How Slack app can be a revenue generator for your MSP

Last week we went through how we can stop giving out free advice and making consultation a revenue generator. Let’s see that in practice. Our example today is Slack app, the latest silicon valley unicorn (1B+ valuation). Slack, in most cases, is a free tool designed to enhance your internal communication. So how can we as cloud service providers deliver value and earn revenue with this great tool.

Customer Segment Profile

First, we need to understand a problem most of our clients have. The sector of the industry we’re focusing on now is companies whose teams work together on processes, projects, and collaborating with both vendors and clients.

Jobs to be done: Like so many other aspects of modern life, most of them need to deliver more value with fewer resources.

Pains: Typically they communicate over email, getting 100 or more emails a day, without a clue as to how to handle this volume. They cc each other excessively just to keep everyone in the loop, and use a host of applications like Project Management, CRM, plus service automation, and so on. Even these are mostly cloud based, with no integration, so every one of these systems needs to be checked separately if they want the whole picture.

They’ll also try out new apps on a weekly basis in their search for solutions, install a few, run the 30 day trial, all while not having the time to properly evaluate them - and like Sisyphus’ rock they keep finding themselves at the bottom of the hill again.

Gains they are looking for: They want an overall improvement in their communication each other, vendors, and clients, so they can focus on their work instead of emails, and would love to get answers, reasonably quickly, from a system, application, or from each other regardless of location - in the car, office or at home.

But they’re already too busy...the last thing they need is the added task of creating this solution. What’s missing is someone to listen to their issues, understand them, figure a solution, and then not only implement it, but also train their people and support them in the learning curve so that they can get back to the business of their business.

We’ve observed that this is quite typical. even though we know the tools are out there...they just don’t get used or aren’t implemented and trained properly. That’s nothing new to us in IT: Owning tools is easy...finding the right one and using it properly is another matter.

Value Proposition Map

Discover how Slack with the proper consultation and implementation can help them achieve this communication improvement.

Gain Creators: As a product Slack helps teams communicate within a single space. This can happen in private channels, one to one communication, public channels, you name it, and it can manage topics according to need. It also integrates with thousands of applications, and so ususally gets the sought after information from disparate sources without logging into those applications. In essence it creates a unified platform for company-wide communication and replaces internal emails almost completely.

The tool is the first step. Also required however is the creation of the business case, context, and the process to properly implement it, training users, creating basic policies and enrolling the entire team and the company overall. Of course we could leave them to do all this on their own, but our value proposition is to make this process successful from the get-go. This is actually more important than the tool itself.

Pain Relievers: Teams are now working in all kinds of venues and access the information from a myriad of devices, anytime, and anywhere. They always have to share files and documents with each other. Even with cloud based file sharing it’s a time wasting task - to copy / paste the links, then use another app to send. Another problem is after sharing, nobody’s aligned on where the file came from, and have to re-check the email to access it again. Slack eliminates this speed-bump entirely, leaving the file in context, and with its robust search engine, one can find it easily with any other system of communication.

Still, most users will have questions, and Slack doesn’t have real one-on-one support that incorporates an understanding of their business context...it’s rather more general help on features. Our support can fill this gap. We’ll often be able to offer our technical skills in integrating many other applications into Slack - a not so obvious task. We can be the ones to make those integrations work and enhance them over time.

Product & Services

The ultimate solution for the opportunities / problems of the client is a Slack Implementation Project.

• Needs assessment
• Project kickoff
• Implementation
• Project management
• Training
• Documentation

Because this implementation project is largely common among all who would have it, it can be templated easily, so from our perspective is streamlined. A Slack implementation project in this sense with initial consultation, implementation, technical set up, training and initial support can fall into a $2500 - $3500 range. It leads to an additional MRR for support and subsequent enhancement projects.

Marketing/Sales

The best way to market this is with an eBook or a Grader. You can see an example of a Slack grader here. It asks the following questions from the client:

We can quickly score their answers and see whether Slack can be useful to them to show, try, and implement. It can lead us to a quick product tour and a kickoff meeting for the needs assessment.

Delivery

The delivery part is a canned project with

• Project Plan
• Process descriptions, hints and tips
• Pricing and packaging document, contract, agreement
• Task lists for the milestones
• Tasks for the necessary deliverables
• Meeting memos, agendas to manage the project efficiently
• One-page checklists for the discovery meetings
• Presentation decks for education/training
• Basecamp.com live client facing workspace with everything necessary to facilitate smooth communication with the client

Conclusion

Slack is a great tool, and boosting the tool with our implementation services is a big hit. Clients will understand that we’re no longer just a general infrastructure service provider but a real business ‘wingman’ or ‘wingwoman’ for them with respect to the creative use and implementation of technology solutions. It ushers us into the trusted advisory role and helps us reframe our clients to see that IT is not just cost-savings, but a huge competitive advantage.

Transform your MSP sales approach

Branden Baker, President of Integration Technologies from Hawaii is a modern Tom Selleck. He shares a story about the transformation of his IT sales approach.

His team had not been able to close any managed services provider deals for more than a year. But he got involved in the virtual CIO conversation and after only a few weeks he landed his first monster six-figure deal. 

START GROWING WITH MSP SALES RELATED RESOURCES FOR FREE

5 KEYS TO GENERATE, QUALIFY AND CLOSE MORE SALES
Have you ever wondered why you struggle to communicate your values to your prospect, why prospects stay with their current provider even when they’re not happy, you have a hard time closing deals that weren’t referrals, or you just can’t find a way to consistently close sales? This recorded webinar with our MSP sales expert guide, Mark Woldman, will show exactly where you are going wrong and help you develop a plan to move your sales forward. 

CLOSE MORE DEALS WITH A PREDICTABLE AND REPEATABLE MSP SALES PROCESS

Watch this interview with our MSP sales expert guide, Mark Woldman, to win over new prospective clients by finding best practices that will help your MSP become Sales-Ready. Here you’ll learn key concepts and practices that will move your sales forward!

Break Your IT Sales Barriers with Ian Altman

We are starting our "MSP 2.0 bestseller" monthly book review. We want to start strong, so the first book of this series is the new consultative selling holy bible, Same Side Selling. The co-author, Ian Altman, CEO of Grow My Revenue, is a sales visionary, bestselling author, Forbes contributor and keynote speaker.

While speaking with Ian it became clear he knows how to win the hardest battle IT managed services providers have ever faced: commoditization of the IT infrastructure services and the resulting price pressure, shrinking margins, and the lack of differentiation from competition.
One of our MSP 2.0 movement members suggested I read the book: Same Side Selling - A Radical Approach to Break Through Sales Barriers. He had told me that this is 100% aligned what we do in the Managed Services Platform IT Consultative Sales program. I read it and I was flattered. Most of what I’ve read on the subject involves large complex concepts, but this book was very simple, very practical and quite an eye opener. I think everybody who’s a little serious about MSP 2.0 should read his book.

You can read his articles each week on Forbes.com. If you do a search in business trends, he comes up #1. Business luminary Seth Godin recommends Ian’s latest bestselling book, Same Side Selling, as one of two must-read books on consultative sales. Ian is host of the Grow My Revenue Business Cast. He started, sold, and grew his companies worldwide to values of more than one billion dollars. 

I had a chance to chat with Ian last week and he was able to carve out time with us for a quick interview. The fun part is that he knows the industry well, so we had a great chat. I am not going to try summarizing the interview, as I think it’s better to just hear him for yourself.

Thanks again to Ian. Check out his webcasts at his website: http://www.growmyrevenue.com

12 mistakes most MSPs make with their Virtual CIO services

The Virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature MSPs who believe they have a functioning Virtual CIO practice, on closer inspection, still show challenges with delivery, scalability and profitability.

While we could go in depth to identify the root of these problems, instead here we'll highlight the twelve most common mistakes MSPs make with their vCIO. At the end of this article there is a questionnaire where you can measure yourself against other MSPs.

#update - We released this blog a year ago. This is an updated version covering the latest developments. It seems that the MSP 2.0 community was able to solve most of the issues during the last year. These mistakes now can be prevented. It has been a long year, for sure... :-)

Virtual CIO Strategy, Transformation Planning:

Mistake #1. Packaing the MSP and vCIO contracts together

Selling the vCIO built into the MSP contract makes you Virtual CIO of the IT Infrastructure. In this there are two pitfalls.

First, the vCIO capacity of the contract does not scale with the size of the organization like the other IT company related services do. It scales up with the complexity, changes and developments of the clients. That means ball-parking a user based price for a Virtual CIO is unlikely to be appropriate. This results in either the price being too much for the market (they don’t want to buy it), or the contract being more work than revenue supports (you don’t want to sell it).

Second, creating a solid offer on virtual CIO involves capacity time with a very expensive resource. That makes the MSP offering more expensive compared to the competition. For the client, the results and benefits of the "vCIO of the infrastructure" do not make much sense. Customers are apt to compare prices ‘apples-to-apples’ between competing IT managed services providers but rarely are the service offerings that comparable.

Virtual CIO can deliver a major competitive advantage. It needs a separate service offering with a distinct pricing strategy.

#update - Working with clients around the world, we have designed a smooth transition from vCIO Light to a real vCIO services. That means even if you packaged together, there is a way out. 

Mistake #2. Not creating the necessary budget to get results

Let's say we have a 50 seat "sweet spot" client set up with the needed virtual CIO core services like: yearly, quarterly, monthly and weekly cycles. This could eat up 70 - 170 hours easily with automation. (We refer to the virtual CIO here as a general one taking care of every IT-related business aspect: reporting, management systems, applications, budget, vendor management and so on.)

If you use a base $150 hourly rate it could reach $2.000 service price per month or $40/user. Your MSP contract simply does not have the space for that.

Further you do not have the necessary processes or approach for that, and you can’t afford that much time, so you under-deliver on your promise of virtual CIO. This damages the concept and the possible future of the service.

Again, if you are not able to create the viable budget for the monthly recurring service fee and communicate the value, either you do not profit or don’t sell the service.

#update - there is a formula now for calculating profitability regarding virtual CIO services, the services and service delivery processes, as well.

Mistake #3. Not using a framework to develop the system

The vast majority of the Managed Service Providers we’ve been able to talk to do not use any framework for their virtual-CIO-related activities, so they don't have a system in place to successfully deliver them. Instead they operate as "consultants" or arm’s length managerial resources for infrastructure-like projects.

This means they are not able to implement a standardized IT management structure with proper plans, documents or databases that align services across the IT ecosystem. Nor are they able to streamline communication of the duties, tasks, deliverables and responsibilities of the virtual CIO correctly. This makes it hard to achieve the expectations of the client for the role.

#update - a complete structure is ready for the various vCIO activities like Planning, Project Management, Education or Execution. The closed loop vCIO cycles have been completed with Annual, Quarterly, Monthly and Weekly cycles.

Demand Generation

Mistake #4. Not attracting the right audience

Demand generation needs to target the right audience. The virtual CIO job is best suited for companies with 50-150 office workers. If the MSP wants to target a 20-30 or even a ten-seat client, there will likely come a painful realization of the lack of interest and of financial background. Those in higher tiers are left to figure out some system for managing IT. We can go there, but with coaching and support, as a complement the CIO or the IT manager.

#update - content and tools to qualify visitors are now available, like graders, ebooks 

Mistake #5. The wrong content

The partner of the virtual CIO is not an office manager, not the CFO or COO. The partner of the virtual CIO is the president/director/CEO - the top-level manager of the company. We know that placing this role that high is a challenge for the average technology-oriented service provider, like most Managed Service Providerss, but it needs to be there.

Most CEOs are not interested in backups, new MS Office versions or the cloud in general. They spend their time on increasing cash flow, boosting sales, organizing their companies, servicing their clients, and developing their management team. The MSP’s marketing content has to reflect those perspectives and turn those opportunities into solutions supported by IT.

This content has to be consistent across the website, emails, blogs, calls-to-action, in lead-nurturing drip email campaigns, in LinkedIn and other social media communications and in marketing collaterals: ebooks, guides and whitepapers.

#update - business related content is available in different formats like graders, ebooks, emails to quickly put business content to the MSP website. (even a complete Weebly based canned MSP 2.0 website is available now for early adopters)

Mistake #6. No clearly defined buyer’s journey

The buyer's journey covers the process that a prospect follows, from the first access of content to becoming and remaining a client. While a lot of MSPs have a decent website with a blog most of these blogs lack a call to action - no next-steps for the prospective customer, such as a downloadable e-book on the relevant topic.

These websites talk about available services instead of highlighting vision, possibilities and opportunities. The sales meetings are wired not to serve the clients and create instant value, but to "qualify" the techs - a focus on our opportunities instead of theirs.

The lack of a well designed buyer's journey will fail to attract the right prospect (the CEOs) to the website and assure them they will find the kind of service that will focus on their opportunities. The content needs to attract, engage and interest the right prospect with the wide scope on the business - make them eager to initiate contact and get a demo or have a meeting with the MSP.  

#update - various lead magnets have been developed to convert visitors to leads

Sales

Mistake #7. Not using consultative sales

Consultative sales is all about selling solutions. In solution selling our approach is not geared toward what to sell to the client. Instead we have a process to ask the thought-provoking questions that reveal overlooked opportunities and potential benefits. It is a process of discovery, of business opportunities where the MSP's solutions can help achieve their vision.

Virtual CIO is not a boxed product so it doesn’t have a standard price. Deep understanding of a customer's business is required before the solutions can be presented. Selling without context and understanding will put the virtual CIO in a very ineffective position, making it difficult to manage expectations.

This method is slower and takes more time, but necessary for engaging the client and crafting the offering within their business context. However exploiting business opportunities, and supporting them with technology solutions will mean more and higher value sales.

#update - consultative sales questionnaires, scoring, reports, targets, benchmarks and help are available for making the consultative sales easier

Mistake #8. Not selling the vision with stories

The virtual CIO's purpose is to make the client’s business more competitive in its marketplace, with the use of technology, to drive more revenue, cut costs and maximize the business continuity.

These general terms have to be in the context of the client and industry; we cannot really engage the client without selling the vision of competitiveness: being a better company, producing more revenue, and surpassing their competitors.

To sell the vision we have to craft compelling stories that grab the imagination of the CEOs.

#update - storytelling process for the first meeting with presentation slides have been created to help telling stories

Mistake #9. Not confronting reality with numbers

The reality of the situation - the hard data on the current state of business maturity, people, systems and numbers - sets the tension of the proposition. This tension helps make the buying decision.

The “score” needs to be readily attained and easy to understand in order to be compelling. That is why a business IT questionnaire that measures a company’s competitiveness with IT is a must. Without this, even if the vision is clearly defined, there are no quantifiable parameters to achieving it.

Imagine having a vision to run a marathon: a good start would be a full physical assessment. Make clear how hard you have to train, the time frame and the resources you’ll need to accomplish your goal.

#update - graders & new questionnaires are ready to get real with prospects and clients

Delivery

Mistake #10. Not using vCIO tools like automation or collaboration

Most IT companies are trying to use their existing PSA solutions like Connectwise or Autotask to manage their virtual CIO activities. It just doesn’t work, period. Again, the MSP 2.0 virtual CIO does not just focus on infrastructure. The virtual CIO has to manage people, processes and systems while communicating with the team, vendors and customers.

Most virtual CIOs do not have an integrated approach to managing all their activities in one place, or a system in which they can store all the IT management-related documents, memos, projects, databases, plans, budgets, and so on. Missing an integrated platform wastes a lot of valuable time for the virtual CIO.

#update - Basecamp integration is ready to collaborate with clients & vendors

Mistake #11. No clear differentiation between onging and project activities

Just as maintenance teams are separate from project teams because of different utilizations, focus, experience, etc.,  so should be the virtual CIO team.

One virtual CIO needs to manage the core virtual CIO cycles, like yearly planning, quarterly activities, monthly follow-ups, reports, weekly meetings, and so on.

An average virtual CIO could manage 10-18 clients, depending on the complexity of that focus.  Another virtual CIO has to manage the individual projects separately. It needs a different personality, different skills, tools and different daily and weekly routines.

#update - separated process for ongoing vCIO s     ervices and Project based vCIO services are available with templates and Basecamp workspaces

Mistake #12. IT-related service instead of business-related service

In a quarterly session, discussion should include questions about the client's cash flow, marketing initiatives, sales performance, internal projects, and competitor's moves first.

Then it can become a session with reports on the execution of the IT strategy, the quarterly plan, and the plans for the next quarter. It should not be focused on the technology roadmap or IT-related issues, problems, and challenges. It has to be focused on the business, processes, numbers, and business terms.

This can be difficult - there are so many cool IT projects an MSP can propose to a customer - however the conversation needs to remain about the business benefits and business accomplishments.

A successful CRM project is a great example. It highlights the improvements on sales collaboration, alignment, processes and results, instead of talking about the features of the technology solution.

#update - application related services (like Implmenting Slack) are available and also Business Modeling and other cool business focused workshops

Summary

Please check for these possible flaws in your practices. To improve on those, we strongly suggest signing up for the MSP 2.0 Quickstarter Tools. It has the tools to market and deliver the virtual CIO role right. If you would like to know more about the modern vCIO approach, let’s check this page.

#update - thanks for the contributors, our team and all clients to put this all together. A year ago it was just the mistakes, now the MSP 2.0 community can prevent those mistakes! Thanks guys!

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

Closing 11 Virtual CIO contracts in 3 weeks

Greg Tanner from Denver is a maverick, no question about it. His “Technology Quarterback™” slogan has become a meme among the MSP 2.0 community. We spoke the other day and I am still speechless. He started crafting this vCIO offering back in June, piece by piece, and started selling it in early October. Since then he’s closed 11 virtual CIO contracts with over 20K MRR! In this video, Greg shares the secrets to these amazing results. Be aware, he has very strong opinions about MSP 2.0. (Even stronger than me - Haha!)

I shared this video with some of our Members a month ago and received great feedback full of inspiration and praise for his efforts. A big THANK YOU to Greg for sharing his thoughts with us!

Greg’s approach is somewhat disruptive, but very effective. Grab your seats and get ready to take some notes. This is going to be an intense ride!

Delivering Business Focused QBRs

ADAM WALTER AT VIRTUAL C

You would like to be a high-value business partner in your client’s eyes rather than a basic technology service provider. Your QBR process is a critical part of influencing their engagement up to a higher level. Watch this recorded webinar with our vCIO expert guide, Adam Walter, who has shared his 5 step process to make any technical QBR into a business-focused one.

6 Best Practices of Top Performing vCIOs

ADAM WALTER AT VIRTUAL C

Watch this interview with our vCIO expert guide, Adam Walter, to learn how to be more engaged with clients by finding best practices for becoming a trusted business advisor in 6 single steps.

 

10 ways MSPs are leaving money on the table

Keeping up the margins for IT managed services providers is getting harder and harder. The competition is catching up and while needs of the clients keeps growing, the price still seems to be dropping - and many IT companies are making a practice of leaving money on the table. Let's look at 10 things you can fix to prevent losing money every day.

1. Having no CTAs on your site

How many MSP Blogs have great content but nothing to do? Even if the prospect likes the content; that’s a dead end. There are no next-steps or call to action; no way to download something or move further into a workshop or webinar or launch a module and learn.

$$$ - invest in having visitors and do not convert leads

2. Talking about how cool you are

The website should be about the clients and how they can benefit rather than descriptions of ourselves, especially on the main page. You have to grab their attention and quickly engage them. Focus on talking about their IT problems, issues and challenges and the potential solutions.

$$$ - lower conversion rate on your site

3. Talking about IT

IT talk is for IT people. Business people are looking for business talk. If you are talking about Office 365, or Virtualization or the Cloud, you are going to lose their interest. Talking about margins, productivity, process management and salesforce automation is how to keep the attention of your prospects.

$$$ - lack of differentiation puts you in the herd

4. Offering consultation on the first page

Very few visitors will be engaged enough on the first page to book a meeting with you. They are probably open for discovering solutions to their issues and reading informative content. Only then should you move toward getting their email address.  First nurture the relationship - after this is established you can start talking about a potential appointment for a meeting.

$$$ - feels too salesy or pushy

5. Pushing the Network Assessment

In the good old days, prospects were begging for the Technology Assessment, and you were even able to charge for it. Now, however, most IT systems are robust and the assessment is no longer required, so making that in the central feature of the sales process can be lethal.

$$$ - not closing deals

6. Having only one service package

Yes, in 2008 there was only one iPhone - now you can buy three sizes in four colors. Client expectation is rising as the industry matures. Limiting your prospects’ choice to one offering is preventing your them from becoming clients.

$$$ - not closing deals

7. Building the Virtual CIO into the MSP packaging

The surest way to squander the potential of the Virtual CIO revenue stream is to bundle it together with the MSP package. It downplays the value of the Virtual CIO to just a tech advisor doing tech roadmaps and warranty notifications, instead of capturing the opportunity to maximize their competitive edge.

$$$ - eliminate margins and give free advise

8. Developing Virtual CIO practices in-house

Development of Virtual CIO service offerings requires strong management skills as well as a lot of trial and error to get it just right for the specific instance. Developing it in house eats up the time of valuable resources and can lead to dissatisfied customers during the development phase.

$$$ - huge internal cost and time investment

9. Executing Virtual CIO without structured processes

Executing Virtual CIO activities without repeatable processes requires highly skilled people who, even if they can be found, will be asking for a fee. Teach one smart person the vCIO processes and give them tools to help them to deliver value to your clients in a profitable and scalable way.

$$$ - no margin for vCIO services

10. If it's not broken, din't fix it

This is an adage that is misapplied to this industry.  It is misguided to think nothing has changed and there is no sense of urgency around this change. Complacency has brought down many large, otherwise successful organizations in the past. Taking commoditization lightly can cost you your entire enterprise in the end. Take advantage of this new standard and turn your organization in the right direction, fast.

$$$ - fix a broken business model instead of changing it

Conclusion:

The MSP 2.0 movement is catching fire and re-energize the commoditization of traditional MSP services. The traditional MSP marketplace has changed a lot, and without proper strategy and actions it can damage any IT service provider.

Take action and learn more about the MSP 2.0 movement.

Cold calling best practices with Carrie Simpson

Carrie Simpson, Founder and CEO of Managed Sales Pros is the one and only MSP Cold Calling guru- an expert on what drives tangible results. Though we are very much focused on the inbound marketing side of lead generation, we cannot deny the potential performance of cold calling.

I was really interested in her best practices in getting leads over the phone, and surprised by some of the hints and tips Carrie shared with me. She talks on how to overcome call reluctance, how to build a winning script, and how to best manage the time investment.  

Differentiate yourself from your competition and

become sales ready

If you have not done cold calling before, or you think your approach isn’t working, just listen and learn how you can fill your sales pipeline. Mixing the MSP 2.0 message with cold calling can build your revenue funnel faster.

START GROWING WITH MSP SALES RELATED RESOURCES FOR FREE

5 KEYS TO GENERATE, QUALIFY AND CLOSE MORE SALES
Have you ever wondered why you struggle to communicate your values to your prospect, why prospects stay with their current provider even when they’re not happy, you have a hard time closing deals that weren’t referrals, or you just can’t find a way to consistently close sales? This recorded webinar with our MSP sales expert guide, Mark Woldman, will show exactly where you are going wrong and help you develop a plan to move your sales forward.

CLOSE MORE DEALS WITH A PREDICTABLE AND REPEATABLE MSP SALES PROCESS

Watch this interview with our MSP sales expert guide, Mark Woldman, to win over new prospective clients by finding best practices that will help your MSP become Sales-Ready. Here you’ll learn key concepts and practices that will move your sales forward!

5 ways MSPs can leverage Business Model Canvas 

Business Model Canvas has been a very hot management tool recently. Personally I have created 100+ Business Models over the last couple years for clients and for our companies. One of our companies is even a "Use Case" in the Hungarian edition of the Business Model Generation Book. We have developed different ways for IT managed services providers to use the tool for different reasons. Let's take a look at 5 practical ways to leverage this tool.

If you do not know the tool, check it out here: for books, apps, online learning and so on. You can watch a 2 minute introduction here: 

The idea of a Business Model Canvas is visualizing and simplifying complex things. It’s divided into nine key building blocks of the business, and uses sticky-notes to put elements and content on the Canvas. You can visualize an existing business model, brainstorm around it and also develop new business models.

As MSP leaders, vCIOs should have this tool in our toolbox for different types of workshops. The tool is perfect for leading and facilitating a conversation about the client's business, rather than their technology. It helps us be part of a business discussion and cut the tech talk.

Upsell your clients with strategic QBRs and IT strategy meetings

1. Understanding your client’s business

Many IT companies put too much focus on the infrastructure of their clients and neglect the need to understand their businesses. If you have a Quarterly Business Review, let's bring the Canvas and go through their business. The Canvas has many helpful features that ensure you won’t get lost - the worst that can happen is the client rambles on about their business, and trust that you understand them. You can add this little event to the onboarding process as well, so every client has this experience from the first phase.

One of our clients in Louisiana used this tool to meet the CEO. The Internal IT Manager was the gatekeeper and did not want them to contact the management directly. The IT Manager was not able to answer such business-related questions, so The Business Model Canvas provided the chance to go back to the Board Room again and talk to the CEO personally.

2. IT Strategy Meeting

When we create an IT strategy we need a clear understanding of the business context. The Business Model Canvas is a great tool for us and for the client to brainstorm. If for example "Fast Delivery" is one of the client's value propositions, the canvas helps focus on their need for process automation or collaboration tools.  If their priority is to get the clients closer and increase the personal touch, why don’t they use advanced Project Management and CRM tools?

One of our clients in New Jersey has done the Modeling, and the main initiatives of the Business Model Canvas went into the IT strategy directly. Their main focus went to IT, because they felt the virtual CIO was able to manage those initiatives.

3. Discovery Workshop

Of course every MSP is playing the commodity field now. Differentiation is key when we want to land a new client. Starting off with a Business Model Canvas is going to generate confidence in the prospect's mind. No IT company out there is doing such a workshop. They’ll feel they’re making a real business connection while also talking to a tech expert.

One of our clients did that and the client response was: "Geno, you are the first service provider ever who has asked us such questions. Most of them just checked our server room." He landed the deal right there!

4. Business - Technology alignment with the IT Management Canvas

Our consultative sales process has an IT Management Discovery tool called the 7C IT Management Canvas. The shape is the same as the Business Model Canvas, but we have IT management and IT technology related content inside. We use a questionnaire that we complete with the prospect, and score them across several different dimensions. It is 100% compatible with the Business Model Canvas, so we suggest using both for clients of 50 or more people.

The Business Model Canvas feeds the 7C IT Management Canvas, and shows the Business - Technology alignment. It is just a little extra work, but it maps out the company business and technology very clearly. Of course, all the actions we take from here will be both technology and business oriented, and thus every tech-related project will have the business case in mind.

5. Your thinking tool

Most of the time you use the Business Model Canvas to manage your clients' businesses. I strongly suggest playing within your organization as well. Carve out your current model, create alternatives and brainstorm around different models and ideas.

Let's use our previous article as an example as we go through the MSP 1.0 and MSP 2.0 typical business models. Let's use these thoughts as conversation starters with your clients. Get your team together, do a workshop from scratch and ask the questions in the Canvas. You’ll be surprised how much alignment it can achieve.

If you are interested in learning more about how to leverage this tool, check out a demo with one of our Customer Success Managers.

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