The Doyle Report: Specialty Partners Are Fueling the Growth of Vertical Software Vendors

When he joined Intacct in July of 2010, then Channel Sales Vice President Taylor Macdonald had trouble finding traditional technology consulting companies willing to build business practices around Intacct’s fast-growing line of accounting and ERP solutions. Frustrated, Macdonald found himself with entire territories without a single partner. His company’s technology wasn’t the problem, but the attitude of some channel partners instead.

Some traditional IT channel consultancies told Macdonald they weren’t interested in retraining their people to sell vertical market software. Others said they didn’t see the need for new investments because their storage and networking sales were growing so strongly. Still more said they didn’t believe cloud computing would ever capture their customers’ imaginations.

Fast forward to 2017. Product margins are in decline. Cloud sales are on the rise. And Macdonald is now a senior vice president. His success is not due to the traditional partners that he persuaded to sign up with his employer so much as the unconventional ones he convinced instead. Think accounting firms, management consultants and more.

“What we figured out was that if we were to continue to grow at 40-45 percent per year, we had to find another way,” said Macdonald recently. Knowing that a channel was his best option for creating scalable growth, Macdonald began recruiting new and different partners to sell Intacct’s solutions. He calls them specialized partners.

^{Taylor Macdonald, SVP Channels, Intacct}

Many experts have examined the rise of these partners. This includes The 2112 Group, which published a report entitled, “Understanding & Leveraging Specialized Channels,” in November 2016, and Baptie & Co., which hosted an industry event in November 2016 entitled, “Specialized Channel Focus.” Software vendors including JazzHR have also embraced these kinds of partners and, like Intacct, have pursued them in earnest.

When inspiration struck, Macdonald shifted his focus from MSPs and VARs to financial service professionals who had existing ties to clients. Think CPAs, industry consultants and more. While some had dabbled in technology sales before, many had drifted out of the business because they couldn’t get their arms around the rhythms and cycles unique to IT solutions.

Intacct stepped up and said, “let us help you.” It provided training, product roadmaps and more. The results speak for themselves.

Today six of the company’s top 10 sales partners are Certified Public Accountants (CPAs). And Intacct’s sales continue to grow.

“These companies couldn’t spell ‘VAR’ if you spotted them the ‘V’ and the ‘R’,” says Macdonald. But they proved themselves up to the task just the same.

Take AcctTwo Shared Services of Houston. When Macdonald met the company in 2011, it was a four-person financial consultancy focused on mid-sized companies. AcctTwo knew next to nothing about reselling and integrating technology. Since then? The company has grown into a three-time Intacct partner of the year with more than 55 employees.

“If this story didn’t exist, we would literally have to lie and make it up,” says Macdonald.

Building on that, Intacct is now recruiting more mid-sized accounting firms. Among other things, he’s looking for companies with long-standing ties to customers, marketing resources and a culture of learning and risk-taking.

In all, Macdonald says he’s looking to sign up as many as 40 new partners per year to add to its existing partner base of 90. In time, its channel could help lift Intacct into the upper echelons of accounting and ERP software.

What draws third-parties to Intacct is the company’s compelling value proposition, Macdonald says. “Intacct offers industry-leading product, a great partnering culture, and the opportunity to make a fortune,” he adds.

Not every company, he notes, succeeds as an Intacct partner. As many as 60 have left the company’s partner program. Some never get connected with the software. Others fail to invest in training. And still more cannot align with Intacct’s unique go-to-market strategies.

Those that do often says it’s because of the company’s unconventional rules of engagement, says Macdonald. Here they are:

1)We will keep “bad guys” out of our channel.
Box pushers and client poachers are not welcome in the Intacct program.

2)We charge a substantial partner fee to belong.
While controversial, the company partners to join its program. The fee? $7,500—not cheap. For their investment partners receive training, support and leads. And they never pay anything more.

3)We hire people like you to run our partner program.
Macdonald believes in partners, so much that he has built his team with former practitioners. Today, 21 of his 25 people on his team are former partners.

4)We demand more of partners.
Intacct wants high-growth partners. And it wants them to help others in its program. This includes sharing go-to-market plans and discovery documents. Partners share more to get more.

5)Our program has no tiers.
If you’re looking for special discounts and extra perks due to your size or reach, get ready to be disappointed. Intacct spreads the wealth evenly. And everyone pays the partner fee.

6)We impose quotas.
In return for adhering to quotas, Intacct promises rewards for the life of a customer.

7)We create a winning partner ecosystem.
Partners are expected and encouraged to share resources, talent and thought leadership. And it works.

8)We de-authorize 5-15 percent of non performers each year.
That’s right: Intacct culls its herd each year. Non-performing partners pull everyone else down, it believes.

9)We enforce deal registration.
Intacct never has more than one partner chasing one opportunity at a time.

10)We do what it takes to win.
Intacct has both direct and indirect sales. So it promises no channel conflict, executive management-level support and cooperation throughout the organization.

“Our mantra is ‘radically different by design.’ That’s how we think about our channel program,” says Macdonald.

Intacct might not be for everyone. But it’s success offers opportunity for many, not to mention a glimpse at what specialized partners can do for SaaS vendors.