Monthly Archives: June 2011

Recently the IT blog Channel Register posted an article critical of a recent survey by BackBlaze, the Online Backup company. The survey showed (duh) that hard drive prices were getting cheaper. In the article Tim Worstall asserted that by posting those results, BackBlaze were shooting themselves in the foot. But he’s British, so Tim said it in a far superior way:

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Pew Internet reports, “The number using social networking sites has nearly doubled since 2008 and the population of SNS users has gotten older.”

The breakdown looks like this:

  • The average age of SNS users has shifted from 33 in 2008 to 38 in 2010.
  • Over half of all SNS users are over the age of 35.
  • 56% of SNS users are female.

The report is filled with interesting nuggets, such as:

  • Facebook users are more likely to trust in others and are more politically engaged,
  • MySpace users are more open to opposing viewpoints, and
  • LinkedIn users have more diverse social networks than users of other sites.

While fascinating to read and identify with the above findings, marketers should truly pay attention to these stats:

  • Nearly twice as many men (63%) as women (37%) use LinkedIn.
  • The average adult MySpace user is younger (32 y.o.), and the average adult LinkedIn user older (40 y.o.), than the average Facebook user (38 y.o.), and Twitter user (33 y.o.).
  • MySpace and Twitter users are the most racially diverse mainstream social network platforms. However, a large proportion of users of “other” social network services are racial minorities.
  • MySpace users tend to have fewer years of formal education than users of other social network services, whereas most LinkedIn users have at least one university degree.

These demographics may surprise you, or they may validate your own assumptions about which social media sites are best to engage in a dialogue with your customers. In either case, the differences between the social media options are becoming clearer as the popularity of social media increases.

Make sure to gut-check your social media strategy with the tidbits in this new report. You can download your copy at Pew Internet.

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If you’re like me, you were a great technician who decided to start your own business. As your company grew, you learned to be a good leader by being the best engineer your company. But sales? In order to be a good sales leader, you have to embrace sales and drive the adherence to a sales process. Not easy when you’re a techie at heart.

The reality is that most IT solution providers suck at sales, so we have boiled down the essential ingredients for sales success to make it easy for you to catch up and even get to the front of the IT sales wolf pack. In our experience consulting with our partners, we’ve seen some partners who are doing some of these steps, and some who are doing none. A rare few are executing all five.

1. Set Sales Quotas: You can’t measure achievement when you have no goals. Sales people need goals to measure success and to enable you to evaluate and reward their results.

2. Enforce Opportunity Recording: Make sure your team records all of their sales opportunities in your system so they are easily track-able and actionable. Don’t let them keep it all in their head or in disorganized disparate systems.

3. Hold Weekly Sales Meetings: Conduct weekly sales meetings at the beginning of each week to focus your sales team on their action plan for that week. Regular public accountability is a powerful motivator. Small team or large, this is vital.

4. Make Sales Capture Easy: Opportunity is everywhere; sales data needs to be easily captured so anyone in your company who finds a potential sale can quickly relay that information to a centralized location. This includes client referrals and even the landing pages on your website.

5. Follow the Sales Process: Choreograph the sales effort of your team and use a repeatable process that includes the 4 other Sales Success ingredients. Follow the best practices and sales process that is built into your professional services automation tool.

Adding those five ingredients will help you increase your sales and profits while adding accountability for your sales staff. Salespeople can easily juggle 20 times more opportunities than they had before, just by following the process and seeing it all in one place.

To hear more about the secrets to winning sales agreements and key strategies for increasing profit margins, you’re invited to join ConnectWise for a free webinar June 22nd with MSP legend Gary Pica, as a part of our Success Wise webinar series.

David Bellini is president of ConnectWise. Monthly guest blogs such as this one are part of MSPmentor’s annual platinum sponsor program. Read all of Bellini’s guest blogs here.

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Within the SMB managed services market a multi-year debate has been raging: Should managed services providers develop price-per-user or price-per-device business models for MRR (monthly recurring revenues)? I heard a surprising answer to that debate during the recent TruMethods Schnizzfest event in Philadelphia, Pa. Here’s the answer and the background.

The surprise answer: Increasingly, some of the best MSPs user neither business model. Instead, top MSPs are pursuing a so-called “price per engagement” or “price per experience” model. Privately, top MSPs continue to figure out their per-user and per-device support costs, and then build in the appropriate margin. But publicly, those MSPs refrain from discussing per-user or per-device pricing.

Instead, the top MSPs offer a total services price — covering everything from help desk and NOC services to monitoring and management of IT infrastructure. Building on that theme, TruMethods CEO Gary Pica called on MSPs to stop selling ingredients (patch management, remote monitoring, anti-spam, etc.) and start selling chocolate cake (that is, the total user experience).

Hidden Numbers

During multiple sessions at TruMethods Schnizzfest, top MSPs described how they continue to generate roughly $100 to $130 per user per month in recurring revenues — without breaking out the individual per-service fees to customers. Moreover, several MSPs said that they no longer accept SMB engagements that fall below a minimum MRR (monthly recurring revenue) fee, typically $2000 or so.

Two MSPs who went on record:

  • White Glove Technologies CEO Tommy Wald, who said he’s using the price-per-engagement model to blanket small office customers. Instead of nickel and diming customers when they add a piecemeal service or a new managed PC, White Gloves’ contracts include a clause that allows the MSP to raise annual rates — roughly 3 to 4 percent or so.
  • masterIT CEO Michael Drake, who said he’s using the per-experience model. Although it sounds like masterIT still sells on a per-user level, masterIT no longer breaks out the price of each individual service. Instead, Drake pitches masterIT as a trusted advisor and/or virtual CIO to his SMB clientele. And for that virtual CIO service, customers are going to pay for the complete masterIT experience — rather than one-off services.

No Magic Bullets

Are all MSPs taking the approaches outlined above? Certainly not. During the TruMethods conference, plenty of established MSPs mentioned rising competition from aspiring MSPs that charge as little as $10 per seat for basic managed services.

But when low-ball or lower-price rivals emerge, leading MSPs like IT Solutions CEO Ted Swanson re-frame the customer conversation — pointing out that it’s impossible for aspiring MSPs to deliver high-quality service at low-ball pricing. When customers say a proposed price is too expensive, the best MSPs re-frame and re-set the conversation by stating: “Compared to what?” notes TruMethods’ Pica, himself a former MSP.

Once the MSP has pinpointed the customers’ frame of reference, it’s easier to re-set the pricing conversation and drive back to the original value and service delivery conversation.

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The results are in from Chief Marketer’s annual Interactive Marketing Survey, conducted between February and March of this year with 647 marketing professionals from both B2B and B2C.

Key insights into 2011’s interactive marketing budgets include:

  • The average allocation to interactive marketing is 25.2% of total budget
  • B2B marketers plan to devote more money to interactive than B2C (26.2% vs. 24%)
  • 30% of the overall marketing spend will go toward digital campaigns this year
  • B2B marketers are more likely to increase both their interactive budgets and their overall marketing spend than B2C

Strategically, the number one goal from interactive campaigns is to build brand awareness according to 79.2% of respondents. This is followed by driving consumers to website (61.5%), generating sales (61.0%), and generating leads (60.4.%).

What surprised us is that even though building brand awareness is the leading goal for their interactive campaigns, only 24.6% of respondents are measuring brand “lift.” This speaks to the power of brand and the renewed energy around brand building with the power of social media.

Other data points to note:

  • Email marketing has held steady from 2010.
  • Other mainstream tools such as social media (Facebook, LinkedIn), SEO, Twitter, Online Ads, Paid Search Ads, Social Media Ads, and Viral or Word-Of-Mouth campaigns are all seeing more use now than last year.
  • Top 3 leading niche-marketing tools are webinars, blogs, and online contests.

The challenge for us marketers has always been measuring how well our interactive marketing campaigns are doing. What are the metrics that we use to determine whether or not we are successful? Responses indicate the top 5 metrics being watched currently are:

  • Click-throughs (58.7%)
  • Traffic to website (53.3%)
  • Lead generation/user opt-in (43.3%)
  • Page views (38.3%)
  • Incremental sales (34.1%)

Yet marketers aren’t quite sure how cost-effective interactive marketing actually is. Those who think online campaigns are more profitable than offline declined nine percentage points this year (25.7% of respondents), whereas those who think online is less profitable than offline went up (9.3%). That being said, 29% of marketers simply don’t know if interactive is more or less profitable than offline methods.

What is clear is that any uncertainty about the ROI of interactive marketing is not making an impact on the pursuit of these key initiatives. Marketers across all industries agree that is far worse to be left behind than worrying about its cost-effectiveness right now.

Download your own copy of Chief Marketer’s 2011 Interactive Marketing Survey for more information.

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