Accounting software firm MYOB has attracted the wrath of some resellers after Craig Winkler, MYOB CEO. claimed in the December 1 issue of ARN `we're not doing the Compaq thing and setting up MYOB stores, and we're not direct selling to our existing customers'.
Gunter Jank, managing director of Perth retailer Cash and Carry, believes MYOB's policy of selling and managing upgrades for customers constitutes direct selling of the worst kind, the capitalisation of the channels initial effort.
`I am a retailer and know that from the moment we have sold a MYOB accounting package to a customer, we have lost him for good. As soon as he returns his registration card to MYOB, they start selling upgrades direct to the customer. MYOB does not make these packages available to retailers,' said Jank.
Harvey Norman's general manager, computers and communications, John Slack-Smith, is also unhappy with his exclusion from the total customer life-cycle. `We don't sell upgrades but we would like to and are in discussions with MYOB now to do so,' he said.
Winkler admits that MYOB controls the sale of upgrades but says it is not a missed opportunity for resellers. `The resellers won't make much margin out of upgrades,' insisted Winkler. `The real opportunities in the New Year are in new customers, with about half a million potential ones out there just because of the GST. The overall size of the market is also growing.'
And this expanding new customer base is a reseller's hollowed ground, according to Winkler. `All our new products go through the channel, we don't sell them direct at all and the new products have much better margins than the upgrades.'
Winkler says he has only received a handful of negative comments from the channel regarding this policy, rather than a `groundswell of discontent. This is something we have reviewed a number of times and will keep on looking into it. Our priority is to find a way we can maintain the integrity of the customer relationship and look after our resellers, who are our customers too.'
The negotiations with Harvey Norman are part of this review process, according to a MYOB spokesperson, who insists that if MYOB was to change its upgrade strategy `it would involve the whole channel, not just Harvey Norman'.
However, she explained that although Harvey Norman `would certainly like to see that (HN selling upgrades) happen', MYOB's customer policy relies on its internally developed customer database and she expects little change to the strategy.
`We've had a customer relationship management data base for about 10 years now. It was developed by MYOB for MYOB customers and I can tell you anything at all about a customer. The channel doesn't have that relationship,' she explained. Customer relationship management, the new catch cry in the IT industry, significantly contributed to Winkler's decision to control customer upgrades beyond the initial sale.
`We can track very carefully what version of any of our products a customer has and can support them through this information. Other players lose track of their customers, which is one of the risks of going through the channel.'