Escape the free-advice MSP trap once and for all

What the heck is the MSP marketing funnel?

Denes and Myles discuss the top, middle and bottom of the MSP marketing funnel and how it relates to the buyer's journey through your marketing process.  Understand what type of marketing works at the different levels. Follow these steps to learn how to define your buyer-personas so your marketing efforts directly target your ideal customers.

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Demand generation with funnel websites
BY DEREK MARIN AT SIMPLE SELLING
Watch this interview with our MSP inbound marketing guide, Derek Marin, to win over new prospective clients by finding best practices that will transform your website into a tool that shortens sales cycles and increases close rates.

Get out of the MSP commoditization trap

One of the more common problems we see IT managed services providers suffer is increasing difficulty with the commoditization of services and differentiation within the industry. There are three factors involved here that we need to understand and manage to solve these problems. 

Differentiate yourself from your competition and become sales ready

Problem 1.: Our prospects are seeing fewer visible IT problems

Even ten years ago not only was Windows XP less reliable but so were servers and the internet in general. These are not generating problems anymore..the average CEO doesn’t have "technology issues" on their agenda.

So our traditional marketing and sales efforts are no longer effective. Even referrals are not coming with the same frequency lately.

Problem 2.: Our Value Proposition is limited

The MSP value proposition is designed around peace of mind - keeping your lights on, managing your technology so you don’t have to. The entire value proposition is reflected in the challenges of managing that technology. We can embellish and enhance, but that is the core value every managed services provider is delivering. All our discussions tend to come back to proactive maintenance, anti-virus and managed devices.

Problem 3.: Communicating MSP value proposition is a dead end

The ability to market the service by appealing to technology awareness is diminished and the industry is saturated. Prospects have fewer IT problems with their IT infrastructure and there’s no room to move sideways to look for new IT infrastructure territories. Too many fish in a smaller pond. Trying harder is not a solution, nor is tweaking your delivery.

A few smart folks in the Business Model Generation group made an interesting observation, of service companies who see these problems we’re facing and start to look inward to develop new services. This, they found, is very ineffective. Instead they thought: what if we first understand the problems of the target market - their pains and wishes, and then try to figure out how we can solve their problems. Once we have these in mind we can start developing IT services.

Check out their cool Canvas tool. On the right-hand side, you see a traditional CEO's job, their pains, and the gains they are after. As it was when a CEO had visible IT problems, as service providers on the left, we have been able to solve their pains and offer services to reach their desired gains. It is a very simple formula to connect our services to their needs, so it’s called the Value Proposition Canvas.

If we really take the time to understand our clients and prospects we can quickly see they actually still do have IT problems - they just aren't as obvious as they used to be.

First and foremost they usually want to grow and to be more efficient. They see their hurdles as lack of productivity among their staff, for example, and as in need of immediate solution. But while every business is looking to grow sales, they don't see these as IT-related opportunities. They see these as general business problems.

Here’s where we can excel! If we try to figure out how we can help their business problems using IT solutions, the whole conversation starts to change. In reality there are many solutions to their business problems. A new CRM or improved reporting and adoption by staff through proper training, or some improved collaboration and internal communication could ease their pains. Sadly all too often some or all of these solutions do not exist in our particular service stack.

Right now nobody is there to connect the dots - find the problems, look for opportunities and manage the implementations. Their internal resources cannot do this and most consultants and IT companies aren’t either. There may be no shortage of skilled experts, but nobody there to manage the solutions.

If the solution for them is to be more IT savvy and do better implementations, and to better use their existing environment and become more productive, we have to find out how we can deliver this value to them, and this is what a virtual CIO is doing. This is the Value Proposition of MSP 2.0.

The idea here is that unlike the MSP 1.0 model, where the Value Proposition is limited in scope to IT infrastructure problems, here we can solve any business problem. This value proposition is thus UNLIMITED. We can now differentiate our vCIO services by vertical structure, size, business problem, or any other metric.

Free yourself: why fight the same limited dead-end MSP 1.0 battle. We can elevate our conversations and solve the problems that really matter to clients.

Why do most professionals charge for advice while we MSPs do not?

Isn't it a bit perplexing that doctors and lawyers can ask for $400 per hour for any and every consultation, but IT service providers are too shy to ask for $200 for their expert advice and often just give it for free? Why is the highest possible value MSPs give to the clients so devalued? Let's investigate this discrepancy and check out a couple quick tips for a solution. We are going to take a cue from Dentists.

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

There are many hurdles for IT service providers selling IT consultation. There is a lack of definitions of boundaries between these services, no expectation about what’s included in a package and what’s not, whether it is project based or ongoing, sales or consulting, and so on. This poor service design and impromptu handling of custom questions leaves us little or no margin on vCIO services.

Do you remember ever selling an MS Small Business Server with Exchange, SQL, File server, and other add-ons? That could easily have been a $20 000 - $30 000 project with servers, licenses, and upgrades. Would we give away our advice for free to get the deal done? Sure. We made a sizeable markup on the devices, licenses and project overall, so it was common practice to include advice. It was an entirely viable model at the time.

However this is no longer feasible for MSPs, so new philosophies need to be created to charge for our advice. MSPs have created a "vCIO" term and put it into the agreement as a line item to highlight some consultation on the service side.

While this makes sense, it’s only the first part of the fix.  Delivery of the services is still a challenge for most IT managed services providers. As this is an increase of the price for the client, MSPs are losing to competitive pricing from lower quality providers.  

Clients engage us for quality service, and seem to need a CRM, so we start working, expending time and resources to produce an evaluation and suddenly they change their mind. Sound familiar? We’re stuck in the one-phase model, where remuneration came with the project.  We need to create a channel that dissects the concerns of the client into phases for which we can charge.

We have to slice it up like the dentists.  

Dentists are the perfect example of channeling your problems into phases they then monetize in a big way. Once you’re in the channel, you’re likely to stay in it.

Phase 1:

ou have a toothache - you go to a dentist. You expect a free check up and that’s what they do. Then the dentist informs you “You know I see some problems, but we’ll need to x-ray to get a clear picture. It is going to be $250, but it’s our best bet to see what’s going on.”

You say, “Go ahead…”

Phase 2:

Back with the x-ray the dentist, nodding sadly, tells you there is an enormous hole in your right upper 2nd molar. It’s probably going to need a root canal. It is still somewhat hidden but definitely nasty. Unfortunately, they cannot say for sure until he opens the tooth up. It’s your decision...at best it will be around $400 to do, but if it is a root canal, it is $1.500.

You say, “Go ahead.” 

Phase 3:

Turns out it is a root canal, but you’re comforted that at least you don’t need an implant for $5.000. You’re so glad you have paid only $1.750.

Now let’s turn this analogy onto our industry.

Phase 1:

“You seem to have a CRM/Sales issue... Let's have a brainstorming session with your team. As you know, your contract includes 2 brainstorming sessions every quarter, and this is just what they’re made for.”

You do the exercise, and it turns out there are problems with their current CRM...nothing is working, there is no valid data, etc.

“We can see where your problems are at this point, but we have to investigate further...have a meeting with the vendor (tech issue?), see how people are using the system (human problem?). After that, we can give better advice. It would be a couple of hours with the team and a couple of hours with the vendor, and also a couple of hours with a CRM specialist. I estimate $1500 to clarify the problem.

The client gives the go-ahead, because the pain exists and they haven’t the expertise nor the tools needed.

Phase 2:

We conduct the investigation and it turns out that the current CRM is obsolete...not supported; not cloud-based, etc.
“What we can do is to evaluate a better system. This means sitting down twice with the team to define requirements and put together three scenarios with three different systems that can be integrated with their accounting package. We would create an implementation plan, as well to roughly see the costs of that project.

“It will be around $2000 to put it together” we offer.

The client says “Go ahead. We’ve already come this far, I want this solved.”

You can charge for each next consultation phase with a clearly defined delivery goal. Instead of being all-encompassing and all at once, we keep it real, and let them make decisions how they want proceed. Also, some clients aren’t going to want to pay for this, so we are cutting our losses earlier and not wasting our precious resources. Many clients will see the value in what we do, if we can establish and communicate this process.

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

Convert a business problem to an IT problem with ease

A basic truth of sales is that you need to associate your services and products with the pain-points of your customers, so that what you offer is thought of when those problems arise. IT managed services providers are selling high-level concepts when the client has manifesting pain-points: slow server, slow internet, outages, severe duty service, etc. But what can an MSP do for a client who doesn’t recognize the snags and hurdles they have? Let’s take a look at an easy 5 minute solution to this problem.

Your clients have their own jobs to do - generating more revenue and growth, reducing costs, enhancing operational excellence, HR, and so on. These are the concerns that the owner/CEO/president wants to see fixed.

Our job is to identify the pains within these concerns and ease them. We can easily find some around these areas: most business leaders experience issues around growth, competition, staff and managers. Where they see an obstacle is where they want to find a business solution.

For example, business owners once were fraught with IT technology problems. It was slow, unfunctional, and poorly serviced. It slowed their growth, inflated operation cost, and dragged down efficiency, so these CEOs solved their business problem by subscribing to Managed Services.

Unfortunately that means now IT is so problem-free for most companies that they’ve stopped seeing it as a business problem. They have reliable internet, often all the software they need, and stable workstations. IT is not hurting the company goals anymore, so it’s no longer on the agenda for most leaders. This is causing managed services providers some sales issues.

Ok, but we also know they are far from getting maximum positive results from Information Technology. There’s a lot of room for improvement in their reports, communication is somewhat distracting, and collaboration is usually weak. They have the necessary tools, but most aren’t using them to achieve much competitive advantage.

What if we stop asking our customers and prospects IT related questions, and try to find their real pain points? As we’ve shown, they’re no longer incorporated within IT services.

At least not directly....

Consider the idea of business growth. Growth calls for more sales. More sales can be achieved from new clients. Of course acquiring new clients requires processes, and processes can be automated with a CRM.

So there is an IT related solution here, but it is not directly attached to a pain-point, and the chain of connection from that point to the logical IT related answer is longer.

If we start with the pain-point, we can get to the logical IT related answer sooner. This process is the consultative sales process, but it requires a lot of skill to master the questions and guide the conversation.

We’ve seen patterns - of business problems and IT solutions matching indirectly - so we’ve created a process that gets from the pain to the solution faster.

This is what the "IT Competitiveness Graders" do.

Little surveys ask questions about potential business problems in a very relaxed way. The client answers yes or no for several named problems. After the survey, with 6-10 questions, we can see how many problems they have in various areas. We attach a little hint and some available education for every problem they identify, and give them a general score. In this case, they can "Grade" themselves in a variety of business concerns.

Let's check it out live, (it’s much easier), with an example Grader on productivity.

Take the grader to see how it works  You’ll receive a report with your grade just as your clients and prospects will.

There are questions on meetings, collaboration, managing emails, files, among others. These are business tasks. The client is able to review their scores and the potential issues. We’ve now converted their business problems to IT problems with IT solutions.

We can also use the graders on our website for prospecting. Salespeople can send them over to qualify clients. Account managers can use them before quarterly reviews to collect business problems. You can use the Grader scores and information in meetings to elaborate on the subject and make it a business solution - skip the IT part, nobody really cares. If we find the pain, we can fix it with a solution.

To put it simply...ask business questions and then turn them into IT solutions.

Proactive Customer Development: Leverage your QBRs

Most IT managed services providers are quite proud of how proactive they are, especially in terms of technical services like maintenance, antivirus, warranty, etc. However, if we look at their client's IT savvy, operational maturity, and  IT enablement, this is less true. Here are four easy tips to leverage Quarterly Business Reviews and implement the proactive mindset on a higher level.

If you do Quarterly Business Reviews (QBRs), you can start working on these items immediately. If you’re not familiar with the term, just imagine you’re sitting down with your clients regularly for an informative and engaging business meeting.

1. Preparation for the QBRs

Skip the infrastructure based preparation for now. Let's concentrate on their business instead. Check their industry, and consult with a couple of people...try to understand their pressing needs right now. It can be sales, marketing, cash flow, internal processes, anything that is not IT. For an easy introduction to this conversation let's use the business conversation tool from our free MSP 2.0 Quickstarter Kit.

Here’s an example: check their LinkedIn profile. Is everybody from the sales department using LinkedIn? How many connections do they have? There’s a chance they are not big on business social media. Let's download some intelligence about LinkedIn and social selling and put together a 5 minute session for the QBR.

Let’s add more: look for Slack as an online collaboration hype. Sidekick is a nice sales automation tool out there. Check out Do.com for managing better meetings. Let's put those items on the agenda as HOT products... see what they think and have a conversation.

Sooner or later they are going to read about these software somewhere. If they get important IT based information from somewhere else, our position is redundant. We have to be the center of relevant knowledge on business IT.

2. Implement a killer agenda

Prepare a real agenda. Send it before the meeting, leave room for curiosity, and plan for it to be 60-90 minutes. Use do.com and demonstrate a well-organized meeting with a kick-ass tool. Put business issues into the agenda like "Suggested solutions for pressing needs: sales, marketing, cash flow." Include items to ensure we do not just talk, but act: "Clarifying the deliverables for the next Quarterly Plan," or "Review of IT Productivity Initiative."

It may even sometimes sound trivial, but you need to present it with a proactive mindset. We do not want them to have to ask us about training their users, or what is hot out there. We have to act before they find out about so many opportunities they could leverage from somebody else. We need to be the fountain of great information. Keep in mind you can use this one agenda, with custom modifications, for every client for the given quarter.

3. Forget Bomb reports

Bomb reports and infrastructure reports are fading into the past. Now we are on top of the game, and they should not have any critical issue with support. It can be mentioned in passing that every possible gauge is green and not to worry. They are paying us to keep them green. Don’t forget that customer behavior, motivation and problem awareness has changed dramatically. There are still of course companies out there without decent infrastructure. For them the traditional IT reports are a must, educating them and setting expectations. But sooner or later we solve those problems so we have to move forward. If their IT maturity grows, we have to adjust our reports as well.

There is a better way to use business type gauges: Graders, and Opportunity Sheets. These tools put together checklists on clients’ use of best practices, processes, and so on. We just check whether they are being used, and we can come to a conclusion whether they are working effectively.

For example, we check for productivity and ask about emails, best practices, file sharing, searching for documents, version control, etc. In just a few minutes they have a grade on a scale from 1-5. If they are missing three points then we let them know we should have a talk. Believe me, they’ll be much more interested in that than in expiring warranties and quotes for the replacement of devices that are working fine.

4. Campaigns to release peer pressure

Prepare for a campaign every quarter and your MSP sales and development goals can skyrocket. Imagine this: June is the month of security. We do benchmarks sets for every client who signs up as well as teach best practices, prevention for users, basic safety guidelines, and do a Disaster Recovery Plan with 30% discount.

The idea is to make sure everybody is on board. It’s easier to make it a campaign and do 10 DRPs with a discounted rate rather than selling individually. Also, it is easier to communicate the campaign through emails, and brochures.

Every month or every quarter, you need some unique flavor to show them your skills.

If you are a pro, you can create batched events for that. For example, classroom training, seminars for managers, users among your clients, launch-and-learn sessions for executives. Let's lead the community. When people see their peers working on the same things, they can feel more urgency to take action, and are often more actively involved in solving the problems rather than just discussing them..

Conclusion:

Change the conversation: be proactive about their business, not just their IT infrastructure. Let's move and shake them every quarter and create a community of IT savvy executives who you can lead to progress. If you do, your client base will give you the necessary growth without extraordinary new customer acquisitions, and your referral engine will fire all cylinders!

The 6 Reasons MSPs Tend to Over-Deliver

One of the most common laments we hear from IT managed services providers is over-delivery of too many different services. They feel they serve their clients more than needed and the services go unused by the clients. Account managers end up doing more IT consulting than they should, demands for IT consultation are unlimited, and the IT company invests time on IT projects that never start. Here we delve into the root of the problems and learn what to do about them!

Clients will start with questions like “What is the best application for this problem? Why are people not productive? How do we manage various IT related vendors?”, etc. However most IT companies do not have the right model for IT consultancy, and try to address those needs without a viable revenue model.

The result of over-delivery is diminished return on service investment. Not only do we do too much but at the same time we set unreasonable expectations with the client. We teach them that we do it for free, or that any request is covered already, and that blocks our ability to implement a profit model, if we even have one.

Let's quickly see the six causes of over-delivery and review a solution.

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1. No Boundaries on Services

We have clear boundaries in regards to traditional tech related IT services, but the clients have new needs. IT Management related issues like application deployments and cloud transitions are increasing.  Deploying Office 365 to a small business office is more of a consulting job than deployment now. MSPs are missing a best practice for creating boundaries of what is included in the traditional service package.
 

2. Mixing Sales and Consultation

In many cases we do a IT consultation to sell something. They are interested in centralized management of IT, and we teach them about virtualization and all sorts of technologies to help them. What we do is IT consultation, but because we are selling the IT projects, we do not ask for it separately. This is fine until we close most of the projects and make money, but sets a precedent that we do free IT consultation.
 

3. Mixing Project Management/Implementation 

Another fault in doing free IT consultations is that in most of our future projects we do not deploy anything in the technical sense. We keep doing the projects, but there will be less billable technology work. The client doesn’t separate the different types of work - a SaaS CRM integration (we do not deploy a server, just manage the project) from an On-Premise ERP update (we upgrade the servers that are behind, then implement the project). On the one hand we have to make money for the consultation and project management (because there is no tech related work), on the other we generate revenue by utilizing engineers.
 

4. Mixing Account Mananger and vCIO

Our account managers tend to manage the account health and satisfaction loyalty. Most of the time the job is about solving a technology based problem related to our services. However, clients do not naturally differentiate what is related to our services and what is not. Our account managers are thus likely to do additional consultative services as well (and often not realize it). In this sense, they are operating as a mini virtual CIO and managing the accounts IT related issues. The problem is that we do not charge for this service. Again we’re teaching them we do it for free.

5. No Clarity, Definitions, and Alignment

The contracts and other legal items of the engagement may not be suitable for managing a dynamic and adaptive service. The technologies and client needs are changing faster than those formulas. We usually need to adjust to the client’s real needs a lot after we start the engagement, so even if we have a solid contract on the service side, it needs to be flexible throughout the process. After a while some contracts can even become obsolete, unable to serve the common ground with clients and our services.

Another factor is that some clients signing these contracts do so blind. They do not take the contract apart word by word, but just trust the service provider. In most cases they were referrals, and this can cause a misalignment in expectations.
 

6. Lack of Processes 

Over-delivery can be caused by poor execution. We do not have well defined processes in place for consulting work, or if we do, they are not put into practice. It causes vague capacity plans, which we usually overshoot. We are not following best practices, and we tend to work on the same issues repeatedly, spinning our wheels and not moving forward.
 

Thoughts Toward Solution

We will consider a couple of ideas and thoughts about fixing the problem.  This is not a comprehensive description, rather just some ideas that will lead to the solution.

Act on the Changing Client Need

A change in the operations or processes of a client is an excellent opportunity to create a well-defined and entirely separate service offering for IT management and IT consultation.  We should separate the service, so everybody can understand why the traditional package does not have these items. We can still assure the client about what is in the background but if they have a need for more IT consultancy, then you can serve them in a better way outside of the MSP contract. We all have problems upgrading clients to something they might see as included in the service.  We need to have a clear new service with a very professional approach, and deliverables that have clearly visible impact. Reduce how often they assume “this is included.”

Create Boundaries with Mapping 

Mapping out the clients different IT management needs helps to craft services with boundaries. The client's CEO may need some ‘CEO coaching’ and you give them three 30 minute sessions, one in person and two on the phone. They may need to work on their processes - a ‘Process Efficiency Workshop,’ and you give them one meeting per month. They need more training on the infrastructure of what they have, so line up an "IT Enablement Training series" every two weeks with different topics. Each session needs to be a step to solving the problem rather than a series of attempts to make the entire accomplishment.
 

Standardization and Customization 

The great thing about LEGO is that you can build anything with standard blocks. The result is customized while the parts are generic. The same idea is behind creating standard workshops, brainstormings, and teaching sessions. You can teach your organization how to do them. Your clients have different needs, and you can solve those needs by using a custom mix of standard blocks of services and deliver the series of standard elements as a custom result. Of course this is where the mapping of defined boundaries can influence selection of these modular blocks.  You can craft your best offering based on standardized, tested methods.
 

Project Management is the Product

Project Management is usually misconstrued as a by-product - not the real goal, but to get results, we need to do it. If we turn this idea around and make Project Management a product, it helps us a lot. This means we first need to educate clients about the value of well-rounded project management, and we have to make it more tangible.  Implementing an easily put together productive Project Management method is crucial.  These methods help determine and define the deliverables which are needed in their service. The automation behind this can cause additional benefits like more clarity, reporting, etc; however, most of the PSAs (Autotask, Connectwise) have project modules and they do not give us any Project Management Frameworks to use. We have to have our own and implement it within our professional services automations project modules. 

Well Crafted Packaging

We can use a well crafted virtual CIO package with deliverables and processes to offer a service with clear outcomes and deliverables in a scalable way. The packaging has to manage all the changing expectations with all the needed tiers involved. The packages need to be a monthly recurring subscription like your MSP package and at least an annual commitment. Craft an annual delivery plan for the client showing all the deliverables solving their problems, guiding strategy, and exploiting opportunities. This will help them see the goals and what you do to help them achieve them. You can put some to work upfront, as well as have monthly and quarterly recurring tasks, and have fully budgeted hours for the year.  In this case, you can measure profitability the same way as you do for the MSP. 

Conclusion 

A profitable consulting business faces the same challenge as a beneficial MSP service - expectations of management and processes. The problem is common among managed services providers. The IT consultation is less tangible than the tech-related work. It is trickier to demonstrate the tangible deliverables of consultative services that are the basis of our profitable vCIO services. Designing services with clear outcomes crafted in a structural way is a critical first step.

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4+1 Website Sins Preventing MSPs from getting more leads

After talking with dozens of IT managed services providers and analyzing more than 500 MSP websites, we have a pretty clear understanding why the online marketing of MSPs has been broken. If you are reliably and predictably generating the right leads then you can skip this - just check the short MSP website grader at the bottom. Otherwise stay tuned and read this short article.

Before we start, we need to establish one thing: "Clients we desire do not have IT problems anymore."

If they have visible IT problems, they are not good for us. Why? Well, if in 2015 a potential client has not been able to find someone who can take care of their basic IT needs we have to watch out. They either have not been able to or have not wanted to spend on IT.

Our best customers are the ones who understand IT and want more services because they think technology can deliver value to them.

The only way we’ll see qualifying prospects with visible IT problems in a given department is when the IT provider has been dropping the ball continually, and we all know this is happening less and less frequently.

Most potential clients have solved the MSP 1.0 problems: infrastructure, networks, devices, virtualization, and some cloud. We need those people because they want to move forward. These are our "best potential clients." Unfortunately, they have solved the traditional problems with someone else, but that does not dictate that they have to continue to solve their next challenges without us.

If we agree on this, we can now start analyzing why our current websites are not working.

First Sin: Tech content instead of business content

Tech content makes us service techs . It was great when people needed those tech people, but now they need more intelligent, trusted advisors, and IT consultants (even if they don’t know it). Now the client's problem is not that the server is slow, but how to integrate the whole ecosystem, how to get out better information out, and other non-technical issues.

Your current website is talking about technology if there is a visible support number, a dazzling picture of fancy servers, or your Microsoft Golden partnership.

It demonstrates the wrong value proposition. It shows that if they have an IT technical problem, you are the best candidate. Of course you are, but you should not limit the value proposition.

Your potential value proposition should be: my company will make you more competitive. Your clients hardly think a better server will help them beat their competition, so the content should focus on business, talking business lingo like cash flow, finance, sales enablement, collaboration, etc; If you think this way you may be surprised how much more effective your website and social media campaigns can be.

Remember, your prospect is not the office manager, but the CEO of a potential company. A CEO who has successfully solved the MSP 1.0 problem, and yet does not know anything about the new wave of services about IT management.

TODO: Change your value proposition to something more modern, better reflecting needs now and in the future.

REFERENCE: Check out the MSP 2.0 value proposition blogpost about ways of communication.

Second Sin: Talking about me instead of them

Most IT managed services providers are talking about themselves. Just look around, check your site. My services, me, our team, our skills, partnerships, certifications, our support hours, our 24/7...

Nobody understands MSP services better than the CEO of the MSP, whereas most of the support people do not understand the concepts, whys, and the service offering. Further most clients have only glanced through the services and signed the contract without understanding the details.

Our MSP website is not there to educate them; it is there first to create desire and engender action, and secondly to give them the necessary information to support the decision.

Problems and opportunities drive curiosity and desire.

Problems include the changing workforce, control of the workflow among people and in collaboration, communication breakdowns, too many emails in the inbox, broken processes, and lack of automation.

Opportunities include increasing better customer satisfaction with customer loyalty application, faster sales cycles with well implemented CRM, and better information distribution with online dashboards to name a few.

These topics can help you develop the stories about your clients you discuss, assuring them that they’re being understood. Through social media, you can get much better traction with that style of communication.

TODO: Change the conversation from us and our services to them and their goals, opportunities, and problems. 

REFERENCE: Check the marketing library for infographics and ebooks you can use for engaging conversation.

Third Sin: There is no Call To Action

Most of those 500+ MSP websites we analyzed do not let the prospect go through a natural process. The site does not help them get to the right content, show them value, get some interest and then let them make the next step. 95% of the blog posts made by MSPs have no clear Call To Action.

The blog is an investment of time, skills, and commitment. It is created for a reason. Managed services providers run business blogs with business goals and, like the blog you are reading now, they serve a purpose. You read it to get the concepts that hopefully prepare you to move to the next step. The next step is to move forward by clicking one of the Calls to Action and to discover more about the topic. My duty is to create a text that you like, and give you that next step. Of course, that next step has to be followed by another next step.

Another issue is that IT companies are often driven to seal the deal as quickly as possible. They give the prospect 3 to 4 hours to evaluate a strategic relationship. They send a 2 to 20 page offering contract, assume the client understands everything and is immediately qualified to move forward. This process is not suitable for a trusted advisory relationship; only to evaluate a simple process.

Putting together the issues of the lacking next step and the rush to close we see are missing a natural process in a short sales cycle - it gives us the chance to change this practice at once.

The Calls to Action have to be relevant to where you are, what you see and to your prospect's persona. Most managed services providers have a Call to Action which is general to all. Free consultation or free network assessment is not compelling enough to somebody who is not ready to buy. We all know these are sales calls. We need some softer approach to nurture the prospects. From the prospect’s point of view there is no visible IT urgent pain right now. Our thoughtful leadership and our business content is the key to moving forward.

The process has to ensure we get to know each other and that they feel they want to try before they buy, but we do not need to give anything away for free. We have to give them a chance to slow down and work together before they commit themselves..

TODO: Plan a natural buying process as a prospect and implement the proper Call to Action to support it.

REFERENCE: Check lead magnets that are little tools you can implement onto your site for this reason.

Fourth Sin: Assuming they get the idea

No. They do not. They do not understand how unproductive they are, how much time they are spending in meetings without follow-ups, or proper documentation of the tasks. They do not know how much information there is in the system that could help them make better decisions or enable their people with the right collaboration tools to kickstart productivity. They do not understand how technology can make them a better, more profitable, cooler, more agile, valuable organization.

They think IT is infrastructure elements: their desktops, plug-ins, network devices and servers. Of course, these have nothing to do with the topics we’ve mentioned.

Your role is to enlighten them about the huge potential competitive advantage IT can be.

One way is to educate. It is good for the people who are interested and thoughtful to understand how IT can be more than just devices. They can access information like ebooks, blogs, articles, etc;

The other way is to challenge and involve them in a conversation. Make it interactive and present a current problem and let them measure how they are performing and how much they know about the topic. This is a more involving element needed to break away for the status-quo indoctrination of IT. We have to inspire them, but not necessarily convince them right off; just make them curious to learn more.

To learn more from us personally, join a webinar, workshop, or 1-1 session to meet with a thoughtful leader - the guru who knows what is next.

TODO: Create interactive discovery tools for the prospects to dig into the topics on their own and at their own pace.

REFERENCE: The little surveys called 'Graders' are designed to ask questions and let them "grade" themselves and get scores about different areas of their business.

Bonus Sin: No automation, no systems

Very few managed services providers are using marketing automation. One reason is that these are expensive tools, and it’s a fair amount of work to put together the necessary automation. However, these tools are necessary to engage the clients in the long run.

The prospect may come to our website for the first time because of a Pay Per Click ad, a reference, or more likely following some interesting content. They come and check things out, and sign up for something easy to get like an ebook, or to solve one specific problem, subscribe to our blog or just complete a little Grader, calculator, or download an infographic. Then they leave. Of each hundred visits only a small percentage will follow through to any higher engagement. Without automation none of the rest will ever come back.

If we want to have a more predictable sales funnel, we have to nurture leads. If we send back regular emails regarding where they;ve shown interest - not sales filled emails, but email courses, more ebook offerings, invites to webinars, lunch and learns, your LinkedIn group, and your community, they will respond more favourably.

The nurturing approach is a great tool once they are in our MSP sales process. Our MSP marketing communication can help our sales resources. They can send more relevant content to the prospects during the process, helping them solve some problems in a general way, showing the talent of the company and earning trust sooner.

TODO: Set up workflows and marketing automation that compellingly nurture the client.

REFERENCE: A couple of ideas about why marketing automation works for MSPs.

Conclusion:

These five sins stem from one root: how MSPs have traditionally sold services when flawless IT infrastructure was scarce. If IT infrastructure is the only commodity this model doesn’t work. Addressing this problem is not a daunting task or a large investment though: MSPs just need to reframe themselves first and then start reframing their clients so IT is not seen as a commodity but a great potential competitive advantage.

You can participate in the MSP website benchmark to see how your site is performing regarding traffic, social media, and rankings. Also, you can get insights into how your website compares to your competition locally. We need you and your competitors URL and we do the analysis for you. Sign up for the Private Workshop now!

The 5 Levels of vCIO Operational Maturity

The Operational Maturity segmentation makes a lot of sense when trying to understand where to go with vCIO services and which next possible steps to take.
It demonstrates the current maturity of services in a descriptive way, explains the differences, and provides hints and tips toward the next step.This article demonstrates how to proceed as a virtual CIO with respect to levels of operational maturity.

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vCIO Operational Maturity Level 1

The virtual CIO in its most fundamental version is an ad-hoc advisor for IT infrastructure needs. If the general MSP service does not contain this particular service, the service provider needs to have a high-level managerial discussion about the IT infrastructure.

In order to be able to sell higher level projects and services, the delivery could be free advice, or it could be based on a very limited charge. It could be initiated by the vendor (as a solution opportunity), or it could be proposed by someone on the client side (via problems).

This service does not contain any level of regularity nor a disciplined approach, however, year ends and quarter ends could be excellent opportunities for these types of reviews and conversations.

• Goal: readily available advice on IT infrastructure
• Regularity: ad-hoc
• IT/management focus: 80% - 20%
• Time investment per year: 1-5 hours
• Challenge: how to charge for the service
• Value proposition: a better understanding of the infrastructure

vCIO Operational Maturity Level 2

For more mature IT managed services providers, getting only ad-hoc and free advice prevents a business from being profitable. A more structured method is needed to add service to the fixed MSP package.

Remote monitoring and centralized services are a huge step toward efficiency, but limit natural meetings and face time with clients. The motivator for these companies is seeing their trusted advisors more in person.

The structured approach means annual IT roadmap planning and quarterly business reviews. These meetings aim to bring the MSP services to the table and discuss opportunities and problems with company leaders.

The limitation of these services lies in the IT infrastructure focus. The MSP does not concentrate on other aspects of the business — IT solutions, services — but on the IT infrastructure.

• Goal: create a structured layer of IT infrastructure management
• Regularity: annual, quarterly
• IT/management focus: 65% - 35%
• Time investment per year: 5-10 hours
• Challenge: to engage the clients in the IT infrastructure conversation
• Value proposition: to help the client to get more from their infrastructure

vCIO Operational Maturity Level 3

The limitation of the IT infrastructure focus is preventing the MSPs from becoming trusted advisors in both IT and the business. The Quarterly Business Reviews lack client engagement, real business value, and push toward the MSP for an IT infrastructure specialist role when the IT infrastructure becomes a commodity.

MSPs realize that customers need IT management in general because their IT complexity has increased. It has created a void in leadership roles in mid-sized organizations.

To fulfill this role in this maturity level the IT companies detach the vCIO services from the MSP contract and focus. The vCIO service becomes a separate service focusing on the whole IT instead of just on the infrastructure. It is a general management role in the IT discipline rather than a high-level role for the IT infrastructure.

It is a very structured approach to annual, quarterly, monthly, and weekly cycles and processes. The cycles define the roles and services of the vCIO with responsibilities and documentation..

The primary focus of the vCIO is to raise the IT management maturity with policies, regulations, education, and productivity of the system, finding general solutions to the different problems and implementing those accordingly.

• Goal: help the client take advantage of their current opportunities
• Regularity: annual, quarterly, monthly, weekly
• IT/management focus: 50% - 50%
• Time investment per year: 25-40 hours
• Challenge: separate the service from the Managed Service contract and mindset
• Value proposition: help the client utilize IT for business

vCIO Operational Maturity Level 4

This level of maturity of mid-size clients requires a proactive way to leverage IT in order to promote operational efficiency, continuous improvement, and lean operations. These clients need a more IT-savvy, agile workforce. It requires a more mature vCIO service, where the vCIO is focused on process, management, and business. They use IT as a resource in order to build a better company. They take a proactive view of internal and external collaboration, communication, the analysis of process bottlenecks, and the reporting needs of managers. A big part of the job is finding bottlenecks and developing a viable, integrated solution, getting confirmation of the proposal, and implementing the solution.

The vCIO focuses on operational excellence with ongoing and project-based services. This requires more time and business application focus. Though many jobs will be done locally many others are sourced on a global scale, and creating and managing the solutions marketplace is significant.

• Goal: help the client take advantage of their current opportunities
• Regularity: annual, quarterly, monthly, weekly
• IT/management focus: 35% to 65%
• Time investment per year: 35 to 60 hours
• Challenges: scale the vCIO service, adjust to the business model
• Value proposition: to build a better, more efficient company using IT

vCIO Operational Maturity Level 5

In level 5, the objective is to influence the general strategy of the company and gain a competitive edge with technology. A new product line, different sales distribution channel, or game-changing technology are new ways of monetizing company value. It requires extensive industry knowledge, a vertically-related solution stack, and a high level of consultation skills. It focuses on technology and IT-related strategies and therefore has a limited scope and room to play. Usually, knowing what is hot in the world of technology and the implementations of those solutions could leverage opportunities for clients.

The execution is the second issue. Finding opportunities is one thing, however, often these initiatives are hard to manage, involve multiple disciplines, and need substantial project management. That is why at this level the vCIO needs to have greater capacity to deliver value. Most of the time customizations, custom software, and application development are necessary for success as these nascent solutions and products are not yet proven or mature.

On the other hand, to implement and make successful projects, a higher level of IT maturity is needed for the client as well. The vCIO has to educate the company and make sure the general knowledge set is present, so that the team is able to adopt new technologies successfully.

It is the highest possible added value for the business.

• Goal: give the client a competitive edge with technology
• Regularity: annual, quarterly, monthly, weekly
• IT/Management focus: 20% - 80%
• Time investment per year: 60-120 hours
• Challenge: focus on technology-related solutions instead of general management
• Value proposition: competitive edge with technology

Remarks

Managed services providers have to move sequentially from lower maturity to the highest maturity. It is not possible to start at level 4 without having the practice and experience from the preceding levels. This rule applies to the clients as well. The customer has to be mature enough to be able to adopt projects and initiatives at the higher levels. The higher the maturity, the more vCIO work is needed, not just for the projects, but to manage the documentation, policies, and more complex environment.

The MSP contract has to be separate from the vCIO contract from OML3. If the two services are one, it means the vCIO is MSP-focused, and it is OML2, regardless of the skill set and richness of the service. The biggest hurdle is to move from the OML2 to the OML3. On one hand, it is a separate package, pricing, and service. On the other hand, the business and consultative skills are as important or more than before. This could require new skill sets for the company or extensive education in consultative skills.

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Build your MSP with the help of virtual CIO services

Colin Knox is a true entrepreneur in the managed services provider industry. He’s been operating a very mature and well-polished boutique managed services provider in Calgary, Canada.

He’s also been recognized by Penton Technology Group in the ‘MSP Mentor 250’ which lists the best of the best managed service provider executives, entrepreneurs, experts, coaches and community leaders.

Colin’s service philosophy involves helping people grow and to that end giving them a chance to learn and develop into virtual CIOs. His business growth focuses on high level services.

In the interview I tried to learn how he was able to put this together.

I was interested to learn Colin has just exited from the day-to-day operation a couple of months ago and is dedicating his full attention to a very interesting project. I honestly did not realize the full impact of this before our talk.ortance of this before the talk.

If you’re interested in learning the stories and real-life examples from somebody who’s made it, watch the video and grow your business! Then use the 9 decisions worksheet in our MSP 2.0 Virtual CIO Service Delivery Quickstarter Kit to begin your transformation to a modern MSP.

Use the 9 decisions worksheet in our MSP 2.0 vCIO Service Delivery Quickstarter Kit to begin your transformation to a modern MSP.