July 11, 2006

How Print Audit grows 247 percent a year by aligning its goals with its channel partners

by Nettie Hartsock, Contributor, SoftwareCEO

How does a young software company with a print-monitoring program break into the world of established vendors like Xerox, Toshiba, and Konica Minolta?

Print Audit did it by learning how to keep its software in the background, and helping channel partners sell more of their own equipment and supplies.

The result?

Sales doubled every year from 1999 to 2003, climbed 89 percent in 2004 and were up another 53 percent in 2005. All in all, the company averaged 247 percent growth every year for the past seven years.

How's 2006 shaping up? "We were up another 58 percent by the end of June. So we're having another great year, and we don't see that slowing down," says CEO John MacInnes.

The company now has more than 624 resellers around the world, with close to 200,000 registered seats, plus hundreds of thousands more users running trial versions.

Based in Calgary, Alberta — Canada's oil-rich province — Print Audit has 28 employees, 20 in the head office. It has sales and support sites in Australia, South Africa and the U.K., with a distributor just opened in Brazil to handle South America.

MacInnes says aligning his goals with those of his channel partners was the most important factor in his firm's success.

"We weren't the first mover," he says. "There were a couple of other big players out there. Our ignorance at the time was really a benefit, because we've taken up a substantial chunk of the leader's market share."

How did they manage to expand so dramatically, without ever taking on any investors?

"We are smaller, faster, and we're able to react to customer demands. We've based our business around 100 percent customer support. Our products are great, but our customer support is unmatched," he says.

During our recent conversation with MacInnes, that ideal of top-flight service came up several times. It's one of 15 tips we picked up from him for success in the software business.

Align your goals tip #1: Listen closely for business opportunities.
The idea for the business originally sprang from a conversation at a Christmas party in 1998.

A colleague told MacInnes he was working with a law firm that charged clients for every photocopy they made, but couldn't figure our how to charge for printouts from their PCs.

"That's what really got us started: to come up with a way for law firms to recover the cost of printing, as they did for photocopying," says MacInnes.

"It was me and a developer working out of the basement of my house originally. Eventually we grew to eight people in my basement, and then we had to get an office. We were doing well enough at that time to move."

Software entrepreneurs take note: A multi-million-dollar business idea is as close as the next party.

Align your goals tip #2: Help boost your channel partner's sales and you'll boost your own sales.
But it wasn't easy getting the company off the ground.

"When we first started Print Audit, we were trying to get the photocopier dealers to sell it, and it wasn't working," says MacInnes. "It wasn't their product.

"So we had to learn that we needed to help them sell their own stuff, and not even talk about our piece. We've had much more success since then."

It seems obvious, but many software vendors miss this point: Your channel partners are busy. They don't care much about your software. They just want to make money.

"So we aligned ourselves with their goals. We made it about helping them sell their printers, and less about highlighting what Print Audit could do.

"The real key for channel sales is to help them sell their stuff," he says. "So all our channel marketing is this, 'We're going to help you sell more photocopiers. We're going to help you sell more printers.' The more successful they are, the more successful we are.

"We missed that for the first couple of years. When I look back on it, it seems so simple. We learned to empower them, and then it really all changed for us.

"By helping them to sell their stuff, we continue to grow."

Align your goals tip #3: Give your partners a compelling pitch.
But even that wasn't enough. MacInnes still had to give his dealers a pitch so compelling, it would catch a customer's ear.

How did he do that? Cost savings, of course.

"Once they were in the door with the customer, we wanted them to take over from all the other suppliers, and show the customer how installing Print Audit would save on their printing costs.

"The customer would get the lower cost per page and the dealer would get more revenue. It seems really simple, but it took us a while to figure that out.

"With photocopiers especially, the channels have been swamped. What we've done is create a way for dealers to do a full assessment of a customer's network, and point out the devices that need to be changed, and put in more of their hardware.

"So using our software is helping them sell more hardware. The margins are lower, but they're selling more of it. And past that, we're teaching them to be more consultative in their sales approach."

How did he build up his channel partnerships?

"Starting out, we established these relationships by introducing ourselves over the phone, doing online webinars through a service called eboulevard — which was fantastic — just showing the guys we were with them all the way."

These efforts paid off: today MacInnes says "we can barely keep up with all the salespeople calling us. That allows us to keep fairly small and agile on this end, but we have a huge sales force out there.

"We have many dealerships and relationships with people who sell Print Audit, and that just keeps growing every day."

Align your goals tip #4: Always have a person answer the phone.
Here's something else that MacInnes firmly believes: You must have a real person answer your phone.

"Always answer the phone during business hours," he says. "Then people always have someone to speak to. That's been huge for us, that customer service piece.

"With all of our competitors, you get an answering service. With us, you get a real person. And that's whether we have 10 calls or 1,000 a day. I just keep hiring people to answer the phone.

"When we started to dig into it, people kept telling us — even more than the product — it was great that they could reach us. All of our testimonials say somewhere that the technical support was awesome.

"The key is accessibility. There is no voice mail here. Someone always answers the phones."

A touch of personal service goes a long way, he says.

Yes. This is one of our pet peeves: websites you can search forever without spotting a phone number to call. Or finding a number that leads to nothing but an endless loop of voice mail.

MacInnes's point is that making it easy for prospects to call can be a competitive advantage that outweighs the cost of another person or two.

Align your goals tip #5: Celebrate your successes with your people. And their people.
"Take care of your team, and they'll take good care of your customers," he says.

MacInnes supports his team by celebrating their successes with their entire families. Those celebrations may come in the form of monthly parties or dinners.

The company sets monthly targets and dishes out real rewards if those are achieved.

"So when we hit our monthly target of deals, let's say we do over 100 deals a month, then we'll celebrate based on that," he says.

MacInnes has learned that it's important to include the "whole" family at these celebratory events.

"I say celebrate your successes, and include everyone, including spouses.

"Years ago, a guy told me he lost some of his top executives to their wives. What he meant was that sometimes his executives would go home and talk about their jobs, and the wives would feel as though their husbands weren't valued enough. And that was impacting the husband's job satisfaction.

"We include spouses, boyfriends, as part of any celebration because we want them to know we understand what they contribute to our success. That has really helped us."

How so?

"We've only had one person leave." One person since 1999?

Yes, says MacInnes, one person. He credits this all-inclusive approach with keeping employees happy and sticking to the company. One person quitting in seven years as a workforce grows to 28 people is the kind of employee retention any HR person would be happy to brag about.

Align your goals tip #6: Celebrate your customers, too.
"Any customer or anyone who finds issues, we honor them," says MacInnes.

"The big one is finding an issue — and helping us through the issue is above and beyond being a customer, as far as we're concerned. So we send out little gifts, like wireless weather stations you can put in your house.

This little gift costs $80 retail, and most people are tickled to get one.

"We really believe in that, and everyone here is empowered to tell us who they feel might have helped us. We do pizza parties for customers too."

If a reseller is doing well, or passes some special threshold, MacInnes tells them to hold a pizza party for their whole office, or their division, and then send him the bill.

How many vendors do that?

Align your goals tip #7: Take out any speed bumps that slow down users.
In other words, when a customer tells you they're stuck, don't just pull them out of the mud. Fix the road.

"When someone calls for technical support, we take action on every single thing," says MacInnes. He bristles at the term "bug fixes." Instead, he focuses on how to smooth out the road for his customer's journey.

"Every release of Print Audit is dedicated to fixing issues and smoothing out the smaller issues, what we call 'speed bumps' where people get stuck.

"So it's not just about the troubleshooting. It's also about making the software easier and easier for people to utilize."

At Print Audit, everyone takes a turn at the phones, so that the whole company understands the customer's perspective.

"We have developers take tech support calls too, so they can listen to where a customer has gotten stuck. And then the developers work on how to improve the user interface."

Sounds nice, but do customers have to wait six months for the next release to see that bump in the road flattened out?

Not necessarily.

"Our turnaround time is incredible," says MacInnes. "If someone finds an issue, we can usually fix it within 24 hours. And then we make certain we pass the fix on to all the customers."

For instance, Print Audit is now up to version 5.24. All 24 sub-releases are given out free to any customer; the company will only charge for the next full upgrade to version 6.

And anyone who downloaded a trial version from Downloads.com, Softpiles.com, or Tucows is welcome to call in for free support.

"We want to be where people are looking. We don't want to make it difficult for people to try out the software, or to get help using it," says MacInnes.

Align your goals tip #8: Call users soon after the sale to get them up and running.
A helping hand reassures users and promotes Print Audit in their minds.

"Five to 10 days after a purchase, we think it's important to contact the customer, reseller, and everyone involved in a purchase, and extend our support and help to address any issues they might have."

This first contact is to let them know someone's always there to help, and make sure they got up and running with the software.

"We always want to make certain that any customer knows they can contact us directly at any time. This helps us know what they want in the next version. And the purchase goes to the reseller, so we're not taking that away from them."

Align your goals tip #9: Next, ask for a testimonial.
What better time to ask than when a customer is starting to experience their payback?

MacInnes has another rule he calls "survey, survey, survey." So Print Audit keeps on asking customers how things are going.

"Forty-five days after the original point of contact, we do a full survey," says MacInnes. "We ask them 'What do you think? How did you like dealing with the reseller? How did you like dealing with us?' And at that time, we ask them for a testimonial."

Once again, he believes in the personal touch.

"They don't log on to the survey, we make phone contact, personal contact with the customer. That's really important," he says. "We have a guy whose job is to just survey. I get reports on the surveys, and I know immediately how we're doing.

All the testimonials go up on Print Audit's website, which now boasts well over 100 of them, with more added regularly. They make an impressive display of customer satisfaction.

Here's a typical letter from an advertising agency:

"Before we installed Print Audit, capturing billable print charges was haphazard at best. But Print Audit put a stop to print jobs with no owner.

"The program was easy to install and set up... Our billings for proofs have more than doubled since we installed Print Audit.

"I wish every software program performed as easily and as reliably as Print Audit."

All the others go on in the same upbeat way.

"We have several testimonials that say they've recovered the entire cost of Print Audit within just a few days of implementation," says MacInnes.

Large organizations can typically save up to 25 percent of their imaging costs every year with Print Audit, he says.

This happens, for instance, by routing color print jobs to cost-effective digital copiers instead of expensive inkjets. As well, some IT organizations charge back printing to various departments, while some agencies charge clients for every page they print on their behalf.

Align your goals tip #10: Dedicate resources to entering competitions.
Everyone loves awards. But few companies chase them as diligently as Print Audit.

"We have a marketing person who as part of his job goes out and nominates us for awards," says MacInnes. "It's a win-win for everyone. It helps push our software forward through brand recognition, and it keeps everyone excited about what we're doing."

Trevor Hofer, Print Audit's marketing director, says the company has applied for awards from day one, but really began to focus on it three years ago.

Hofer estimates that he spends about 20 percent of his time entering competitions; some months more, and some less. And it's paying off.

For instance, MacInnes has been nominated for the Ernst & Young Entrepreneur of the Year in Alberta for two years running. And that's not all.

"We've won five business awards and been finalist for several others. The biggest one we've received is the 2005 National Quality Institute's Gold Customer Service Award, which is a very prestigious award in Canada," says Hofer.

He says the quality award was a terrific win for the company because it highlighted their success in providing excellent customer support — and it's now a key selling point for Print Audit.

The company makes certain that every award is displayed on its website and followed up with a press release.

"Awards are great free publicity, but we also leverage them on our website to attest to the strength of our company and products," adds Hofer.

Align your goals tip #11: Know what it takes to win awards.
Winning awards takes knowing your targets and consistently being the stand-out in your market. And it takes time.

Hofer finds most of the awards he enters with Google searches; he maintains a large list of awards to target.

Every award calls for an application that spells out how the company meets the stated criteria. Applications focus on things like financial performance, customer service, community involvement, uniqueness of a product or service, and corporate culture.

Hofer says some applications can be completed in a few hours, while others take several days to wrap up. The first year is generally the hardest; after that, you can use the previous year's entry as a template to save time.

Beyond what the application form specifies, Hofer recommends including extra materials like financial statements, testimonials, and case studies.

He says your application should focus on what's unique about your company, and what sets it apart from competitors.

As noted above, Print Audit contacts all their clients 15 and 45 days after a purchase to make sure they're fully satisfied: something few other software firms can claim.

"A key factor in us winning the NQI award was our dedication to customer care," says Hofer. "Very few companies take such a proactive approach to customer support."

Align your goals tip #12: And use those awards to open new partner opportunity doors.
Print Audit is ready to partner at every opportunity. And sometimes those opportunities even come at awards ceremonies.

"The NQI award was presented to us by Cameron Hyde, senior VP and general manager, North America agent operations for Xerox. Winning the award helped open doors for us at Xerox," says Hofer.

Print Audit had been trying to partner with all the major office equipment manufacturers, and Xerox was high on their list.

Winning the award helped introduce Print Audit to one of their top executives, and today the company is working with them on several different projects.

"It's too early to quantify it, but it will lead to big things down the road. It was a good way to begin the relationship. Since Xerox won the same award, they knew that we had a strong dedication to product quality and support," says Hofer.

Align your goals tip #13: Measure everything.
"Know the pulse of your business at all times," advises MacInnes.

"I'm a real nut about statistics, and we're always trying to prove things. If you can't see where you are and where you're going, you're missing the boat," he says.

Here's an example of how these metrics paid off.

By delving into the reseller history, Print Audit managers realized that once a dealer gets to three sales, they are highly likely to take off. But if they never get to the third sale, they will never likely amount to much.

"Three is certainly a magic number for us," says MacInnes. "That seems to be a magical tipping point. If they don't get over that threshold, we never see them turn into a real big dealer. But once they get over three deals a year, they typically do a lot more."

So Print Audit brought in a loyalty program, with increasing discounts for those all-important first three deals. The discounts go 15 percent for the first sale, 25 percent for the second, and 40 percent for the third.

And dealers making their third sale are likely to get a free pizza party as well.

"I get stats on how much maintenance we sell broken down by product. I know how much sales people are doing, how many calls we're making, and what web pages are being visited.

"It's like using a big dashboard in a car, and knowing how your business is doing."

We hear this often today: the importance of key performance indicators or metrics. After all, if you're not measuring how your business is doing, how else can you manage it? By guess work? Gut instinct? Your own personal superpowers?

Think again.

Align your goals tip #14: See how SaaS can open up new opportunities.
The biggest trend in the industry today is software as a service (SaaS). But would it work for a company like Print Audit?

MacInnes thinks it will. In fact, he's banking on it with his latest product, the Print Audit Facilities Manager.

This utility can count how many prints or copies have been made, check ink or toner levels, and see whether any machines on a network need servicing.

This data is relayed to a secure web portal to alert the dealer that it's time to ship out some more toner, or make a service call to repair an ailing machine.

MacInnes hopes this new software will save his channel partners millions of dollars in routine visits to customer sites that could be eliminated.

All this system management can now be done remotely, as a hosted service billed on a subscription basis.

"Our biggest goal for the future is to significantly increase our recurring revenues to the point that they represent the majority of our income," he notes.

This is SaaS taking root in a corner of the field where some would least expect it. And he's investing in it.

"We just put $120,000 into our infrastructure. We have our own data center in our own building, with triple fault tolerance, three separate ISPs, and all that," he says. "This is going to be a big part of our future."

In fact, his five-year goal is to manage a billion pages a month through this new service. That's billion with a "B." And it may not be as crazy as it sounds.

"We only need 15 or 20 big dealers to do that," he says optimistically, noting that one dealer he knows handles 80 million pages a month today.

And price-per-page is the way most of his dealers think, not price-per-device or price-per-seat. Once again, he's aligning his goals with the way his channel normally thinks.

Align your goals tip #15: Build a great team, then lead them into the future.
The future does looks bright for Print Audit.

MacInnes says this is his most important piece of advice to his fellow software executives.

"As a CEO, it's my job to work on the business, not in the business. Small businesses sometimes miss that. Build a great team to support you and then look to the future; that's your job," he says.

"I don't need to worry on a daily basis whether we're going to have sales tomorrow. I don't have to micromanage. I need to be thinking about the future.

"The problem is the entrepreneurial mind sometimes wants to have too much control. It's sometimes hard to delegate things; you tend to think you can do it better yourself.

"But you need to understand that sometimes other people's ideas are better for you. I never have any fear that things are getting done. I know things are getting done, and it's my job to lead to the future."

MacInnes spent the first couple years in business trying to figure out why the Print Audit software wasn't selling.

Seven years later, he spends most of his time managing his company's growth, and working out a strategic direction to the future. That sounds like an effective CEO to us.