, and like you said, you’re in a hunker down, batten down the hatches and doing it that way.

00:10:47.843 –> 00:10:49.123
Roddy: So that’s what it seems like.

00:10:49.123 –> 00:10:53.843
Roddy: There were still some folks who did that, but a lot of that ended up shaking out before the end of the year.

00:10:53.843 –> 00:10:58.223
Roddy: So yes, stronger than some folks again who haven’t read this study yet.

00:10:58.243 –> 00:11:07.083
Roddy: 2024 came in stronger than expected than what a lot of folks thought it was going to be, and 2025, they’re even more optimistic about it.

00:11:07.083 –> 00:11:09.043
Roddy: So optimism is the first point.

00:11:09.043 –> 00:11:10.863
Roddy: Will, it is now your turn.

00:11:10.863 –> 00:11:15.803
Roddy: What is the number one thing from this year’s KPI study that caught your attention?

00:11:15.803 –> 00:11:23.363
Atkinson: So I think this is a thing that we’ve been talking about for a long time, and I think maybe 15 years ago, we said the VAR is dead, right?

00:11:23.363 –> 00:11:38.363
Atkinson: You know, and it hasn’t come true, and it probably won’t ever come true, but I still think it’s dangerous to be a pure VAR, where you’re just reselling products and not adding any real knowledge, you know, based services or integrations or something.

00:11:38.363 –> 00:11:50.243
Atkinson: And so you see that trend accelerating through the last several years, and especially a lot of people seem to be optimistic going into 2025 about how we’re going to add integration layers or software value.

00:11:50.243 –> 00:12:04.323
Atkinson: And so becoming that hybrid, and I’m not suggesting everybody go full bore and become an ISV, you know, that’s hard, it’s expensive, it’s risky, and you may not, you know, you may bet all your eggs on that and then fail.

00:12:04.323 –> 00:12:16.703
Atkinson: And that’s why, you know, you see some of these negative numbers where people saw revenue shrinkage or risk, because you kind of jump all in and say, we’re going to spend all of our investment dollars on hiring a bunch of software developers and just figure it out as we go.

00:12:16.703 –> 00:12:18.323
Atkinson: And that’s a that’s a dangerous strategy.

00:12:18.323 –> 00:12:22.283
Atkinson: But you know, I think bars are uniquely positioned to go talk to their customers.

00:12:22.283 –> 00:12:35.563
Atkinson: And if you’ve got 200 or 500 existing customers in a wide range of restaurants or a wide range of retailers, go talk to them and say, hey, you know, we’ve been selling you this software product and this payment processing and this hardware.

00:12:35.563 –> 00:12:40.043
Atkinson: What problems are you not, you know, are we not solving for you?

00:12:40.043 –> 00:12:42.223
Atkinson: You know, what problems have you been out Googling?

00:12:42.323 –> 00:12:50.843
Atkinson: How do I solve my curbside pickup or my online inventory or my whatever it is, you know, my text messaging customers?

00:12:50.843 –> 00:13:06.803
Atkinson: And I think Avar can go take baby steps and either find a partner or, you know, just outsource like limited development dollars and say, help us bolt these things together, you know, help us provide this different thing and become that, you know, intro hybrid.

00:13:06.803 –> 00:13:10.343
Atkinson: You know, you don’t have to go full bore and become a full ISV and also sell direct.

00:13:10.403 –> 00:13:14.163
Atkinson: You can continue selling other people’s products, but add that layer.

00:13:14.163 –> 00:13:20.383
Atkinson: And I think that’s what value add is really becoming the mean is adding that hybridization of your products and platforms.

00:13:20.383 –> 00:13:20.683
Roddy: Got it.

00:13:20.683 –> 00:13:34.303
Roddy: And so just to clarify, so thank you for that, Will, just when you say it’s dangerous to be a pure Avar, you’re talking about here’s my product and solution set, and here’s what I’m going to do and almost like it or leave it, is essentially what it is.

00:13:34.303 –> 00:13:43.583
Roddy: And so you’re saying go in there and be more advisory, but then it’s not just, hey, let me twist what I’m currently selling to you, shape it from the way that I phrase it to you.

00:13:43.583 –> 00:13:47.083
Roddy: Go out and find some new partners who can actually solve the problems.

00:13:47.083 –> 00:13:52.723
Roddy: Or part of that partnership could be somebody could help you develop on top of your current set of software products.

00:13:52.723 –> 00:13:53.443
Roddy: Is that what you’re saying?

00:13:53.443 –> 00:13:54.703
Roddy: I just want to clarify that.

00:13:54.703 –> 00:13:55.603
Atkinson: Yeah, exactly.

00:13:55.603 –> 00:14:03.503
Atkinson: If you’re just buying product and delivering it to the customer, somebody is going to come eat your lunch potentially.

00:14:03.503 –> 00:14:11.423
Atkinson: But if you’re saying, hey, I’m going to go find partners that help both these things together or hire a part-time web developer that can do some unique stuff for the customer.

00:14:11.523 –> 00:14:15.503
Atkinson: It doesn’t have to be half a million dollars a year in software development.

00:14:15.503 –> 00:14:25.183
Atkinson: You could spend $30,000 and get some just project-based add on these things, but then you sell it to the customer into that recurring revenue, which I’m sure we’re going to talk about more today.

00:14:25.583 –> 00:14:26.863
Atkinson: It’s another value add.

00:14:26.863 –> 00:14:33.303
Atkinson: It’s another thing that makes you stickier with that customer and you’re not just selling some other products into that site.

00:14:33.303 –> 00:14:33.603
Roddy: Great.

00:14:33.603 –> 00:14:35.503
Roddy: Dean, what’s your take on what Will said?

00:14:35.503 –> 00:14:36.503
Roddy: Dangerous to be a PureVar.

00:14:37.203 –> 00:14:37.823
Reverman: Dead on.

00:14:38.003 –> 00:14:47.743
Reverman: And I’ll add into this, the part of the narrative here, and the numbers kind of come out when you look at the as a service, which is in this survey here.

00:14:48.163 –> 00:14:55.223
Reverman: We’ve been asking in this survey, what percentage of your business has been transitioned into as a service?

00:14:55.223 –> 00:15:03.283
Reverman: And when you look at it, back in 2016, those folks that said 0% were transitioned was 12%.

00:15:04.043 –> 00:15:11.543
Reverman: So back in, so nine years ago, 12% of folks hadn’t transitioned any portion of their business into an as a service.

00:15:11.543 –> 00:15:14.443
Reverman: Today, that is now down to just 1.2%.

00:15:14.623 –> 00:15:16.643
Reverman: So let’s call it 1%, right?

00:15:16.643 –> 00:15:30.343
Reverman: So the message about as a service and adding on services, and everything that Will just said so eloquently about how you need to transition a portion of your business, is panning out in the survey.

00:15:30.723 –> 00:15:35.463
Reverman: When you look at those that say barely transitioned, well, back nine years ago, it was 21%.

00:15:36.463 –> 00:15:37.623
Reverman: Now, it’s only 9%.

00:15:38.303 –> 00:15:47.803
Reverman: So when you add those up, again, nine years ago, about 30% of people hadn’t even done or barely done anything in the as a service world.

00:15:47.803 –> 00:15:49.503
Reverman: Now, that’s all the way down to 10%.

00:15:50.063 –> 00:15:54.183
Reverman: So, and for those 10%, I think Will’s accurate.

00:15:54.183 –> 00:15:58.203
Reverman: If you’re still in that, you really need to think of a way to get out of that.

00:15:58.843 –> 00:16:09.823
Reverman: And I will, again, just bring to the table, the ultimate list of recurring revenue products and services now at version 4.0 that you can find on the RSPA site.

00:16:09.823 –> 00:16:11.103
Reverman: What a brilliant list.

00:16:11.103 –> 00:16:20.783
Reverman: I mean, if you’re looking for a way, because there’s a lot of ways, right, that resellers, I remember when I worked for a reseller, you’re always gauging, what do my customers need?

00:16:20.783 –> 00:16:24.323
Reverman: What can I do with the skill sets that I have in place?

00:16:25.003 –> 00:16:35.103
Reverman: We had web developers on staff, and so we knew that, okay, that’s a certain discipline, but maybe we can start getting into some of the programming aspects as well.

00:16:35.103 –> 00:16:41.083
Reverman: A lot of it depends on who your employees are, what those skill sets are and where you can move.

00:16:41.083 –> 00:16:47.023
Reverman: But if you look at that ultimate list of recurring revenue, there’s all kinds of opportunities there.

00:16:47.023 –> 00:16:50.803
Reverman: I’ll call out a couple of them that are related.

00:16:51.063 –> 00:16:57.943
Reverman: You get into cellular failover, which starts getting into the data that folks need to run their business.

00:16:57.943 –> 00:17:06.423
Reverman: There is an opportunity there for making revenue, getting revenue as a part of that, that you start looking into.

00:17:06.423 –> 00:17:16.723
Reverman: Electronic shelf labels, for whatever reason, that’s starting to get a real run, I think in the marketplace, because that can be an as a service or some programming that goes into that.

00:17:16.723 –> 00:17:28.323
Reverman: So there are a couple of areas out there, products and services that you can add, but it’s clear that I think the industry has gotten the message that they need to move in that, which is good.

00:17:28.323 –> 00:17:32.623
Reverman: I think that a lot of folks have moved in there, and I’ll weave it back to the optimism.

00:17:32.623 –> 00:17:41.143
Reverman: When you think about it, if you feel more optimistic, if you have more cards that you can play, then just selling POS.

00:17:41.143 –> 00:17:59.523
Reverman: If you go into it with a mindset of, how can I help my customer, as Will was just saying, it’s a much better position to be much more optimistic about what you can do for your customers and compete against those, the 800 numbers, those of the world, the VC back that are just narrowing in on specific things.

00:17:59.523 –> 00:18:02.643
Reverman: You can compete more broadly with that.

00:18:03.463 –> 00:18:06.463
Reverman: It’s a good call out, Will, really good call out.

00:18:06.463 –> 00:18:06.943
Roddy: Excellent.

00:18:06.943 –> 00:18:08.183
Roddy: Thanks for sharing some of that data.

00:18:08.183 –> 00:18:18.143
Roddy: It’s interesting, Dean, I always look at the other side of that chart in terms of who’s doing more recurring revenue and you’re paying attention to see how dwindling that other side is.

00:18:19.343 –> 00:18:22.683
Roddy: So our listeners are on the same page in terms of recurring revenue.

00:18:22.683 –> 00:18:24.963
Roddy: So I’m reading from the report.

00:18:24.963 –> 00:18:27.603
Roddy: It’s like quoting myself, reading from the report.

00:18:27.603 –> 00:18:35.483
Roddy: As long-time proponents of the As-a-Service business model, we’re thrilled Retail IT solution providers continue to embrace recurring revenue.

00:18:35.483 –> 00:18:37.723
Roddy: This is where Dean, I’m looking at the other side of the chart.

00:18:37.723 –> 00:19:02.383
Roddy: The number of solution providers in the top two categories, completely transition, that means 85 to 100 percent of the revenue is recurring, and mostly transition, that means 61 to 84 percent, achieved a record high 59.3 percent share in 2025, surpassing last year’s record 56.3, and respondents expect that figure to increase to 69.8 in 2025.

00:19:02.383 –> 00:19:08.003
Roddy: Year after year, they’ve been pretty consistent in terms of that they have been moving up in order to do that.

00:19:08.143 –> 00:19:11.083
Roddy: So, yeah, so the number is really, really…

00:19:11.083 –> 00:19:14.143
Reverman: They do, and it’s interesting that you picked up on that.

00:19:14.303 –> 00:19:20.743
Reverman: I was looking at the other tier, because to me, I don’t know that we’re kind of right around that 40 percent.

00:19:20.743 –> 00:19:21.343
Reverman: Is that where we’re at?

00:19:21.343 –> 00:19:24.403
Reverman: We’re 100 percent completely transitioned.

00:19:24.403 –> 00:19:26.923
Reverman: I mean, last year we were at 30 percent.

00:19:27.303 –> 00:19:33.843
Reverman: When they’re looking at the projections, about 42 percent of folks think that they’re going to be 100 percent completely transitioned.

00:19:34.563 –> 00:19:41.923
Reverman: For me, the reality is, maybe it hovers right around that 50 percent that’s 100 percent completely transitioned.

00:19:41.923 –> 00:19:51.183
Reverman: I was just looking for the ball moving on the low end, trying to get those stragglers that are like, I don’t need it as a service type of a thing.

00:19:51.483 –> 00:19:57.863
Reverman: I really think that in order to be relevant in today’s world, you have to have these types of services.

00:19:57.863 –> 00:20:04.943
Reverman: You have to look to get sticky with your customer, and the best way to do that is through as a service, and there’s a myriad of ways to do it.

00:20:04.943 –> 00:20:05.523
Roddy: Thank you for that.

00:20:05.983 –> 00:20:06.943
Roddy: Go ahead, Will.

00:20:08.243 –> 00:20:09.223
Atkinson: It sounds risky.

00:20:09.463 –> 00:20:12.843
Atkinson: I think that’s been the objection when you talk to smaller bars or traditional bars.

00:20:12.843 –> 00:20:13.983
Atkinson: You said, how do I do that?

00:20:14.243 –> 00:20:16.523
Atkinson: I can’t go hire a bunch of new people.

00:20:16.523 –> 00:20:18.143
Atkinson: We don’t know that.

00:20:18.143 –> 00:20:22.923
Atkinson: I would challenge you, go talk to your technicians and ask if they really just want to be techs for the rest of their lives.

00:20:22.923 –> 00:20:29.483
Atkinson: Because I know we have steady turnover of techs leaving for development opportunities, website work, cybersecurity.

00:20:29.963 –> 00:20:31.403
Atkinson: These are upperly mobile people.

00:20:31.403 –> 00:20:36.143
Atkinson: And to stick with Dean’s optimism, you want to be optimistic about your workforce.

00:20:36.143 –> 00:20:42.383
Atkinson: And if you just have to say to everybody like status quo, you’re going to do the same thing this year that you did last year, and next year, and onward.

00:20:42.383 –> 00:20:43.423
Atkinson: They’re not going to stay.

00:20:43.423 –> 00:20:46.003
Atkinson: People want change in their own careers.

00:20:46.003 –> 00:20:58.123
Atkinson: And so you can try it out to say, hey, one of your younger techs or senior techs that’s got some, really knows the market, but also has been interested in, just talk to your guys, are they taking web design courses at night?

00:20:58.223 –> 00:21:00.343
Atkinson: Are they looking at development?

00:21:00.343 –> 00:21:12.603
Atkinson: I bet you have somebody on staff that’s doing that and say, okay, let’s have a half day breakout session where we just talk about the things we do, what you know, and maybe we can come up with an idea of something we can try for a handful of customers.

00:21:12.723 –> 00:21:14.543
Atkinson: You just have to start somewhere.

00:21:14.543 –> 00:21:17.303
Atkinson: Don’t let starting be the obstacle.

00:21:17.303 –> 00:21:18.583
Reverman: Yeah.

00:21:18.583 –> 00:21:19.483
Roddy: Great, excellent.

00:21:19.483 –> 00:21:30.003
Roddy: And then also just for clarification for folks who want to read more about it, Dean mentioned the ultimate list of recurring revenue products and services for point-of-sale VARs.

00:21:30.003 –> 00:21:33.163
Roddy: We now have like Dean said, version 4.0.

00:21:33.163 –> 00:21:34.543
Roddy: It’s on the RSPA website.

00:21:34.543 –> 00:21:39.283
Roddy: Or if you just Google RSPA ultimate recurring revenue, you should be able to find that again.

00:21:39.283 –> 00:21:40.583
Roddy: Make sure it’s 4.0.

00:21:40.583 –> 00:21:52.503
Roddy: Now with the 57 products and services on that list, and it’s not a dream list, it is products and services actually being implemented by POS VARs in 2024 when we updated that.

00:21:52.563 –> 00:21:54.483
Roddy: So all right, very good.

00:21:54.483 –> 00:21:57.523
Roddy: So let’s do this again.

00:21:57.523 –> 00:22:01.003
Roddy: So Dean, what’s point number two?

00:22:01.003 –> 00:22:04.183
Roddy: What’s another item from the survey that you felt was important?

00:22:06.203 –> 00:22:07.663
Reverman: Healthy margins, right?

00:22:07.663 –> 00:22:15.343
Reverman: So you would think that on an off year, when sales were maybe harder to get than before, that you would see some margin erosion.

00:22:15.343 –> 00:22:16.803
Reverman: That was my expectation.

00:22:16.943 –> 00:22:21.563
Reverman: Okay, they’re gonna have to give up some margin to get the deals in, to pull those deals in.

00:22:22.043 –> 00:22:23.763
Reverman: And that’s not necessarily the case.

00:22:23.763 –> 00:22:35.363
Reverman: Now, I think we can dive into it, because the survey does a fantastic job of lining out where VARs are getting their margin from and their profit, if you will.

00:22:35.363 –> 00:22:52.583
Reverman: But just in general, if you look at the overall trends, 2024 was a pretty good year with just about 10% saying that they were under 5% in profitability, but 68.5% showing double-digit margins.

00:22:52.583 –> 00:22:59.563
Reverman: That’s just a little bit off from perhaps the best year, which was 2022, as the survey relays.

00:23:00.743 –> 00:23:10.163
Reverman: I was comforted by the fact that, again, you pucker up thinking, well, this isn’t going to be such a good year, we’re going to have to leave some margin on the table to pull some stuff through.

00:23:10.163 –> 00:23:11.163
Reverman: I didn’t really see that.

00:23:11.343 –> 00:23:14.123
Reverman: You saw some healthy margins, and that’s a good thing.

00:23:14.123 –> 00:23:22.763
Reverman: That also to me is an indicator that maybe again further expanding on the fact that people are getting into the as a service.

00:23:23.243 –> 00:23:27.203
Reverman: They’re going out and they’re finding more profitable things to do.

00:23:27.203 –> 00:23:37.003
Reverman: Now, the argument that the survey makes is, our VAR is still too reliant on the payments side of the business and the revenue that they’re getting from that.

00:23:37.003 –> 00:23:43.623
Reverman: I think that you can make a good argument that maybe that’s the cash cow that is the 800-pound gorilla.

00:23:43.903 –> 00:23:46.563
Reverman: Man, I’m using all kinds of cliches here.

00:23:47.143 –> 00:23:48.203
Roddy: Stacking them up.

00:23:48.203 –> 00:23:49.323
Reverman: Stacking them up, baby.

00:23:49.603 –> 00:23:50.543
Reverman: But you know what I mean?

00:23:50.543 –> 00:24:02.943
Reverman: I mean, I think it’s worth asking that question because if you become too reliant on that, that means that you’re not pivoting off of your core to find other avenues.

00:24:02.943 –> 00:24:06.323
Reverman: And you really need to do that to stay profitable.

00:24:06.323 –> 00:24:09.323
Reverman: So I like the fact that we’re still seeing high margins.

00:24:10.523 –> 00:24:10.763
Roddy: Great.

00:24:10.763 –> 00:24:17.003
Roddy: And so, Will, before I get your take on that, so a couple data points just to add from the report.

00:24:17.003 –> 00:24:25.623
Roddy: Like Dean had said, for this year, we had 68.5 percent of VARs reported double-digit margins.

00:24:25.623 –> 00:24:31.103
Roddy: That’s a 10 percent margin or better, is what they’ve been doing year after year.

00:24:31.103 –> 00:24:36.163
Roddy: And then we also asked a question to VARs and hybrids, and we compared them.

00:24:36.163 –> 00:24:42.423
Roddy: And again, a hybrid is somebody who like Will, they’re both doing software and they’re working as a reseller.

00:24:42.423 –> 00:24:45.403
Roddy: And so I don’t have those numbers exactly in front of me, but it’s ballpark.

00:24:45.403 –> 00:24:52.823
Roddy: Both VARs and hybrids, about a third of their, we asked them who has more than half of the revenue coming from one source.

00:24:52.823 –> 00:24:57.463
Roddy: A third of each of those groups said more than half the revenue is coming from payments.

00:24:57.463 –> 00:24:59.323
Roddy: So that is something significant.

00:24:59.323 –> 00:25:06.203
Roddy: And your payments vendors, if they start changing the way that they operate, you might have a revenue hit there in the short term.

00:25:06.203 –> 00:25:15.683
Roddy: So, Will, your reaction to Dean calling out margins in general, and then also our VARs and hybrids, maybe is a little too reliant on payments.

00:25:15.683 –> 00:25:17.203
Roddy: What’s your reaction?

00:25:17.203 –> 00:25:17.323
Atkinson: Yeah.

00:25:17.323 –> 00:25:22.243
Atkinson: I mean, I think the interesting additional question, I would ask individuals is, where’s your margin coming from?

00:25:22.243 –> 00:25:26.343
Atkinson: And I bet you it’s not from selling hardware and standard products.

00:25:26.543 –> 00:25:34.663
Atkinson: That’s diversifying, finding ways to sell peer services, ways to sell software that’s not a commoditized.

00:25:34.663 –> 00:25:35.763
Atkinson: That’s where we make margin.

00:25:35.763 –> 00:25:42.563
Atkinson: If it’s just I sell another all-in-one or another printer, we know what the margins are on those and it’s not 65 percent.

00:25:42.563 –> 00:25:48.043
Atkinson: So I think that really points to the positive trend and the optimism.

00:25:48.043 –> 00:25:56.103
Atkinson: Like if we can keep, as this group doing that, finding ways to sell unique things, then we can protect margin and add to it.

00:25:56.103 –> 00:25:57.663
Atkinson: I think payments is an important part of that.

00:25:58.003 –> 00:25:59.123
Atkinson: It’s not going away.

00:25:59.123 –> 00:26:17.943
Atkinson: It is the 800-pound gorilla in the room, and the key is making sure that you have a real partnership agreement, you know what it says, you know what your responsibility is, so you’re not breaching it, you know what the payment processor responsibility is to you, and then making sure that it’s part of your services that’s sticky.

00:26:17.943 –> 00:26:42.843
Atkinson: The issue with pure payments being too big of a mix is, if you’re just a referral partner, you have no control over the platform, you have no control over the agreements, you’re maybe just selling processing sort of as an ISO on the side, we’ve seen VARs and ISVs do that, where there’s a menu of processors, and it’s just this thing, hey, we’ll just offer it and hope it works.

00:26:42.843 –> 00:26:56.583
Atkinson: Like the hope is not a great plan, but having a more cohesive, sticky offering, where just anytime we sell you software, you’re going on our payments, and these things are in lockstep, then that’s really just operating revenue.

00:26:56.643 –> 00:27:06.543
Atkinson: It doesn’t matter that it’s payments, but if the customer can easily switch, or the processor can easily do something platform-wide that negatively impacts you, then you’re at risk.

00:27:06.543 –> 00:27:21.103
Atkinson: So I just think being careful about the way you’re going to market with it, and being careful about the agreements reduces a lot of that risk, but to say, oh, it’s too much, that there’s some percentage, like if I get to 60% of my revenue is coming from payments I need to change is maybe a dangerous thought.

00:27:21.103 –> 00:27:27.103
Atkinson: So the reality is nobody’s growing at double-digit growth without addressing payments.

00:27:28.183 –> 00:27:28.523
Roddy: Agree.

00:27:28.523 –> 00:27:29.083
Roddy: Well said.

00:27:29.083 –> 00:27:35.363
Roddy: Before I get Will’s take on it, just I want to add one more data point where we were just talking about.

00:27:35.363 –> 00:27:45.623
Roddy: When we compare the pure VARs and then the ISV VAR hybrids, how much they rely on services for more than half of their revenue.

00:27:45.623 –> 00:27:52.083
Roddy: Only 7% of VARs said they get more than half of the revenue from services, triple that for the hybrids.

00:27:52.443 –> 00:27:55.443
Roddy: And that’s not even counting software as one of the services.

00:27:55.443 –> 00:28:00.623
Roddy: It seems like the more sophisticated VARs are not leaning so much on hardware.

00:28:00.623 –> 00:28:09.023
Roddy: They’re really making sure they stack up those services, which again, we’ve seen have been for the most part far more profitable than other things that they offer.

00:28:09.023 –> 00:28:09.903
Roddy: So, all right.

00:28:10.063 –> 00:28:18.723
Roddy: I’m also feeling really good guys, just so you know, because in a couple of weeks, I’m giving a brief presentation at the NCC Partner Conference.

00:28:18.723 –> 00:28:24.403
Roddy: And the three points that I pulled out from the KPI study are the ones that you guys just mentioned so far.

00:28:24.403 –> 00:28:26.643
Roddy: So, I’m really feeling really good right now.

00:28:26.643 –> 00:28:32.743
Roddy: Either we’re, I’m on the right track with you guys, we’re all heading down the run track, but I think it’s more the former rather than the latter.

00:28:32.743 –> 00:28:38.663
Roddy: So, Will, what’s another important data point or learning from the KPI study you wanted to call out to our audience?

00:28:38.663 –> 00:29:02.063
Atkinson: So, one that jumped out at me and it’s continued to be a trend is the nichefication, as we look at and it’s further down in the report, but you’ve got the more narrowly focused verticals like wine and liquor and beverage is 44% of, you know, if we’re targeting only one vertical and you go down to specifics like, you know, cannabis jumped up the list, but ethnic grocery restaurant, garden nursery.

00:29:02.063 –> 00:29:10.643
Atkinson: And the thing that speaks to me is that we’re talking about verticals that are not so easily targeted by the national chain operators.

00:29:10.643 –> 00:29:16.943
Atkinson: And I don’t mean the toasts and the clovers, but the actual retailers and restaurateurs that we’re competing against.

00:29:16.983 –> 00:29:21.563
Atkinson: You know, if my direct competitor is McDonald’s or Walmart, I’m in trouble.

00:29:21.563 –> 00:29:37.823
Atkinson: But if my direct competitor is another local chain of Indian groceries or another premium burger bar thing or whatever it is, like, there’s a lot of room for those businesses, you know, and for forever in the channel, restaurants was the place to be over retail, speaking as a retail ISV for a long time.

00:29:38.183 –> 00:29:45.583
Atkinson: It’s always the non-sexy place to be because there were so many more new restaurants that were high growth, high volume popping up.

00:29:45.643 –> 00:29:47.783
Atkinson: And that was just a good place for RSPA to be.

00:29:47.783 –> 00:29:54.843
Atkinson: If you look down that vertical list, now a lot of them are retailers, and it’s for that same reason, you know, that we’re not competing against the big box stores.

00:29:54.843 –> 00:30:05.003
Atkinson: You can’t, for the most part, go buy beer, wine, liquor at all these big box stores, or you can’t buy liquor, you know, maybe you can buy beer, wine, but you get a limited selection when you go to the grocery store or Walmart.

00:30:05.003 –> 00:30:11.163
Atkinson: But I can go to a local liquor store and get that bonded bottle of bourbon or that craft beer, whatever it is.

00:30:11.163 –> 00:30:21.763
Atkinson: And same for restaurants, you know, there’s just there’s not in that mid-tier, you know, medium fine dining and certainly fine dining, they’re just not national chains competing against our target emergence.

00:30:21.763 –> 00:30:34.343
Atkinson: So the you know, there’s actually a book that we’ve talked about, Jim, that’s Nailing Your Niche, but it’s, you know, finding out where you have a local market and where your products are a good fit, and then refining that offering and then that service level.

00:30:34.343 –> 00:30:40.683
Atkinson: And going back to what I’d said in the first point is like, hey, is there something unique we can do for this niche or this small subset of niches?

00:30:40.743 –> 00:30:44.603
Atkinson: Because if you just say, hey, we do point of sale, everybody does point of sale.

00:30:44.603 –> 00:31:01.823
Atkinson: But if you do the best service, you know, software, hardware service platform for premium liquor stores and, you know, one or two other verticals, then there’s real opportunity for you to protect your margin and protect your growth and be that trusted provider in the area.

00:31:01.823 –> 00:31:05.043
Roddy: Yeah, I was looking on my bookshelf behind for the folks who are watching on YouTube.

00:31:05.043 –> 00:31:10.263
Roddy: I know I, when you recommended Nailing Your Niche last year, I bought it, I read it.

00:31:10.263 –> 00:31:13.683
Roddy: I’m not able to grab it off the bookshelf right now.

00:31:13.683 –> 00:31:14.743
Roddy: And I think, was that the one?

00:31:14.743 –> 00:31:25.183
Roddy: It doesn’t apply specifically like the retail ID, but it really is applicable when you read it and you realize how important it is to nail your niche, as you said.

00:31:25.183 –> 00:31:26.223
Atkinson: Yep.

00:31:26.223 –> 00:31:27.983
Atkinson: Yeah, it’s not a POS book.

00:31:27.983 –> 00:31:31.123
Atkinson: It’s just a, hey, be good at one thing, not try to be a generalist.

00:31:31.123 –> 00:31:34.243
Atkinson: And it’s more and more true for this group.

00:31:34.243 –> 00:31:39.043
Roddy: And so Dean, before I get your take, I do want to share those numbers that Will alluded to.

00:31:39.043 –> 00:31:45.703
Roddy: So we say in the report, over the next 12 months, which of these niche verticals do you plan to engage in or seriously investigate?

00:31:45.703 –> 00:31:48.783
Roddy: And like Will said, the top three are the same as last year.

00:31:48.783 –> 00:31:51.583
Roddy: Wine, beer, liquor, 44%, the runaway leader.

00:31:51.583 –> 00:31:54.203
Roddy: Ethnic grocery and restaurant, 32%, cannabis, 19%.

00:31:55.303 –> 00:31:59.343
Roddy: The next three niches all have made regular appearances.

00:31:59.343 –> 00:32:06.263
Roddy: Garden and nursery, hardware, and then entertainment slash recreation slash amusement park slash bowling slash golf.

00:32:06.883 –> 00:32:11.223
Roddy: And then also what popped up is we have never seen these reach double digits for the first time.

00:32:11.223 –> 00:32:21.063
Roddy: They all got between 12 and 14% health care and then medical offices slash hospitals slash senior living and then non-profit as well.

00:32:21.063 –> 00:32:22.443
Roddy: So that those are the numbers.

00:32:22.443 –> 00:32:23.903
Roddy: Dean, I want to get your take.

00:32:23.903 –> 00:32:30.863
Roddy: I might have a follow up question for both of you guys on these niches, but Dean, what is your take on seeing some of these niche numbers in the KPI study?

00:32:31.303 –> 00:32:38.683
Reverman: My take on here that you did call out in the survey is what I would quantify as MSP creep.

00:32:38.683 –> 00:32:43.483
Reverman: There are more and more MSPs coming into our traditional world.

00:32:43.483 –> 00:33:03.763
Reverman: It’s something that we’ve been seeing and we’ve actually been trying to embrace more and more MSPs because when we run a churn data analysis every year where we look at our customer base, and the trend is clear that there are just fewer and fewer vars, traditional vars in the world, period.

00:33:03.763 –> 00:33:05.683
Reverman: So how do you grow your business?

00:33:05.803 –> 00:33:07.103
Reverman: If everybody has to grow?

00:33:07.103 –> 00:33:10.783
Reverman: Well, one of the markets that we’ve been looking at are MSPs.

00:33:10.783 –> 00:33:23.463
Reverman: And when you think about it, and the reality is MSPs are creeping into a lot of our traditional, what I would say in this realm, a lot of the traditional retail, hospitality type of areas.

00:33:23.463 –> 00:33:34.403
Reverman: And when you look at those three call outs that you just did, healthcare, medical offices and non-profits, these are traditional gold mines for an MSP.

00:33:34.403 –> 00:33:43.863
Reverman: Again, when I think MSP, I’m thinking traditional server, cloud services, type of an entity, they’re doing IT support, those types of things.

00:33:43.863 –> 00:33:55.883
Reverman: But as more and more IT and OT, which is where we live, operational technologies, blur, there’s more crossing of those worlds, more blurring of the lines.

00:33:55.963 –> 00:33:59.963
Reverman: And so you’re starting to see MSPs get into point of sale.

00:33:59.963 –> 00:34:06.003
Reverman: They’re offering health care, emergency care, those types of things, payment types of solutions.

00:34:06.003 –> 00:34:12.403
Reverman: So I’m calling it MSP creep, that you are getting more and more of them creeping into our world.

00:34:12.403 –> 00:34:21.323
Reverman: And that’s really, again, indicated by this survey here, but really fascinating that those three came way up in the niche.

00:34:21.323 –> 00:34:24.543
Reverman: And so that was my call out is looking at the MSPs.

00:34:25.683 –> 00:34:26.823
Roddy: And thank you for calling that out.

00:34:26.823 –> 00:34:31.543
Roddy: I’ve never heard of called MSP creep before, but I’d say that is spot on and very accurate.

00:34:31.543 –> 00:34:47.503
Roddy: And for folks who might be more traditional in the POS world, which is the most of the RSPA members, there was a thing where it was say five, 10, 15 years ago, especially when you go back, these MSPs are used to working on laptops and desktops, right?

00:34:47.503 –> 00:34:48.923
Roddy: Like that’s what they work on.

00:34:48.923 –> 00:34:53.423
Roddy: Well, they looked at a POS all in one and they’re like, I don’t understand what in the world that thing is.

00:34:53.583 –> 00:34:54.743
Roddy: I don’t even want to touch it.

00:34:54.743 –> 00:34:55.703
Roddy: That was one thing.

00:34:55.703 –> 00:35:02.923
Roddy: But now that so many things are on tablets and they’re not as specialty, they’re able to, oh, I’m not intimidated by that technology.

00:35:02.923 –> 00:35:10.843
Roddy: The other thing is before, because you had to drive in because everything wasn’t on the network, I’ll never forget going to, do you guys remember Zenith Info Tech?

00:35:10.843 –> 00:35:15.903
Roddy: They had a really high up ride and then a big crash down.

00:35:15.903 –> 00:35:19.983
Roddy: Google them, you’ll find some fascinating stories about them.

00:35:19.983 –> 00:35:26.903
Roddy: I remember being at one of their conferences and saying, how come you don’t get into retail and restaurant especially?

00:35:26.943 –> 00:35:30.043
Roddy: I remember they just said to me, I like to go home at five o’clock.

00:35:30.043 –> 00:35:32.403
Roddy: I don’t have to drive into a bar at two a.m.

00:35:32.403 –> 00:35:39.643
Roddy: But now because so many things are on the network, those things can be handled remotely if it does have to happen after hours.

00:35:40.243 –> 00:35:48.023
Roddy: Because of all the managed services tools that they have now, they can keep things up and running and identify them before there is a failure point in there.

00:35:48.023 –> 00:35:50.063
Roddy: So it’s a different world now.

00:35:50.303 –> 00:35:52.243
Roddy: It’s not like snap your finger is different.

00:35:52.243 –> 00:35:57.703
Roddy: But to your point, Dean, it’s been creeping in and the lines are blurred now.

00:35:57.703 –> 00:35:59.023
Reverman: Yeah, for sure.

00:35:59.263 –> 00:36:01.803
Reverman: And we just have to be cognizant of it, right?

00:36:01.803 –> 00:36:05.103
Reverman: Those folks are offering services that are more aligned with us.

00:36:05.103 –> 00:36:14.483
Reverman: And also conversely, that’s why you see a lot of, I think, traditional resellers, hybrids getting into such things as cybersecurity or the aforementioned data plans, right?

00:36:14.483 –> 00:36:18.303
Reverman: Starting to get into the data part, just offering more services.

00:36:18.423 –> 00:36:24.663
Reverman: You really, really need to start thinking that way because your competition maybe isn’t the traditional folks that you thought.

00:36:24.663 –> 00:36:25.663
Reverman: It’s your competition.

00:36:25.663 –> 00:36:36.083
Reverman: There are folks that are coming from the IT world and they have a lot, their skill sets are a lot different, but applicable to a lot of the things as you just illustrated for sure.

00:36:36.083 –> 00:36:41.123
Roddy: Will, can you talk before we take a commercial break, can you talk about MSP creep, I guess, from two areas?

00:36:42.143 –> 00:36:47.743
Roddy: You, as POS Nation, adding more managed services to what you offer.

00:36:48.143 –> 00:36:55.003
Roddy: And then also, seeing MSPs from a competition standpoint, are you running into that at all, if you can talk about those two points, if you’re willing?

00:36:55.003 –> 00:36:55.443
Atkinson: Sure, yeah.

00:36:55.443 –> 00:37:00.023
Atkinson: I mean, adding MSP style services, like a simple example, would be Cloud Backup.

00:37:00.683 –> 00:37:05.303
Atkinson: And even if you’re selling cloud software, there’s still other things people need to backup.

00:37:05.303 –> 00:37:17.183
Atkinson: And if they’re relying on their thumb drive or local backup or on the network, or we still have customers that call in once in a while with their zip drive and wondering where they buy more zip disks, and you shake your head and point to the future.

00:37:17.183 –> 00:37:22.743
Atkinson: But you can bolt on a Cloud Backup utility very simply and charge 20 bucks a month for that.

00:37:22.743 –> 00:37:24.263
Atkinson: It’s just an easy thing to do.

00:37:24.263 –> 00:37:26.003
Atkinson: And then that’s peace of mind for the merchant.

00:37:26.003 –> 00:37:46.363
Atkinson: Dean called out cybersecurity, I think helping merchants find security platforms, whether you sell it or just insist that they do it, because that’s always a bad day when the merchant calls in to the service provider, hopefully not you, but it always is, hey, our computer crashed and we can’t access anything and we’re down and it’s five o’clock on Friday and you need to help us with that.

00:37:46.363 –> 00:37:52.743
Atkinson: Well, if it’s malware because they don’t have any security things in place, then that’s a really bad day.

00:37:52.743 –> 00:38:01.263
Atkinson: But if it’s just a crash and you have a cloud backup, you can drive a new computer out there real quick and download things from the cloud and they’re back up and you’re the hero.

00:38:01.743 –> 00:38:02.583
Atkinson: So simple thing there.

00:38:02.583 –> 00:38:06.743
Atkinson: From a creep standpoint, I would say that this hopefully resonates with everybody here.

00:38:06.743 –> 00:38:11.523
Atkinson: The day the local IT guy gets involved is a bad day for your conversation with the customer.

00:38:11.523 –> 00:38:22.103
Atkinson: They always want to take it off the rails and say, oh, you’ve got to do these six other things that are really painful and we don’t know about that and we can’t give them access to this and we’ve got to lock down the firewall and it makes it harder.

00:38:22.103 –> 00:38:24.203
Atkinson: So that’s the reality.

00:38:24.203 –> 00:38:38.383
Atkinson: So you’re offering some of those things, or at least having that conversation with the merchant as part of your, here’s what we’re going to do discussion, then you can offset some of that pain that comes from that encroachment.

00:38:39.883 –> 00:38:40.383
Roddy: Well said.

00:38:40.383 –> 00:38:40.923
Roddy: Well said.

00:38:40.923 –> 00:38:46.583
Roddy: Again, we always talk about on this, and we might talk about partnerships if we have time.

00:38:46.583 –> 00:38:55.043
Roddy: But lean on your vendors, lean on your distributors, lean on other VARs, lean on MSPs, that you can go together.

00:38:55.043 –> 00:38:57.703
Roddy: You do not have to add everything to your expertise.

00:38:58.023 –> 00:39:05.603
Roddy: You can act more like the general contractor than you have to be turning the screwdriver on every single one of these products or services.

00:39:05.603 –> 00:39:11.403
Roddy: We’re going to take a quick pause here and let our listeners and viewers know about the Retail Solutions Providers Association.

00:39:11.403 –> 00:39:19.043
Roddy: The RSPA is North America’s largest community of retail technology VARs, software providers, MSPs, vendors, and distributors.

00:39:19.043 –> 00:39:26.363
Roddy: Members benefit from RSPA White Glove Service, which is provided by the member services team of Peggy Fry, Nicole Green, and Katina Bell.

00:39:26.863 –> 00:39:32.623
Roddy: Instead of leaving you on your own, to navigate our growing list of member companies, we’re now close to 750.

00:39:32.623 –> 00:39:39.183
Roddy: Peggy, Nicole, and Katina will make warm one-on-one introductions on your behalf to fellow members who can accelerate your success.

00:39:39.183 –> 00:39:42.403
Roddy: To learn more, email membership at gorspa.org.

00:39:43.683 –> 00:39:46.383
Roddy: Interesting, we were talking about partnerships right before.

00:39:46.383 –> 00:39:48.943
Roddy: I’m talking about how the RSPA helps with partnerships.

00:39:48.943 –> 00:39:52.743
Roddy: This podcast is going almost too well in the first 40 minutes that we have.

00:39:53.563 –> 00:39:57.103
Roddy: I’m actually getting nervous for what’s going to happen in the next 15 or so.

00:39:57.203 –> 00:39:58.563
Roddy: That’s the pessimist in me.

00:39:58.563 –> 00:40:00.963
Roddy: All right, back to our commercial.

00:40:00.963 –> 00:40:04.143
Roddy: Also, we want to thank these companies who support the RSPA community.

00:40:04.143 –> 00:40:14.123
Roddy: To make this podcast and video series possible, our gold sponsors are Cocard, Epson, Heartland, and ScanSource, and our platinum sponsor is BlueStar.

00:40:14.123 –> 00:40:17.383
Roddy: Dean, thank you and your team for your support.

00:40:17.383 –> 00:40:22.083
Roddy: Finally, want to make sure you let know that registration is now open for RetailNow 2025.

00:40:22.663 –> 00:40:26.683
Roddy: The Retail IT Channel’s number one trade show education conference and networking event.

00:40:26.683 –> 00:40:31.743
Roddy: This year’s event is set for July 27th through 29th at Caesars Palace in Las Vegas.

00:40:31.743 –> 00:40:36.423
Roddy: For more information, visit gorsp.org, forward slash retail now.

00:40:36.423 –> 00:40:39.883
Roddy: RetailNow is where the industry meets.

00:40:40.903 –> 00:40:47.083
Roddy: A few other data points in the KPI study jumped out to me, and I want to get both your opinions on this.

00:40:47.083 –> 00:40:52.523
Roddy: We start the report highlighting revenue per employee, and specifically what it says in the report.

00:40:52.523 –> 00:41:01.003
Roddy: The number of solution providers achieving at least $200,000 in revenue per employee was 38.1 percent in 2024.

00:41:01.003 –> 00:41:07.603
Roddy: That’s a 5.6 percent improvement year over year, and an 11.8 point improvement across two years.

00:41:07.603 –> 00:41:10.623
Roddy: It was 26.3 percent in 2022.

00:41:10.623 –> 00:41:13.603
Roddy: Five of the last six years, we’ve seen that number increase.

00:41:13.703 –> 00:41:15.203
Roddy: That is a trend.

00:41:15.203 –> 00:41:17.963
Roddy: One might not be a trend, but you get five out of six, it definitely is.

00:41:18.663 –> 00:41:21.483
Roddy: So those are the undeniable numbers that we have from the report.

00:41:21.483 –> 00:41:27.203
Roddy: Now, I want to see if you guys agree with this analysis, and Dean, if you want to go first and then Will.

00:41:27.203 –> 00:41:31.843
Roddy: This is a sign of improving health among the retail IT channels VARS and ISVs.

00:41:31.843 –> 00:41:40.923
Roddy: Despite the ever-increasing presence of margin obliterating, VC-backed, 800-number, one-size-fits-all POS providers who don’t have a channel.

00:41:40.923 –> 00:41:44.463
Roddy: Most solution providers have built hardy, growing businesses.

00:41:44.463 –> 00:41:55.823
Roddy: Today’s VARS and ISVs offering winning combination of high-margin products and services, personalized customer care, and internal efficiency, which leads to solid profits.

00:41:55.823 –> 00:42:01.583
Roddy: Dean, do you agree with that analysis, partially agree, or do you think it’s a bunch of hogwash?

00:42:01.583 –> 00:42:02.883
Reverman: I don’t think it’s a bunch of hogwash.

00:42:02.883 –> 00:42:04.323
Reverman: I absolutely agree.

00:42:04.323 –> 00:42:10.023
Reverman: I mean, when you look at the trend of revenue per employee, those are strong figures.

00:42:10.463 –> 00:42:16.683
Reverman: It means that the resellers are getting a significant amount, obviously, of revenue per person that they have in there.

00:42:16.783 –> 00:42:18.123
Reverman: I still think there’s room.

00:42:18.123 –> 00:42:19.663
Reverman: There’s room for growth there.

00:42:19.663 –> 00:42:30.863
Reverman: As we become more efficient, as you start adding in things like AI, which again was on the list of recurring revenue items that you could start deploying, there are some things out there.

00:42:30.863 –> 00:42:33.583
Reverman: I think Will’s point is really valid.

00:42:33.583 –> 00:42:35.383
Reverman: Ask what your technicians are getting into.

00:42:35.383 –> 00:42:39.403
Reverman: They might start diving into, dipping their toe into AI agents, right?

00:42:39.603 –> 00:42:43.483
Reverman: That’s the phrase that’s getting a lot of run right now, but for good reason.

00:42:43.483 –> 00:42:53.923
Reverman: Because when you think about the integration of LLMs and AI agents, there’s a lot that can be done there, and maybe some opportunities to create even more revenue per employee.

00:42:53.923 –> 00:43:03.683
Reverman: So I’ll double up with this, is that I think also in the survey, and I don’t know the exact numbers, Jim, but I think our industry is really, really strong in retention.

00:43:04.383 –> 00:43:08.503
Reverman: We are very good at retaining employees for a long time, right?

00:43:08.503 –> 00:43:11.123
Reverman: And that’s a healthy signal as well.

00:43:11.123 –> 00:43:17.003
Reverman: When you have employees that have been in your company for a long time, you can garner more revenue per employee.

00:43:17.003 –> 00:43:19.443
Reverman: You can look for ways of expanding your business.

00:43:19.443 –> 00:43:21.163
Reverman: So I don’t think it’s hogwash at all.

00:43:21.163 –> 00:43:25.543
Reverman: Seems like it’s pretty accurate to what I know of the channel.

00:43:25.543 –> 00:43:25.803
Roddy: Great.

00:43:25.803 –> 00:43:29.643
Roddy: And Will, before I get your take on it, I’m going to try to find them scrolling through.

00:43:29.643 –> 00:43:34.203
Roddy: It’s towards the end of the report about the retention.

00:43:34.203 –> 00:43:39.143
Roddy: I can’t find it right now because it’s part of 8,000 words in there.

00:43:39.143 –> 00:43:50.403
Roddy: But the vast majority of our members who took the survey, most of them have below 10% turnover, which is way better than what you find in the general world.

00:43:50.403 –> 00:43:55.523
Reverman: It’s 76% experienced turnover of 5% or less.

00:43:55.523 –> 00:43:56.903
Reverman: That’s phenomenal.

00:43:56.903 –> 00:43:59.083
Reverman: That’s great.

00:43:59.083 –> 00:44:00.983
Reverman: So pretty strong, pretty strong.

00:44:00.983 –> 00:44:01.223
Roddy: Yes.

00:44:01.223 –> 00:44:03.543
Roddy: So build upon those folks, that’s for sure.

00:44:03.543 –> 00:44:10.703
Roddy: So Will, your take on that analysis in terms of, we’ve got some hardy vars and ISVs out there.

00:44:12.343 –> 00:44:14.703
Atkinson: Yeah, I’ve joked for a long time that nobody ever leaves point of sale.

00:44:14.703 –> 00:44:16.583
Atkinson: You can switch companies, but you never get out.

00:44:16.583 –> 00:44:18.643
Atkinson: So, that’s true.

00:44:20.683 –> 00:44:24.043
Atkinson: I think Dean’s point about AI is one of those things, and we’re certainly expanding on it this year.

00:44:24.043 –> 00:44:31.883
Atkinson: But it’s a good example of what I said before, talking to your technicians and your service-related people and saying, what are you interested in?

00:44:31.883 –> 00:44:34.223
Atkinson: I guarantee you they’re fiddling with something on their own.

00:44:34.223 –> 00:44:35.543
Atkinson: I get that request once a week.

00:44:35.543 –> 00:44:39.223
Atkinson: Hey, I’m trying this out in ChatGPT or whichever AI.

00:44:39.463 –> 00:44:41.183
Atkinson: Can we try this?

00:44:41.183 –> 00:44:48.523
Atkinson: So we’ve had to have that overall discussion like, hey, it’s great that everybody’s trying things, but let’s at least pick a platform.

00:44:48.523 –> 00:44:54.743
Atkinson: Everybody do your whiteboard your Skunk Works idea, and then let’s bring it to the stakeholder.

00:44:55.303 –> 00:44:58.763
Atkinson: We’ve had to designate like an AI chair person.

00:44:58.763 –> 00:45:01.083
Atkinson: But there’s other things like that going on.

00:45:01.123 –> 00:45:07.663
Atkinson: People like to mention Web Services is the big one that I think a lot of small retailers, restaurateurs and VARs aren’t very good at.

00:45:07.663 –> 00:45:18.043
Atkinson: So how do we, if I’m a small restaurateur or retailer, and I want to do more with my website, I’m watching the Super Bowl and seeing the Shopify ad, and I just go click on Shopify.

00:45:18.043 –> 00:45:18.883
Atkinson: We don’t want to do that.

00:45:18.883 –> 00:45:22.243
Atkinson: We want to be that trusted advisor, say, hey, we can help you with that.

00:45:22.243 –> 00:45:26.363
Atkinson: We’re going to do a little bit of services to help you add some of those things.

00:45:26.363 –> 00:45:27.803
Atkinson: And that’s revenue expansion.

00:45:27.803 –> 00:45:32.503
Atkinson: If we’re just purely project based, it’s X dollars per install, and that’s it.

00:45:32.503 –> 00:45:44.803
Atkinson: But if we turn on a monthly web service, and a monthly AI service, and credit card processing, all these things, it’s just driving that incremental revenue per customer, which ends up being per employee.

00:45:44.803 –> 00:45:47.023
Atkinson: And it’s ultimately making people more efficient.

00:45:47.023 –> 00:45:53.503
Atkinson: If the only way we make sending a guy with a truck to go do a thing, we’re never going to be truly healthy from a revenue standpoint.

00:45:53.503 –> 00:45:55.223
Reverman: Yeah.

00:45:55.223 –> 00:45:55.463
Atkinson: Great.

00:45:55.463 –> 00:45:56.143
Roddy: Thank you for that, Will.

00:45:56.143 –> 00:46:02.623
Roddy: And I think you might have answered my next question, but I’ll ask it anyway because I’d love to dive deeper with you and Dean on this.

00:46:02.623 –> 00:46:09.703
Roddy: So like the RSPA’s focus that we had on our Inspire Leadership Conference that we just had in late January, early this year.

00:46:09.703 –> 00:46:14.003
Roddy: And it’s really the focus for 2025 and we don’t quite know how long.

00:46:14.003 –> 00:46:24.243
Roddy: It’s helping VARS and ISVs better compete against, we said the phrase before, margin obliterating VC-backed 800 number one size fits all POS providers who don’t have a channel.

00:46:24.243 –> 00:46:30.223
Roddy: And so in the comment section at the end of the study, that really dominated what solution providers see as the number one threat to their business.

00:46:30.223 –> 00:46:33.883
Roddy: So I guess, Will, do you share that sentiment?

00:46:33.883 –> 00:46:36.223
Roddy: And then what is POS Nation doing?

00:46:36.223 –> 00:46:41.623
Roddy: What are other VARS doing to improve their organizations to compete against them?

00:46:41.623 –> 00:46:45.963
Roddy: You talked about adding a lot of services and providing more of a unique value proposition.

00:46:45.963 –> 00:46:49.263
Roddy: So I guess, what is your answer to that question, if you can expand upon that?

00:46:49.323 –> 00:46:49.783
Atkinson: Sure.

00:46:49.783 –> 00:46:56.863
Atkinson: I mean, I think the exposure to those 800 number VC backed firms is real.

00:46:57.643 –> 00:47:01.543
Atkinson: I don’t think every merchant and every restaurant is going to go switch to one of those.

00:47:01.543 –> 00:47:07.723
Atkinson: It’s not 100% risk, but we can certainly hedge our bets and be, like I said earlier, niche-ier.

00:47:07.723 –> 00:47:15.443
Atkinson: I just think the more you say, hey, we just kind of do point of sale, the more you’re at risk to losing a significant book of your business to the generic providers.

00:47:15.443 –> 00:47:24.883
Atkinson: And so with our business, we made that decision right at the beginning of 2020, and it was pure luck that COVID helped us out with that, knock on wood, and we hate to profit from all the pain of COVID.

00:47:24.883 –> 00:47:31.803
Atkinson: But we had said in January 2020, we are gonna stop doing a lot of the miscellaneous that POS Nation had done as Avar.

00:47:31.803 –> 00:47:34.383
Atkinson: It really had been all things to all people.

00:47:34.383 –> 00:47:36.463
Atkinson: We had like nine software platforms we sold.

00:47:37.403 –> 00:47:55.803
Atkinson: POS Nation buying CAP was to become a more streamlined ISV and focus on some niche verticals, and we had chosen liquor, grocery and convenience, and in that ethnic grocery more particularly as our go-forward markets, and then March comes along, and those are the only three things that are allowed to stay open, so it worked out for us.

00:47:55.803 –> 00:48:24.583
Atkinson: But not saying those are the only verticals, but and certainly hope we don’t have another COVID moment come along where the government chooses for us which are the winners, but the point is valid, that if you’re good at a certain thing, you can go after those, and if I’m a merchant and I’m looking at, okay, any of your big 800 number players are, they do most things, but if there’s some vertical specific feature sets and services that those guys don’t do, you’re going to win a lot more business.

00:48:24.603 –> 00:48:25.563
Atkinson: You’re still going to lose some.

00:48:25.563 –> 00:48:30.783
Atkinson: There’s a lot of uneducated buyers out there that are just going to go, well, that’s cheap, but whatever, I’ll take it.

00:48:30.783 –> 00:48:32.023
Atkinson: But then those are opportunities.

00:48:32.023 –> 00:48:38.603
Atkinson: You lose a deal to one of the big guys that’s generic today, call them in six months, ask them how it’s going.

00:48:38.603 –> 00:48:40.083
Atkinson: Is it really serving their needs?

00:48:40.863 –> 00:48:50.823
Atkinson: We get a lot of business like that, where we lose the initial deal, and then they find out for six, nine months in that it’s really not serving their needs and they’re willing to switch.

00:48:50.823 –> 00:48:58.323
Atkinson: I think one thing that jumped out at me from that threats section is A, that the nitrification is a real way to address that.

00:48:58.323 –> 00:49:05.103
Atkinson: But also the pricing, people have consistently said, oh, it’s super cheap, it’s super cheap, it’s super cheap, and I’m not sure that’s really true anymore.

00:49:06.583 –> 00:49:12.163
Atkinson: It’s true to an extent, and they do pushes into certain verticals and say, we’ll just grab market share by giving away the hardware.

00:49:12.163 –> 00:49:18.623
Atkinson: But I’ve seen proposals and they’re somewhat in line with normal standard pricing.

00:49:18.623 –> 00:49:23.263
Atkinson: So don’t be daunted by that idea that you’re always going to lose these deals on price.

00:49:23.263 –> 00:49:30.903
Atkinson: Go in with a solid service stack, go in with that unique offering and stick to your pricing and probably win some deals.

00:49:31.583 –> 00:49:32.103
Roddy: Well said.

00:49:32.603 –> 00:49:36.743
Roddy: Pick a vertical niche and double down on what you do special.

00:49:36.743 –> 00:49:43.683
Roddy: Dean, what have you seen successful solution providers do to compete with the number of guys and what do you want to build on what Will just said?

00:49:43.683 –> 00:49:49.843
Reverman: Well, don’t do one of the other headlines that you had highlighted here, which really again pained me.

00:49:49.843 –> 00:49:52.923
Reverman: Some bars have thrown in the towel on marketing.

00:49:52.923 –> 00:49:53.983
Reverman: Don’t not market.

00:49:55.423 –> 00:50:02.923
Reverman: So, 71% or 7.1% of solution providers say in 2024, they didn’t spend anything on marketing.

00:50:02.923 –> 00:50:07.443
Reverman: What you don’t want to do is put your head in the sand and say, well, I can’t compete against those folks.

00:50:07.443 –> 00:50:09.203
Reverman: You don’t have to compete with them on Google.

00:50:09.203 –> 00:50:14.543
Reverman: You don’t have to try to outbid them on your ads there, but you can certainly compete with them, number one.

00:50:14.543 –> 00:50:17.023
Reverman: Number two, you have to get your message out.

00:50:17.223 –> 00:50:18.043
Reverman: It’s okay.

00:50:18.043 –> 00:50:19.483
Reverman: Go ahead and compete.

00:50:19.483 –> 00:50:19.963
Reverman: Why?

00:50:19.963 –> 00:50:21.883
Reverman: Because people buy from people.

00:50:22.303 –> 00:50:24.683
Reverman: I think Will’s advice is dead on.

00:50:25.183 –> 00:50:29.243
Reverman: If they go with somebody else initially, call them back in two to three months.

00:50:29.243 –> 00:50:30.303
Reverman: See how it is going.

00:50:30.303 –> 00:50:30.663
Reverman: Why?

00:50:30.663 –> 00:50:32.723
Reverman: Because people buy from people.

00:50:32.723 –> 00:50:43.603
Reverman: If you show a genuine care, an interest in what they are doing, and you believe that your differentiation is of value to them, you’ll eventually win that deal.

00:50:43.603 –> 00:50:50.463
Reverman: Again, just don’t stick your head in the sand and say, like 7.1 percent of them are doing and say, well, I’m not even going to go out there and market.

00:50:50.463 –> 00:50:51.603
Reverman: You have to market yourself.

00:50:54.143 –> 00:51:03.083
Reverman: With AI and things like that, there’s more efficient ways to get your brand out there through less and lower and lower expensive ways.

00:51:03.083 –> 00:51:08.943
Reverman: Facebook, for example, or just good old traditional printing of a card and mailing it to prospects.

00:51:08.943 –> 00:51:10.683
Reverman: Believe it or not, that still works.

00:51:10.863 –> 00:51:16.723
Reverman: We implemented quite a few of those last year that had a lot of success behind them.

00:51:16.723 –> 00:51:18.183
Reverman: There’s ways to do that.

00:51:18.183 –> 00:51:24.563
Reverman: I would advocate that you keep your head above the sand, go out there and be a proponent, people buy from people.

00:51:24.563 –> 00:51:28.263
Roddy: Yeah, it reminds me of the old baseball aphorism, hit it where they ain’t.

00:51:28.563 –> 00:51:37.403
Roddy: Like you said, don’t go toe-to-toe with them on Google, but if you can exhibit at local events and attend local events, I know there’s an RSPA member, Varn, Iowa.

00:51:37.403 –> 00:51:45.843
Roddy: They have somebody and that’s a lot of what they do, where they are elbow to elbow with the community because they know the 800 number of guys are not going to be there.

00:51:45.843 –> 00:51:46.343
Reverman: Yeah.

00:51:46.343 –> 00:51:47.683
Reverman: Get your sales reps out there too.

00:51:48.763 –> 00:51:49.223
Reverman: Exactly.

00:51:49.223 –> 00:51:51.683
Reverman: Rub elbows with the community, you’ll win.

00:51:51.683 –> 00:51:52.023
Roddy: All right.

00:51:52.023 –> 00:51:55.323
Roddy: Last data point before we end up with time.

00:51:55.503 –> 00:51:58.283
Roddy: It says in the survey, this is about company size.

00:51:58.283 –> 00:52:04.583
Roddy: Last year, a third of survey respondents, so 33.8 percent, reported fewer than five full-time employees.

00:52:04.583 –> 00:52:08.023
Roddy: But this year, that dropped to only one-fifth of respondents.

00:52:08.023 –> 00:52:14.903
Roddy: Then also anecdotally, RSPA has seen an increase in smaller VARs and software providers among our membership base.

00:52:14.903 –> 00:52:18.443
Roddy: They’re either being acquired or they’re merging with other solution providers.

00:52:18.443 –> 00:52:22.863
Roddy: Will, I want to take this first since you went through merger and acquisition not so long ago.

00:52:22.863 –> 00:52:35.403
Roddy: The question that we asked in the report that I’ll post to you now, do you think the smallest of small VARs, not all of them, are fading away due to the ever-increasing complexity of the retail IT channel and its challenges?

00:52:35.403 –> 00:52:46.283
Roddy: Again, I’m not saying all of them, but it seems like a lot of those less sophisticated guys who don’t have that next-gen leadership are just like, yeah, I’m not going to revamp my business at this point in my career.

00:52:46.443 –> 00:52:47.483
Roddy: Will, what’s your take on that?

00:52:47.483 –> 00:52:49.543
Roddy: Then Dean, we’ll give you the final word.

00:52:49.543 –> 00:52:50.443
Atkinson: Yeah.

00:52:50.443 –> 00:52:54.103
Atkinson: Scale is a problem and desire is a problem.

00:52:54.363 –> 00:52:55.603
Atkinson: We’ve talked about this over the years.

00:52:55.603 –> 00:53:06.783
Atkinson: If you’re that small shop that’s a family business and the proprietor owner operator is reaching retirement age and there’s nobody to take it over, you’re probably just going to close your doors or say, oh yeah, we’re going to get acquired.

00:53:07.023 –> 00:53:10.103
Atkinson: Well, you might get acquired, you might not.

00:53:10.103 –> 00:53:11.803
Atkinson: You probably won’t.

00:53:11.803 –> 00:53:13.103
Atkinson: The revenue is not there.

00:53:13.103 –> 00:53:18.363
Atkinson: There’s no compelling reason and that’s the myth is that if you want to sell your business, there’s somebody just waiting to buy it.

00:53:18.363 –> 00:53:26.923
Atkinson: It has to be a compelling proposition because I’m not going to, as a buyer, come along and say, look, I’ll overpay you what you think your baby is worth.

00:53:26.923 –> 00:53:29.763
Atkinson: I’ll just wait for you to go a business and go sell something into that market.

00:53:30.103 –> 00:53:31.543
Atkinson: It’s a lot cheaper to do that.

00:53:31.543 –> 00:53:47.483
Atkinson: So I think from an acquisition standpoint, having a plan, like why do we want to sell and who is a good fit for us, and be tailoring your business over a couple of years to that, start those conversations, but don’t just put acquisition as a plan without doing any planning around it.

00:53:47.483 –> 00:53:58.823
Atkinson: But to your point about the truly small, two, three, four people, it is hard to diversify and it’s hard to do all of these things we talked about and it’s not going to get any easier, but I would argue that it’s always been hard.

00:53:58.823 –> 00:54:04.803
Atkinson: If you look back 20 years ago, there were very few of our top line, high success story bars that were three people.

00:54:04.803 –> 00:54:07.763
Atkinson: So none of that’s net new.

00:54:07.763 –> 00:54:14.283
Atkinson: I think a lot of Dean’s comments point at the idea that we can do these things differently than we would have in the past.

00:54:14.543 –> 00:54:22.463
Atkinson: If it’s that one-to-one relationship, if three people times the amount of work we do is the revenue we make, then you’re never going to get there.

00:54:22.463 –> 00:54:31.003
Atkinson: But if we can layer on AI as a good example, it’s not replacing employees and putting people out of work, it’s letting us do more with what we’ve got and some of these other tools.

00:54:31.003 –> 00:54:38.203
Atkinson: So starting now, if you haven’t already started, is the only way to avoid starting later.

00:54:38.203 –> 00:54:38.663
Roddy: Yes.

00:54:38.663 –> 00:54:41.363
Atkinson: It’s perfectly obvious, but you just have to get started.

00:54:41.363 –> 00:54:46.543
Atkinson: You have to address it instead of just shrugging and going, yeah, put your head in the sand and say, well, we’re too small, we can’t do it.

00:54:46.543 –> 00:54:48.223
Atkinson: You’ll be right.

00:54:48.223 –> 00:54:48.543
Roddy: Yeah.

00:54:48.543 –> 00:54:50.343
Roddy: I’m going to start quoting you Will on this.

00:54:50.343 –> 00:54:52.863
Roddy: It’s always been hard for anybody who says this is too hard.

00:54:52.863 –> 00:54:54.303
Roddy: It’s always been hard.

00:54:54.303 –> 00:55:01.803
Roddy: Dean, final word on size of folks we saw participating in the survey, feature the small var from your perspective.

00:55:03.843 –> 00:55:05.483
Roddy: Oh, you’re on mute, Dean.

00:55:07.323 –> 00:55:11.103
Reverman: Sorry about that because I had a bird attacking one of my windows, so I was on mute for just a second.

00:55:11.923 –> 00:55:13.183
Reverman: Tis the season, I guess, right?

00:55:13.183 –> 00:55:14.283
Reverman: Spring’s in the air.

00:55:14.283 –> 00:55:20.123
Reverman: But I was looking at one of the other studies that we conduct internally, and unfortunately, what you’re saying is true.

00:55:20.123 –> 00:55:24.643
Reverman: We are seeing an erosion on the SMB marketplace.

00:55:25.043 –> 00:55:37.463
Reverman: We tier our customers and when you look at it, we’re seeing the most erosion in what we call the tier 5, which are folks that purchase less than $500,000 a year from us, and again, to us, that’s the SMB.

00:55:37.463 –> 00:55:43.223
Reverman: Even though there’s a significant amount of erosion, there are still a significant amount of people there.

00:55:43.343 –> 00:55:51.843
Reverman: There are over 3,000 companies just in the US alone that buy from us every single year that fit that demographic that I just gave you.

00:55:51.923 –> 00:55:54.703
Reverman: There’s a lot of folks out there and there’s still a lot of opportunity.

00:55:54.703 –> 00:55:59.123
Reverman: Consolidation happens, it continues to happen in the industry.

00:55:59.123 –> 00:56:07.483
Reverman: We’re seeing that mostly in the higher tiers, but as the SMB is a road, where is that business being absorbed?

00:56:07.483 –> 00:56:10.163
Reverman: Well, it’s being absorbed in some of the larger players.

00:56:10.283 –> 00:56:12.983
Reverman: Finally, I think Will is hitting it on the head there.

00:56:12.983 –> 00:56:31.323
Reverman: I think resellers today to be successful in the SMB marketplace, it’s not just the one, two, three-person shop as your survey indicates, you really need five to 10 people with a variety of different skill sets in order to execute those types of business outcomes that these folks are looking for.

00:56:31.463 –> 00:56:37.283
Reverman: And again, that’s kind of expanding your universe into new ways and new services that you might offer.

00:56:37.283 –> 00:56:40.303
Reverman: So the trends are there if you ask me.

00:56:40.303 –> 00:56:40.743
Roddy: Excellent.

00:56:40.743 –> 00:56:41.863
Roddy: Great insights, gentlemen.

00:56:41.863 –> 00:56:44.843
Roddy: That does it for this episode of The Trusted Advisor.

00:56:44.843 –> 00:56:46.343
Roddy: We hope you enjoyed our discussion.

00:56:46.343 –> 00:56:52.463
Roddy: If you did, be sure to subscribe to the RSPA YouTube channel and The Trusted Advisor podcast so you never miss an episode.

00:56:52.463 –> 00:57:02.543
Roddy: And if you’d like to learn more best practices for VARs and ISVs in the retail technology industry, check out the RSPA blog, you can find it at gorspa.org and then clicking on RSPA blog.

00:57:02.543 –> 00:57:13.283
Roddy: And as we said earlier, the RSPA website is also where you can secure your own copy of the 2025 RSPA Retail IT Channel KPI study on our industry reports section.

00:57:13.283 –> 00:57:19.383
Roddy: Before we go, big thanks again to Dean Reverman and Will Atkinson for sharing their wisdom with us today.

00:57:19.383 –> 00:57:24.823
Roddy: Thanks also to RSPA Marketing Director, Chris Arnold for his production work, Joseph McDade for our music.

00:57:24.823 –> 00:57:27.343
Roddy: And last but not least, thanks so much to you for listening.

00:57:27.783 –> 00:57:34.323
Roddy: Our goal at the RSPA is to accelerate the success of our members in the retail technology ecosystem by providing knowledge and connections.

00:57:34.323 –> 00:57:38.183
Roddy: For more information, please visit our website at gorspa.org.

00:57:38.183 –> 00:57:41.523
Roddy: Thanks for listening and goodbye everybody.