Successful selling requires an understanding of the buyer’s mind, and most MSPs fail to develop a clear understanding of their customer’s true needs. Specifically, many MSPs don’t understand why buyers do — or don’t — buy from them. Great businesses take the time to understand their buyer’s psyche. Let’s delve a little deeper.
Generally speaking, I think most MSPmentor readers have been building their managed services businesses for five to 10 years. But what if you were building that business from scratch right now? Here are 10 steps to consider for startup MSPs — though the steps certainly apply to established MSPs that are looking to rethink their strategies for the second half of 2011.
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.
Steven S. Little (pictured), a business growth expert, is keynoting the Kaseya Connect User Conference today in Las Vegas. He’s onstage now, sharing the seven key steps for building a sustainable growth business. No doubt, the tips apply to managed services providers (MSPs), VARs and privately held SMBs. Here are the tips, straight from Little.
By Shannon Kavanaugh, Go-To-Market Strategies’ President
I was having a conversation with a business owner recently to help him determine how to bolster his revenues in this rocky time. As we were evaluating what his situation, a key problem became very clear. While he had gathered a lot of information from a lot of sources, it was not centrally located. Some data was stored on his computer in spreadsheets, some in sticky notes on various employees desks, and still more in salesforce.com or the accounting system.
I was reminded once again, that one of the biggest sales and marketing mistakes companies make is not capturing the information they gain in one central place–leading to lost opportunities, mistakes, and inefficiencies!
According to a recent study conducted by eConsultancy, only 35% of those surveyed report they collect data from different sources and store it in a single database. I realize it’s simply math, but that means 65% of you are operating from many different data sources, including that stack of sticky notes on your desk!
If everybody is doing it, or not doing it as the case may be, “why is it so bad” you might ask?
It’s bad because KNOWLEDGE is power. In many environments this is true, but never more so than in the sales and marketing arena. Whether you’re looking for more accurate forecasting, that “low hanging fruit” to fill the pipeline, or the right segment to launch your next campaign….you won’t be as successful without full integration!
SO, take the Spring Cleaning Challenge, gather up all your key data capture mechanisms (including those sticky notes, spreadsheets, and one off databases), design/document your sales process, and build a centralized location to house all associated information/data. You just might be surprised how knowledgeable (aka powerful) you are!
The author of “Escape From Cubicle Nation” talks about making the transition from employee to entrepreneur.
An incubator’s founder lures reluctant business owners “across the bridge” from job seeker to committed owner, often hearing, “Maybe I’ll just go back and look for a job.”
When VARs, MSPs and IT solution providers evolve their businesses to include a managed services practice, the goal is to deliver recurring services to ensure recurring revenue and recurring profit. While it’s not so easy as to convert to this model overnight, start by identifying an entry point to deliver managed services to a new or existing client and build your practice over time. Let’s take a cross-section of one year operating with this business model and discuss how you can build a similar practice layer by layer.
Naturally, the core of a practice is the managed services you deliver each day – from day 1 to day 365. While you are not providing every service to every client every day, you are monitoring, maintaining and managing your client’s machines, devices, and other technology infrastructure per the scheduled intervals of your agreement.
It’s common for an agreement to include installment invoicing, which drives recurring revenue –- the primary key to a managed services practice. If you commit to sending out monthly invoices before delivering the scheduled services, you drastically decrease disagreement of the invoice totals while increasing the probability your payment will be received before delivering services. Take it one step further like the most successful practices and accept automatic electronic transfers of funds (ETFs) or credit card payments, much like how you might pay bills in your personal life.
With the client’s payment made and your service delivered, schedule Monthly Operation Review (MOR) meetings with your client. The goal is to communicate what work you have completed during the last period to the person most responsible for daily operations, be it the service desk manager, office manager or possibly the small business owner. If you proactively deliver outstanding service so the client rarely experiences any incidents, they may not realize the quantity or scope of behind-the-scenes work to keep their technology infrastructure—and business—flawlessly operating. You also want to let them know you will do in the upcoming period. These MOR meetings are also the perfect opportunity to secure more work by talking about the needs and challenges in their business going forward, lending your consultative opinion and then presenting the solutions you offer.
In Quarterly Executive Reviews, arrange to meet with the business line executives to form a Business Technology Advisory Council and to discuss strategy. Depending on the size of the client, you could be meeting with the same people from the MOR meetings (and choose to replace every third MOR meeting with a quarterly review) or an entirely different group. The differing objective is to understand and focus upon their business: Does your client plan to grow, maybe offering a new service or opening a new office and hiring more employees? Demonstrate how your business will help them achieve those goals and assemble a business technology plan to be implemented at the beginning of next year. This plan builds your one-time revenue engagements, then adds additional managed services opportunities and ultimately rolls up to your revenue budget for next year.
To act on the business technology plan, your suggested solution may call for a significant amount of work and products. Minimize enormous upfront costs for the client and still provide the exact solution needed when they need it by administering a lease for the new hardware or offering Hardware as a Service (HaaS). The fixed monthly fee for an agreed upon term can be added to your existing managed services invoice, minimizing the accounting work for the client.
For ad hoc projects and unplanned situations, offer clients the ability to choose one-time services from your a la carte menu. For example, when hiring a new employee, the client can come to you first for the new desktop and handheld device and setup, instead of shopping from a big-box retailer or worse yet, your competition. Plus, managed services do not entirely replace break-fix needs, so your a la carte menu can include break-fix services too. This menu becomes the foundation for a catalog of services and products you sell. Publish it via an online storefront so both clients and prospects can view and purchase from your entire collection of solutions.
The last, and arguably underrated, component is training. Often, clients assume they don’t need any elective training and decline to add those items, even when implementing more complex solutions. Persuade your clients to take advantage of the training your practice provides by offering flexible schedules (like off-hours) and delivery methods (like webinars). Align your suggested training to the client’s products and software, and to conquer issues you discover during the MOR meetings. Training is a true value-added service that helps clients get the most—and the best—out of the solutions that you provide.
Each layer of interaction with your clients during a year contributes to your recurring revenue and profitability. A common entry point to building a managed services practice and model is the first sales effort with prospects, and meeting with executives to present your recommendations. Your first trial project could be remediating the environment to prepare for your support; then you bolt on managed services and engage into that first layer at day 1. But no matter your entry point, converting to this model with each client will bring you recurring revenue, recurring profits and recurring clientele for life.
Len DiCostanzo is Dean of Autotask Academy and Senior VP of Autotask Corp., developers of Autotask hosted professional services automation software, the VARStreet family of advanced quoting and e-commerce tools and Taskfire, a hosted service desk and ticket management system sold by IT solution providers for businesses of all sizes with internal IT resources.
In the classic reseller channel, sales and marketing back in the day consisted of hanging up a sign and waiting for customers to walk through your front door. That was fun while it lasted. Today, with the world becoming smaller and the marketing noise becoming louder, managed services providers like you have to fight through a whole web of marketing and sales options to make your impact. It is overwhelming, really. But don’t panic. Marketing and sales can be broken down into four major components. Here’s how to get started.
If you do a little bit in all four areas, then you can bring massive marketing success to your firm. If you miss one, though, then you’ll find that you’re playing catch-up with your competition. For this blog entry let’s take a look at each of the four fronts of marketing. And stay tuned for part two in February 2011 , where we’ll delve into the goals a marketing plan can focus on.
Now, the four fronts of marketing:
The first method is through the press. The marketing power that mass advertising brings, either by being written up in the newspaper, blogs, or other forms of journalism; or by purchasing advertorials in those publications can be huge. Google Adwords, guest blogging for industry specific blogs, billboards, and other areas where your company’s name can show up in front of potential prospects can be the quickest way to grow your business.
Companies have been developed overnight using mass recognition through news outlets.
Marketing through social media is probably one of the most misunderstood marketing methods in the world. Social media marketing is really word-of-mouth evolved. Successful marketers in the social media space have figured out a way to be interesting enough to get people to pass them on to their friends, business associates, and family. Getting the ball rolling can be tough, but the keys to success are consistency and creativity. This front covers things like Twitter, Youtube, Facebook, and more.
One thing I can tell you is that screaming “here I am! Listen to me!” will not bring the results you’re looking for.
I know that for myself I feel like once I make a customer I have that customer for life. But the reality is that once you have a customer you have earned yourself a right to sell to that customer a second time. That is all. Even if your services are monthly, it is important to continue to woo that customer consistently or else you will eventually lose their interest and they’ll discontinue service with you.
Many marketers refer to this front as upselling. It is important to know that the most lucrative marketing you can ever do for your business is to market to people who have already become a client of yours at one point or another. If someone believed in you enough to open their wallet, you can bet they will do it again given the right opportunity.
So someone heard of you through one of your many marketing efforts. Not only that, but they actually reached out to you! Not just that, but they actually are interested in what you have to offer! This moment is where most sales are blown. Companies are too busy/slow/stupid/insertyourownexcusehere to recognize the opportunity of a new lead and fail to take advantage of it.
The result? A lost sale.
Hey, it happens to the best of us. But it is important to build a “sales funnel” to bring people from “hey, I’m interested” to happy customer.
Without a marketing plan in place for each front, you’ll find gaping holes in your marketing strategy and will need to work double-time to cover for the loss.
The good news is that it is simpler than it sounds. It is simply a matter of learning to structure your marketing interactions and making sure that you do at least one thing on all four fronts (focusing on prospects and clients more than mass marketing and the social media world) to help grow your business.
I’ll be continuing on this train of thought over the coming weeks as we delve deeper into what marketing is all about and how an IT business can develop and implement a marketing plan. In the mean-time, though, I’d love to hear from you about ways that you have faced any of the four fronts in your business? Any neat tricks or ideas you’ve implemented that brought new customers or income into your business?
One of the things which I loved to do was use SendOutCards. SendOutCards allowed you to send treats like brownies to new clients with a fun or fancy physical card welcoming them into the fold. This was a fantastic direct to prospect marketing strategy that had great results. It made new customers feel very excited about working with me, and the card ended up working as advertising when they hung it up in their office where their customers could see it. The brownies never hurt either!
Stay tuned for part two, where we’ll delve into the goals a marketing plan can focus on.
Dan Kolansky is VP of sales and marketing for Virtual Administrator, which offers low-cost, highly effective hosted solutions for Managed Service Providers. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor’s annual Platinum sponsorship.
If not, there are things you can do to improve the way you communicate.
It gets down to a common problem with many small-business owners; they really don’t understand the basic principles of accounting, which means they don’t understand how much money their companies are really making.