Jim Roddy | Three Steps of Effective Delegation

It’s all too easy to get busy with the day-to-day of your business… and neglect to put systems in place that will help your company grow and be profitable in the long-term.

Jim Roddy, a business advisor with payment solutions provider Worldpay, helps small business owners streamline operations and plan for the future.

A big part of that is making sure it can survive – and thrive – if you’re not around.

We talk about the right way to delegate, as well as…

• Cross-pollinating business best practices
• Choosing passion over experience when hiring
• Why you want to avoid “big sales” – and what to do instead
• The advantages of “cheating” in business (and it’s totally ethical)

Listen now…

Mentioned in This Episode: www.worldpay.com

Episode Transcript:

Doug Hall: Welcome to the Go for Growth Podcast. I’m your host, Doug Hall, and today I have a great interview with Jim Roddy, reseller, business advisor at Worldpay, a global leader in payment processing.

I invited Jim because his passion is helping business owners improve their results. He’s well-qualified because he’s an experienced entrepreneur and business owner that sold his business and became the CEO of the Acquirer. His day-to-day work is with people that own businesses in the point-of-sale tech market, but he actually helps them solve classic business challenges in the area of leadership, culture, management and business improvement.

The cool thing about Jim’s position is he gets to see what’s working and not working across many businesses across the country and around the world, and he shares success stories with the business partners, so, today we have an opportunity to talk to Jim, hear about some successes and lessons learned. Here’s the interview.

Jim Roddy: Yeah, I’ve been doing this Vantiv now Worldpay business consulting thing for a little over two years now, and it’s been going well. It’s interesting just to, I would say, stumble into some of these businesses, but they’re not quite sure what to do, but they’re looking to try to get some help, and then just to be able to dive in and help them out from that standpoint, just a lot of different businesses. Even in this point of sale or this general world, folks who focus solely on hardware or pharmacy POS.

Or I worked with one guy who his focus is the build your own pottery, or paint-your-own-pottery market, and he puts together niched solutions for them, so you never know what you’re going to walk into. Like, last week, I was in London, Ontario, meeting with a group that has only seven employees including the owner, and they’re all based in one small office, and I was in St. Louis the early part of the week with a group that has 75 employees, and a bunch of those are in the Philippines, that’s their tier one support, salespeople all around the country.

I just get to be with a lot of different groups, but they’re still in the same vein that they’re not so radically different like I’m consulting a zoo and then a bank or something like that, so … but it’s been enjoyable, no doubt it. Yeah.

Doug Hall: I’ve always meant to ask you this. Are they qualified or pre-qualified based on how heavy they use POS services or use CARDPAY services, or how do you filter them?

Jim Roddy: I always tell people, if you call me, I will answer the phone, and I’m not going to hang up on you.

Doug Hall: Right.

Jim Roddy: I’ve even had people who have nothing to do with Worldpay whatsoever, but they’re looking to get a better lay of the land of this industry. I’ll have a call or a couple, just general calls with them. I do tell folks you have to be an official Worldpay partner in order to get the workshops or the merchant survey that we do, stuff like that.

The way that it started off was just catch-as-catch-can, but, this year, we shifted to having folks make commitments as to what they were going to provide over and above what they did last year from a residual or income standpoint or the number of merchants that they steered over to Worldpay standpoint so they’re classified as Gold or Platinum Partners, so that just gave me a list that I just went after, which is great.

It was way better doing it that way than just scrambling and seeing who might be a fit and you end up going like, “Hmm, how much is this person really going to help our business?” but these are all … not that other people are illegitimate, but these are all really legitimate companies, a lot of them ISVs, not some of these three-person reseller organizations, so a little bit more sophisticated customers, a little bit bigger, and so that’s where my focus has been this past year.

Does that answer your question?

Doug Hall: Perfect. Yeah, so characterize Worldpay in the POS reseller world. Are you guys number one, or where is Worldpay now?

Jim Roddy: Yeah, so Worldpay is number one globally because it used to be Vantiv and Worldpay, and Vantiv bought Worldpay and then stole their name. Where the roots are in the channel is there was a company called Mercury Payment Systems, and they were the first one, this was about 15 years ago, to say, hey, instead of credit card processing being that separate … Do you remember how, when you paid with credit card, before, they’d hand a machine and do the knuckle buster, then they would hand you a little terminal and you’d swipe your card in there?

Doug Hall: Yep.

Jim Roddy: They said, “How about let’s going to start to get integrated with the POS system? How about if we integrate with software developers and have them have it integrated in their software and offer us the payment processor, and then resellers can sell that software, sell the hardware, sell a whole integrated thing, and resellers are going to get a cut of that action?” where the people who got the cut before were called ISOs. They went door to door and swap out your terminal and you get a better rate, but you can imagine the turnover for that was super high.

Once it became what’s called integrated payments and it was sold by resellers and they were getting a cut of it, it became a waste to take care of relationship because people weren’t pulling out. They wouldn’t pull out the payment processing because it was integrated with their software, and so that’s how Mercury became the king in the channel.

I’m guessing you’re familiar with the whole Blue Ocean Strategy thing. That was the Blue Ocean back then. Now, it couldn’t be a more Red Ocean at this point, where at the leading trade show retail now, Mercury used to be the only one for a couple of years, and this past year, I think there were 29 payment processing companies there.

Doug Hall: Wow.

Jim Roddy: Yeah, so Worldpay is still number one, but not the only one. Plus, some payment companies are buying software developers and forcing other payment processors out. That’s a new development going on in this industry.

Doug Hall: That’s a vertical integration play that’s going on.

Jim Roddy: Correct.

Doug Hall: Yeah, lining up-

Jim Roddy: Go ahead.

Doug Hall: No, I was just going to say that they’re lining up all key resources so they’re forcing the hands of either merchants or the resellers and the merchants to align with their preferred payment processor now …

Jim Roddy: Exactly. Somebody had a great line and they told me one time where they said the two most effective marketing techniques in payment processing are lying and bribery. They’ll overpromise, under deliver, and then the bribery is, “Hey, we’ll give you X amount more.” This new one is taking hostages. That’s essentially what …

Doug Hall: Taking hostages.

Jim Roddy: … they’re doing is they’re … and they’re putting a gun to the head of the merchant, the reseller, and so we’ll see how it shakes out. I mean, Worldpay has not bought an IS … software developer. They don’t plan on doing that. They want to remain agnostic, but we’ll see how that all will shake out in time.

Doug Hall: Yeah, so, roll it back. Worldpay was Vantiv plus Worldpay, so take it all the way to Mercury. How many acquisitions were in there … or mergers?

Jim Roddy: Oh, gosh, so-

Doug Hall: Several, I don’t remember it. Yeah.

Jim Roddy: Yes, so Vantiv spun off from Fifth Third Bank, so Vantiv bought … I always forget their name now. They’re an E-commerce company. They’re up in Massachusetts. They weren’t really big in the channel because they were E-commerce. Litle. It’s what they were called. They bought Litle …

Doug Hall: Litle. Okay.

Jim Roddy: … and they bought Element, which is based out of Arizona. Element was a competitor with Mercury. They came on the scene as well. After they bought Element, then they bought Mercury, then they bought Moneris, their US division, which had a big healthcare play with Henry Schein, and then the whole Worldpay thing happened. Those are some of the … pretty much the biggest ones in the path …

Doug Hall: The big ones.

Jim Roddy: … that they are now. Yep.

Doug Hall: All right, so go back to a little over two years ago. What attracted you to this role, and play it back to your background? I know you were CEO in publishing and other stuff.

Jim Roddy: Sure.

Doug Hall: Your background was really from a different angle, and you parlayed it through time into a satisfying situation where you’re working with business owners all the time now.

Jim Roddy: Yes, and I guess there’s almost a more serendipitous story in terms of how I got into this business, in this path of it, and this is why I’m a big fan of, “Try things and just get out there and see what happens because you don’t know what’s actually going to be on the other side.”

The way that I got into this industry was simply looking for a cheap office space. When I was 23 years old, I decided to start my own sports magazine. I’m in Northwest Pennsylvania, I’m in Erie, Pennsylvania, and I only had $6,000 to start with. I didn’t really know anything about business. Of course, I was only 23, and so I was looking for the absolute cheapest office space I could find that didn’t have bugs or water on the floor.

It’s essentially what it was, so I found this office park that was actually converted from a burial casing company. They were a casket manufacturer, and so they converted everything into small offices. I got this office in the back. I mean, it had no windows. It was so far in the back of the building. If you went out the backdoor, you were on the railroad track. It was that far back, and it was maybe 12 by 12. It had a big fluorescent light hanging down. I’m like, “Huh, that’s where I could do my layout,” and I paid somewhere around a hundred bucks a month with the total rent including utilities, but then, serendipitously, the only technology publisher in town … and who would thought there’d be a technology publisher in Erie, Pennsylvania?

Doug Hall: In Erie, Pennsylvania, right? Exactly.

Jim Roddy: Right. Right, not exactly the epicenter of the IT world, we always joke, “The Silicon Valley of the Rust Belt.”

Doug Hall: Yeah.

Jim Roddy: They happened to move into the front of the building and, because they were publishers and I was a publisher, I ended up meeting the owners and, after about five and a half years, I realized like, “Oh, you can only grow a sports mag, a sports magazine in Erie, Pennsylvania, so big, and I’m not going to be able to really sustain myself and my family long term.” This was before the whole advent of the Web and all that stuff.

Doug Hall: Right. Yes.

Jim Roddy: I ended up jumping on board with them because they were looking for a managing editor. I worked there for 18 years, the last 11 as company president, and then just based on the relationships that I had in this information technology channels, specifically the retail, hospitality, grocery IT world, I ended up becoming a business consultant.

Based on my experience helping grow the business and working and building a team and then also working with a lot of other leading IT businesses, I was able to parlay that into what I’m doing today as a business advisor for solution providers and software developers in this industry.

Doug Hall: That’s an amazing transition particularly starting at a $100 a month. I commend you.

Jim Roddy: It was. My delivery vehicle was a 1992 Geo Prizm for my newspaper, and my monthly payment on that was $145. When I went to upgrade to a truck, I, of course, went to my advertisers, and the person said like, “So what are your monthly payments now?” I said, “145 a month.” He looked up at me and said, “That’s un-American.”

I was definitely bootstrapping it for five and a half years. I learned a lot that way though. I’ll tell you that. I feel like I got a free master’s degree. I had not debt coming out of that.

Doug Hall: That’s amazing. Publishing is a tough business, always has been, no question about it, so I commend you on that …

Jim Roddy: It certainly got tougher after the Great Recession for sure.

Doug Hall: Yeah. Exactly. If you think about the channel participants that you’re meeting with and consulting and you’re sharing from your business, deep business experience, both bootstrapping, doing your own thing and working, and a growing publishing concern, what value do the owners get from your conversation and your advice to them? What do you see lighting up in their eyes? What tends to resonate with them the most?

Jim Roddy: Sure. That’s a good question. That’s something that I think I ask myself every time I hop on the phone, like, “What value am I going to be able to provide here?” The one thing I say is, “So don’t take this out of context, but, in business, cheating is legal,” and I say that not from a tax standpoint. I say that from comparing with school. In school, if you wanted to look at somebody’s paper, if you went to a Catholic school, the nun would be rapping you on the knuckles with a ruler so you couldn’t look at somebody else’s paper.

But, in business, if you go and ask somebody, “Can I see your answers? Can I see what you’re doing? Can I learn from you?” the answer is, “Yes,” and people open up their doors and they’ll have conversations with you on that, but maybe school can beat it out of us, literally or figuratively, where folks don’t look to see what other people are doing, and so my role is … I stole this phrase from someone else, I can’t remember who it was, listening to a podcast like this, and it was, “I mobilize the expertise of others.”

I don’t walk in and say, “You know what I would do in this situation.” I do bring some of my own experience that helps me run ideas through the filter in terms of what would impact the real world or not, but while the people who I work with, those businesses, they’re spending all their time focused on their customers or with their team members, I’m spending time looking at businesses similarly situated to them, seeing what the leaders do, seeing what the laggards do, and then I’m just able to share that with them in terms of, “You can do whatever you want, but I’m just telling you, because I talked with so many businesses like yours every week, and I’ve talked with dozens, if not, you know, a few hundred over the past few years, getting a little bit deeper into their business, I can tell you the trend that I’m seeing, what folks are doing.”

That’s where I think I give them a little broader view and give them the opportunity to look through a periscope. Instead of just focused on what’s under the water in their business, have that periscope and then give the much broader view without them having to talk to 50 people in their industry, I’m the one doing the legwork, and I consolidate that and share it with them in terms of what works for them.

That’s the main thing where I said … I actually have it hanging up on my wall. I’m looking at it right now. I mobilize the expertise of others.

Doug Hall: Great, so you’re like the bumblebee flitting around and cross-pollinating.

Jim Roddy: In some ways, yes. Yes, somebody said like, “Trying to inject a certain level of DNA into different organizations, whether that’s from a strategic standpoint, a principle standpoint, a best practices standpoint or a training standpoint,” I am finding out what is working inside some of these organizations, and those who are interested can inject that DNA into their business as well. Their choice.

Doug Hall: Right. You just opened an interesting question for me. Unpack those four, five elements a little bit and tell me to what degree, what percentage of the time do you get those different concepts. Whether it’s principles or best practices, what comes up the most both when you’re meeting people or when you’re cross-pollinating and sharing?

Jim Roddy: That’s a good question. There is a real thing in the SMB world where businesses aren’t necessarily … I’ll use the word sophisticated. I hope folks don’t take that the wrong way, but I’ve had that word said back to me at times, where some of these small businesses feel that they’re not sophisticated.

When you are an organization that is of a certain size, five, 10, 15, 20 people, of that size, you only run into so many situations in your business, but once you’re running an enterprise that gets to … I call it an enterprise. If you’re running a larger company, you laugh and go, “Hmm, 50 people, that’s no that many,” but once you’re getting into that realm of having 50 people, just the shape of your business changes drastically, or if you’re at the top of that, I don’t want to say you’re not necessarily not doing anything, but you’re really pushing things through other people or else nobody’s really running the business itself.

Excuse me. I run into some of these smaller organizations that just haven’t taken the time to really think about their business model, haven’t thought about general principles of the best practices for running their business or what’s really their future five to 10 years from now, and I don’t fault them for it.

When I was a small business, somebody laughed about, “Oh, my gosh, I can’t believe this business doesn’t do financial reports.” When I was self-employed, I just did everything out of my checkbook. I mean, I didn’t know any better, so … and I was working all the time, so how would I have the chance to learn other things?

That’s what I think I run into is this lack of sophistication, where folks haven’t considered building systems inside their organization. Some of them, these are IT service providers, they are preaching to their customers about how you have to automate, how you have to streamline, how you have to reduce friction inside of your business, and then you look inside of their own business, and they’re running very inefficiently just because they’ve always done it that way.

I just see a lot of folks who don’t take the time to retool their business, and, again, I don’t blame them for it, but you just really have to get that discipline inside of your business to say, “I have to spend X amount of time, whether it’s per week, per month or whatever, working on my business and figuring out what things can I do better, how can I sharpen the saw instead of always just trying to cut down these trees with a dull blade.”

Doug Hall: Yeah. Great. Great analogy. When you’re with those smaller firms in that small-medium business size, below 25 employees, is the message resonating? Are the light bulbs coming on, or are people just taking it as encouragement, and then, “Yeah, we’re going to get to that later?” What do you most often hear?

Jim Roddy: That’s a good question. There’s not a one-size-fits-all answer for sure. I would say the folks who I’m engaging with regularly are the ones who are really eager to move their business forward. If they’re not as eager to move their business forward, they’ll just either stop returning calls or push things off or just say, “Not at this time.”

There are some folks, like I won’t name names on here, but I check in with them every 30, 60 or 90 days, and, between calls, a small percent of them just say, “Ooh, got busy, never made any progress,” but I’d say a lot of folks are, “Hey, I didn’t do exactly what we talked about last time, but I threw myself in the middle of it. I learned this along the way. I just did a little bit, but here’s why I’ve moved forward. Here’s what I learned from it. Here’s kind of the next thing that I did, and here’s kind of the next thing that I’m thinking of.”

There are a lot of times that I’m pleasantly surprised where I go to get updates and folks are making significant strides. I’ll give you an example. I worked with a software developer out in the western part of the United States, and he was talking about, “I really need a salesperson to expand my business,” and it seemed like the appropriate thing to do. They’re doing a lot with word of mouth. He wanted to add a second salesperson.

He had this guy with a lot of experience, who he had known, and he had been begging the person to come on board for several months, and the person was like, “Hmm, I don’t know. I’m not quite sure,” and so I said to him, “You know, wouldn’t you really rather have somebody who might not have this person’s skills and experience, but who really had the passion to work for your business?”

This is actually from my high school basketball coach who didn’t do any recruiting, and he said, “if I’m going to beg the kid to come to my school, I’m going to beg him to come to practice. I’m going to beg him to work hard. I’m not a beggar,” and so I just shared with him like, “Why don’t you get somebody who’s got this engine to really want to work for you?” and he said, “Huh, I never really thought of it that way.”

I checked back in with him two months later, and he was like, “I hired somebody with a ton of passion after we had that call. There’s somebody who I knew. She said she had been interested, but she was in a completely different industry, but once we got down, I said I’d take her out to dinner. It turned out to be a four-hour-long thing,” and so we got somebody who’s a real engine inside of his business.

That’s like a specific example of somebody who just says, “You know what, that’s true. I never thought of it that way, and I am going for it,” and so that fires me up because … in a good way, because there is that entrepreneurial spirit not just to start a company, but to really expand and grow and better the organization.

I run into that a lot, and that’s why I think I keep coming back in every morning to be invigorated like that and see some of these folks really rekindling their entrepreneurial spirit.

Doug Hall: Yeah, that’s a great story because you provided direct value. He took your advice, executed, and got a great person on board instead of an “uh” person.

Jim Roddy: Right, and the person he brought on board didn’t have the experience, didn’t quite have the skills, but you’d rather have somebody who’s got the heart and the fire in the belly, as what we used to call it, I’m going back almost 25 years, describing that, but that’s what you’d rather have.

Those are just, like I said, some of those general principles. I’m able to share with somebody who never really thought of it. They thought, “I hire based on the resume. What else is there to hire based on?” but it’s really what’s inside the person.

Doug Hall: Perfect. Love that advice. That’s awesome. What kind of advice do you generally spread around and stories that you take from one partner to another regarding management versus leadership? Is that a topic that comes up some, because you mentioned they might be doing everything? At 10 or 11 or 12 employees, the owner-manager is calling all the shots, right?

Jim Roddy: Yeah.

Doug Hall: Tell me a little bit about some of those stories.

Jim Roddy: They know when I’m talking to them that they’re doing too many things inside of their business, where they are the top salespersons, they’re with the top customer service person. Because they built up that business, they’ve got to watch the finances as well. They tend to be because they’ve been the longest, and they go to the trade shows, they know from a technology standpoint.

They know that they’re in that spot that they’re doing too much and they need to teach other people, but, again, going back to that sophistication thing, teaching is way different than starting a business and running a business. It’s a completely different mode, and so I have a lot of specific conversations about delegation.

I actually worked with somebody who I hired, and they taught me six words that have the three steps of delegation, “I do. We do. You do.” I do it well myself. We do it together, and then you do it, and I watch you do it well, and the joke is always, if you don’t do “I do, we do, you do,” you end up in “do-do,” and so we do … I do some coaching based on not just saying, “Yeah, you should delegate,” and they’re like, “Where do I start?” but we talk about the concept of, “There’s no substitute for a competent manager getting closer to a situation,” so get close to it, teach the person, but don’t do it for them. Manage their expectations. Make it clear what they’re responsible for, and have regular weekly meetings where the job is you handing it off to the person or them watching you or you teaching them.

You can have a list of things they need to get competent at and you’re talking every week about are they getting competent at that, what things are you going to focus on, what steps are they going to take in the next week, what steps are they going to take with you in the next week in order to build that up, and it’s not magic by any means, but it really takes a focus and a discipline to do that, and so that’s part of where I check in with them in terms of, “So how is that handoff going to that new … whether it’s a salesperson or technician or somebody running the operations or something of that nature?”

That’s a regular conversation that we have is it’s not like a light switch where they’re just going to switch and, suddenly, the person is someone you could hand things off to, but we do the fundamental “making sure they stay disciplined and can act as their coach.” Just like making sure they’re staying on their diet and working out five times a week, we make sure that they’re doing those things, to make sure they’re actually building a business underneath them, so they actually have something to sell, so, when they walk away from the business or sell it or hand it off to somebody else, there’s actually a business there as opposed to the owner leaves and the lifeblood is completely gone.

That’s an example of one of the things that we do where we get down to a strategic. You’ve got to delegate, and then how do we actually make that happen?

Doug Hall: That’s excellent. You made me think of two things there. Number one, you’re delivering ongoing value in the relationship to this targeted set of folks that you’re calling and working with every month or two or three, right? That’s ongoing.

Jim Roddy: Yes.

Doug Hall: You’re building business relationship and value for them to be loyal to Worldpay, but, on the other hand, you’re giving them value, not just a service. You’re giving them consulting value, right?

Jim Roddy: Correct. I work with our Worldpay partners, and while a lot of times folks have said, “This just seems like it’s completely out of the goodness of your heart,” and, to a degree, it is. I’m not charging this to people. If you’re a strong Worldpay partner, you get this for free, but because we do everything through our partners, the stronger our partners are, the stronger our business is going to be as well, so, like I said, that’s the longer term thing for this, yes.

Doug Hall: It’s more on a reciprocity basis, right? It’s good for you, it’s good for them, and then, ultimately, it’s good for Worldpay.

Jim Roddy: Correct. There is not some smoking gun, “I said this, and your sales went up like this.” It’s really building a foundation and things that are going to keep them healthier in the long run.

Doug Hall: All right, so healthier in the long run, you got me thinking along the lines of, you said, “A saleable business,” so tell a little bit about what you see in the POS reseller channel. What’s holding them back from building value and being more saleable, and what do you most often help them with to help them increase their saleability index, if you will?

Jim Roddy: Sure. Good question. An interesting thing about the point of sale industry is a lot of folks are second and third generation, and so their father or their grandfather started the business, and, no, I’m not saying that’s a … I would say their mother or their grandmother, but this has all been basically a male-dominated business. We’re starting to see some daughters into it as well, but that’s just the reality of it. One thing is they’ve never thought of selling their business or really building up the value of their business in case they’re getting to a spot where they want to or need to sell the business, so that’s first getting the mindset changed in terms of, “Let’s talk about business valuation,” because, before, it was, “Well, what do I care? I’m giving this to my kid. You know, we’re not talking about somebody from the outside coming in here.”

That’s one thing is getting them to understand the business valuation aspect of it, and then the second thing is really them going to work on in two areas. One is having an operational foundation, so they’re not just the magician who makes everything work, because if they’re going to sell their business or, at some point, they are going to retire, and God is on an undefeated streak of everybody dies as well, I don’t think that streak is coming to an end any time soon, so they have to be ready for that, so we talk about building up something from an operational standpoint so the business can run without their constant intervention, and then bridging in with that is automation, as many things as they can automate in their business as opposed to manual they should do, and then that moves into them providing products and services on a recurring revenue basis.

Where instead of making a big sale up front and celebrating that big-ticket item, that doesn’t necessarily build up the value of their business as much as having an ongoing every month recurring revenue arrangement with dozens or hundreds of paying customers. As one reseller told me, he said, “I used to be a sprinter, but now I’m a marathon runner. So I used to get as much as I could in that up front sale, and then once I was done, I’m like, ‘Whoa, let me move on and find the next one.'” He said, “Now, I’m a marathon runner. I’m just looking to get in the door. Get some residual started. Add another recurring revenue product. Add another recurring revenue product and then, eventually, build that up.”

They’re really looking for the long term success, and, again, just like a sprinter trains completely differently than a long distance runner and physically his built is different from a long distance runner, the sprinters are all these really muscular guys, the long distance runners are really lean, their business has to act accordingly and change according to that.

I’m not sure if that answered your question, but that’s the world that seek to dive in in these businesses.

Doug Hall: That’s perfect because you talked about mindset changes, you talked about family transition to the next generation, might turn into selling it to a private equity or something else, so there’s … None of us can beat that. We know that. Automation is always good. Getting an operations plan without the owner having to do everything is magic, and then this whole thing about recurring revenue. That’s a big deal in the IT and POS space, going from that one shot sale or a project oriented pricing to a monthly service fee.

How’s the POS channel adjusting to that? What’s the adoption rate there now in your estimation?

Jim Roddy: It’s getting considerably better. One of the stories that I tell is, at retail now, which is the biggest, the show draws about 2,000 folks in this POS channel industry, it was probably, I’m going to get my dates exact, around, but close enough five years ago where … and probably seven years ago, people started talking about recurring revenue because of what Mercury brought, which was then purchased by Worldpay, Mercury Payment Systems. That was the first introduction to recurring revenue, and so … but that’s where POS resellers thought it started, and then it was all in payment processing.

As we had some resellers adopting the managed services business model and talking about how you can wrap services around the point of sale and make more recurring revenue from that, I’ll never forget there was a presentation given, and one older reseller got up to the microphone and just said, “This will never work. We tried this before. This will never work,” and so you had people, like they didn’t even recognize it and they didn’t see how it would work, and now we have most resellers I would say, the more sophisticated ones, are really scrambling to build up as much recurring revenue as they can. That’s been the major topic at retail now. At the Winner Conference RSPA Inspire, recurring revenue was a huge topic there. I’m starting to see folks make a lot of gains.

There was a holdup for a while where, because this industry is so hardware centric with the whole point of sale system and the all-in-one and the receipt printers and cash drawers and all that stuff, the vendors and the distributors weren’t quite set up to provide point of sales as a service, but now they are and they have been for the past three years, and now the software developers are providing that as well, so there are folks now that finance that, and so we’re starting to see it move in a more significant fashion.

I do a point of sale channel KPI study every year, so key performance indicators, and I have a chart that basically has on the left side resellers who consider themselves 85 to 100% transitioned, where 85 to 100% of their revenue is recurring, and then folks all the way on the right who are close to 0%. I just have that chart, and you can see how most everybody three years ago was on that right side of the chart, under 50%, and now we’re seeing a big migration and most people are sitting at or above 50% of their revenue is recurring revenue base.

We’re starting to see a faster march, and I think a lot of folks expect it in this industry, but it hasn’t just happened serendipitously. This has been something that I can say I personally … The distributors, the press, the folks who I mobilize the expertise of others, they have been very, very loud on, “You’ve got to shift to the recurring revenue business model,” so I’m happy to see folks do it, but the reality is not everyone’s going to be able to make it.

I was just telling somebody this morning, a long-time reseller, “I couldn’t come up with a perfect analogy, but the best one I could is, you know, for a horse race, there’s only X amount of stalls there, right? For The Kentucky Derby, there’s like 18 stalls, let’s say. Well, the first 18 horses in there are going to get to go. If you don’t get in there, you’re not going to be in there.”

Doug Hall: Yep.

Jim Roddy: There’s got to be limited I think market for who can sell more the services to some of the larger multiunit merchants, and that is where I think the big race is right now. Being able to provide more sophisticated services, that’ll help you stay up market, because the mom-and-pop are going up against the tablet point of sale systems that you can … that don’t need to be very sophisticated.

Doug Hall: Yeah, and there’s been big encouragements from Square and those other guys into that space so.

Jim Roddy: Correct. Absolutely.

Doug Hall: Yeah, big, big challenge, so, if you step back and think about the last month of interactions and concepts, principles, best practices you’ve shared with business owners, what’s your favorite number one area, piece of advice? If you just had to share one thing with an audience, what do you think has the most impact? Share it with us.

Jim Roddy: I’ll speak to two different audiences, because that’s what I think I speak to, where I speak to the executives and then, when I do this workshop, I speak to the team members who aren’t the owners, and so, to the team members, the biggest thing is actually care.

Like that story I told about the passion, it’s not that folks don’t care, but a lot of times folks complain about, “Oh, these customers, and this customer is a headache,” and something like that, but what those folks need to realize is when they’re calling and complaining to you, that is a better option than them calling up and complaining to your competitor and saying, “Why don’t you come in and replace them?”

The foundation of every single customer service technique or trick or all these other things that you read about and know about, if you don’t genuinely care about your customers and wanting them to succeed, then all this other stuff doesn’t matter. That isn’t, and so that’s why I said I talk to the teams more about that. I don’t have to talk to the owners about that because they care deeply about their business and about their customers.

I mean, I’ve one who’s super successful, every single customer has his cell phone number. He knows he wants to, he needs to take care of stuff, but if they’re ever in a spot like he will on a Sunday run over a new piece of hardware, if they need it just because, “Hey, I really, you know, care about this person,” as opposed to anything else. That’s one thing that I would say. For the team, you’ve got to make sure you have people who really genuinely care. Teach them to care, or go find somebody who’s going to care, so that’s what I’d say to that one audience.

The executive audience, to me, the biggest thing is having the humility, where even though you’ve been working at this 70 hours week, you’ve been working at it for years and nobody knows your business like you do, that doesn’t mean that you have all the right answers as well, and so … or I run into folks who feel like they’re on the right path because they’re working hard, but nobody pays necessarily for your hard work, they’re paying for the outcomes. The successful folks I see are the ones who have the humility to say, “I will go to trade shows because I believe I can learn something even though I’ve been at this for 10, 20, 30 years. I know I can learn there. I know I can learn from books. I know I can learn from other people, and I know I can learn from podcasts, from webinars.”

There’s the humility thing. The [inaudible 00:38:47] way to say it would be, “Get over yourself.” Don’t think like you have all the answers. I firmly believe that. With this business that I’m running here, this division for Worldpay that I’m doing, I certainly … I tell people, “It’s not predicated on the fact that Jimmy is a genius.” I don’t think I have all the answers, but I’m constantly searching for what other folks are doing.

That’s what I think a lot of the small business owners need to do is, I mentioned earlier, looking through that periscope. You’ve got to make sure you’re not always just focused head down on your business. You’ve got to have the humility to say, “I might be missing something here. There’s probably somebody who’s doing something better than me. I’m sure there’s a better way to do this,” and so you’ve got to make sure you take that time and say, “I’m going to go learn from somebody else.”

Now, if you get a hundred units of information, only three of them might apply to your business, there’s a better way to do it, but you’re better off having those three and applying them to your business than getting zero, and then the next quarter you’re going to get three more, the next quarter, four more, and who knows what you’re going to run into? That I’d say is the general best practice advice of me learning from the leaders and observing the leaders in this industry.

That’s what they do. The ones who have teams top to bottom who are really passionate about their customers and the business, they are the ones who really advance, and then the leaders of the business who are always looking for how they could do better and taking notes from talking with other folks and applying that to their business, they’re the ones who continue to grow and continue to increase their profits, their recurring revenue and actually lessen their headaches in the long run.

Doug Hall: Great advice. The folks that are listening to this may want to get a hold of you to learn about what you do, what Worldpay can do for them or just to get in touch, so what’s the best way for people to get a hold of you?

Jim Roddy: Sure. The easiest way is via email, and my email address is jim.roddy@worldpay.com, so J-I-M-dot-R-O-D-D-Y-@worldpay, all one world, W-O-R-L-D-P-A-Y-dot-com. I’ll also give you my phone number. I don’t mind folks calling me as well. I always say, even if you’re not a customer, I’m not going to hang up on you, and that number is 814-520-6342. Again, 814-520-6342. I’m always happy to talk to any business person even from any vertical because I always feel like there’s something that you can learn from someone else.

I’m fired up because basketball season is starting right now. I go watch my alma mater, Gannon University here in Erie, and I always make sure I sit right next to or behind the opponent’s bench and see what I can learn from those coaches as well, either what to do or what not to do from a management standpoint, so all sorts of learning opportunities. If someone picks up the phone and calls me, I’d be happy to share what I know, what I’ve learned by mobilizing the expertise of others, and I’d be more than happy to learn from you as well.

Doug Hall: That’s fabulous, Jim. Thanks. I appreciate your time today. This has been awesome conversation and lots of nuggets in there for people to extract, and thanks for generously sharing your contact info and offering to talk to folks, so thanks very much.

Jim Roddy: I’m happy to do it. Always a pleasure to talk to you, Doug.