Boomtown has been tinkering with innovative business models since inception. When Boomtown first arrived on the scene they recognized that cloud POS companies, for the most part, were selling directly. Founder and CEO, Chip Kahn, saw the early stages of the market developing, “It was clear to us that real world businesses were transitioning to SaaS solutions.” In many cases these POS providers wouldn’t have local support resources so Boomtown acted as Uber for physical support, dispatching local IT specialists to service tickets from POS companies who couldn’t be there themselves.
Boomtown cleverly curated data from these support interactions: every issue was a learning opportunity. Amassing a giant training set, Boomtown turned machine learning loose. Now, Boomtown is standing on top of a machine learning platform that has been trained on brick and mortar support data across restaurant and retail industries.
We believed from the start that the unique technology product challenges in this market would require a data driven approach to effectively resolve the inherent sales, activation, and support challenges over the long term.
Chip Kahn, Boomtown founder
When Boomtown first launched their software it was focused on ISOs. Chris Dorsey, Boomtown’s VP of Sales and Business Development described the rationale, “Forward thinking ISOs were early adopters of value-add solutions and are not focused on technical support, providing a win-win partnership to gather product insights.” As the software learned from the speed of payments deployments, Boomtown found itself moving upmarket to larger payments providers. “Product support problems are universal and, in fact, only become more acute as large portfolios transition to SaaS-enabled solutions across locations that are distributed geographically.”
The platform’s success can be credited to machine learning and the Pareto principle. It turns out that 80% of support tickets really do stem from 20% of the same issues: the data was just sufficiently large that it took a machine to connect the dots. The advantage? Supporting customers just got much cheaper.
Point of Sale and Payments technology is absolutely critical for these real world businesses; they need real-time support but can’t afford enterprise-level support agreements. Through machine learning and automation, Boomtown’s platform gave ISOs the ability to cost effectively support increasingly complex technology.
Chip Kahn, Boomtown founder
Why lead you on? Because Boomtown is now releasing their software to VARs. “VARs have long been the mission critical front-line implementation and support providers for the industry. It’s past time that they have innovative tools to empower their evolution and growth,” says Dorsey.
If you’re a reader you’re no stranger to our drum-beating that resellers must evolve to survive. The days of hocking overpriced hardware and charging through the nose on support for your unstable POS systems are gone.
But the reality is that VARs still have a finite amount of time. Stated simply, VARs can either sell, or do; a VAR can go acquire a new account, or they can support an existing one. Every hour a VAR spends supporting an existing customer is an hour that VAR isn’t generating new business. And since VARs aren’t exactly overflowing with cash like a payments processor, this is a shitty situation.
Boomtown can improve this reality.
The best way to think about this is the below graphic.
Conventionally, as customer count went up support went up (this is especially true if you sell legacy POS systems). The beauty of AI is that it can learn from data and troubleshoot problems, allowing your support organization to scale far beyond expectations with even fewer resources. Boomtown has already baked in a lot of this AI learning into their software, allowing VARs to take advantage of AI on day one.
Here’s a case study to show you what we mean.
The business proposition is pretty clear: do more with less. Oh, and because Boomtown isn’t run by a bunch of morons they’ve figured out how VARs can roll this out as a monthly recurring service with 30% margins. “We wanted to align with the way resellers take other offerings to market and ensure we provide margin, as well as solutions that enable VARs to focus on growing their business. VARs can close more deals, make customers happier, and fill a critical function gap,” says Dorsey.
This needs to be a critical distinction. Many small VARs believe support is 100% margin (because, like the merchants they serve, they put a $0 value on their time). But guess what? Not only is this mathematically incorrect, it’s also dangerous. If you’re a VAR and you’re not out there winning deals, eventually the cloud companies, selling directly, will own all your merchants.
VARs need to embrace software and transition their business models to survive. Boomtown helps them do so. You can find Boomtown at RSPA’s Retail Now conference in San Antonio at booth 240 or reach them here as well, rpowell [at] goboomtown.com.
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