Why inbound marketing works for MSPs
Let’s begin with what makes inbound marketing great in general. It draws your target audience to you, so you don’t have to go to them. You become a trusted authority on your subject matter in your market. The concept is simple but there are some key points I see people often overlook.
First and most important to remember when you’re building your inbound marketing campaign is that you need to be continually adding to the content your audience is looking for. Your MSP’s clients are out there right now trying to find ways to make their businesses more efficient for less money.
If you’re not providing them the information they’re looking for, your competition will. Even if they aren’t actively shopping around for your services they are seeing articles, blog posting, and comments on their social media feeds. There’s a good chance you’re reading this right now because you saw it in your LinkedIn news feed. This is how inbound works..
We at Managed Services Platform feel that you should be speaking to the C-level executives who have the authority to buy your services. They probably care about virtualization about as much as they care what brand of light bulbs are in their office (not much). They only care how their business can make more money and expend less doing it.
Let’s make sure we construct our content with that in mind. We’ve ditched the sales pitch, now we’re ditching the tech talk. Here’s a great example: The MSP 2.0 Service Offering in the 7C IT Management Framework. See how that provides lots of great insight a CEO could be interested in? Did you notice the most important part at the end? The often overlooked Call To Action!
If consistent quality tailored content is the first thing to remember for inbound, having a great call to action is the last. Everything else fits in between. Always think “where is my reader going next?” This is known as the buyer’s journey. Let’s define our buyer, then provide them a road map to not only finding us, but to find out what’s distinct about us, and hence to buying our services.
Follow these steps to be sure your inbound campaign is working:
- Define your ideal client. Often your business will have several. Usually they are a CEO, CFO, CIO or COO. They have the purchasing authority to buy your services. Write content that speaks to them.
- Define how they will go from finding your to buying from you. A typical buyer journey goes something like this: they see and choose to read an interesting article you published on linkedIn, then follow your call to action and subscribe to your blog. A few blog posts down the road they follow another call to action and download a checklist. This generates an email from you offering a complimentary report on their IT competitiveness quotient. Now you get to show them how your MSP can give them a competitive advantage in their market. You just found a new customer.
- Create and distribute great content with blogs, emails, social posts, infographics, quality landing pages and a responsive website.
- Always have a call to action that moves the viewer along the journey as you defined it.
Our first book: MSP 2.0 - The Managed Service Revolution
I have to admit we haven't done a lot of blogging lately and there hasn't been a lot of new content, sorry. We do have an excuse: we have completed a book about the MSP 2.0 business model.
We got your awesome feedback on our content- thanks - including the observations that our ideas were all in little pieces, lacking real connection. We needed a more comprehensive and linear format to digest this new concept, and thought that the best way to do so was to write a book. Have a look at what we have to offer in this format, and how you can become a contributing part of the story.
The concept of this book is first to analyse the current situation and then to create the practical but holistic approach to make MSP 2.0 a reality. We wanted to deliver a business-minded explanation about the industry we are in. We have an MSP (Hauser Canada) that we plan to make successful over the next 5-10 years. Everyone sees the problems and the turmoil in the industry, but not the complete solution. We didn’t want to talk tactics, or how to sell the cloud, how to price, or package better. We wanted to show a very viable strategy toward the next evolution of the MSP model and what is needed to move quickly on that path.
We observed that while there is proven prosperity in the MSP program, on the ‘break and fix’ model, but we didn’t have a complete business strategy. It has been a long process to change the model, and most IT managed services providers still have a majority of these contracts. Our goal is to clear the slate and see what’s next:
Introduction:
The MSP 2.0 business model is a great blend of the MSP fixed-fee model combined with the much broader scope of IT Consultancy. This book illustrates that new model such that you can see how an MSP can build a scalable business around it.
Chapter 1: Business Focus or Technology focus:
Many IT companies says they are "Business Focused" but what does that really mean? What are the prerequisites to be able to make that claim? What is behind the value proposition?
Chapter 2: Why the MSP 1.0 model is broken?
Unfortunately, the initial Value Proposition of the IT managed services providers is broken. Nobody really cares about the infrastructure any more. It is a commodity, like electricity, and thus the subject is not part of the C level conversation.
Chapter 3: Opportunity of the MSP 2.0 model
Meanwhile a substantial untapped potential is arising from the client side: the quest to be more competitive with the help of IT...to grow faster, service clients better, and communicate more efficiently. How do you address this huge opportunity?
Chapter 4: Why is it so difficult?
Do you remember how hard it was to switch from the ‘break and fix’ model to the MSP? There are two major obstacles along the way to implementing the MSP 2.0. This is going to be work too, but there are shortcuts.
Chapter 5: Requirements of the next generation program
If we want to tackle this in a systematic way, what do we need to address - the hurdles along the way we need to prepare for eliminate? What should be the scope for such a program, and what types of components should it have?
Chapter 6: The first Complete MSP 2.0 program
The complete program has many layers, like the framework, education, software, community, business building, and processes for each and every stakeholder. The client, who gets the value, the virtual CIO who delivers that value, and the leader of the MSP who is building the business.
Chapter 7: The Client Perspective
What does the client need to achieve competitive edge? Reduce the complexity of the IT, create transparency and a systematic approach to progress, ensure accountability, and effective collaboration.
Chapter 8: Virtual CIO Perspective
What the Virtual CIO needs to deliver is value in a scalable and efficient way: quick client discovery, implementation of core vCIO services and an IT management framework, effective management of IT Projects including collaboration with the clients.
Chapter 9: The Leader of the MSP perspective
What does the leader need to build a business? A Transition Blueprint Program, Self Assessment, Business Model Analysis, Creating the MSP 2.0 Value Proposition, Inbound Marketing Engine, Lead Generation engine, Predictable Sales, and Implementing the Virtual CIO services.
Chapter 10: The Roadmap for success
What is the typical roadmap for IT managed services providers of different maturities, size, and service offerings? What are the foundations and services needed to implement immediately and grow quickly?
STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS
How does the current definition of "IT" hurt your MSP business?
There was a State of IT Budget Report - a microscopic view of North America IT spending in 2014 from Spiceworks (RMM tool) during the weekend. It was all about analysing IT expenditures based on a 450 sample size "IT Pro" survey.It was a good report, well-thought out and executed, but there was something bothersome to me that wasn’t the fault of Spiceworks: the general industry definition of scope of IT, and because this is the industry definition, it’s usually our clients’ as well.
Differentiate yourself from your competition and
become sales ready in 30 days
I would like to highlight the flaw in an MSP defining their arena of activity based on the same definition. There is a debilitating pattern of industry players limiting the scope of the possibilities of their clients (MSPs) by limiting the scopes of the definitions of what they do.
OK. See how Spiceworks sees the "world of IT":
Hardware:
- Networking
- Server
- DesktopLaptop
- OS
- Productivity
- Virtualization
- Security
- Database
Cloud:
- Online backup/recovery
- Email hosting
- Web hosting
- Application hosting
- Productivity solutions
- Content filtering
Managed Services:
- Connectivity/bandwith
- Storage/backup/archiving
- Hosting
- IT service providers
- Consulting
You can download the report from here. Again, it’s a good one.
I think this is a very good classification of the different items a general client is buying now. However, it doesn’t at all address some great opportunity aspects. This is just the traditional MSP 1.0 classification.
1. I don’t see any "new" budget sections that somebody could create based on services addressing client's problems, and suggests that they are not shopping around. The biggest missing point is IT management services. I see a category for IT consultancy, but IT management services are not consultancy. Vendor management, IT reporting, IT budget reconciliation, managing SaaS subscriptions, NIST cyber security compliance in general and so forth are not consulting services, but I don’t see the place for those.
Because these are quite new services, clients aren’t yet aware of these solutions - though they do know the problems right now. Service providers should now create budgets for these types of these types of MSP 2.0 services. This is also putting into practice what we learned from the book "Challenger Sale."
2. I also can’t see an "IT Budget" for ERP, CRM, B2B, B2C, custom software developments, online marketing, etc. These are not just "consultancy" or "software" categories. A lot of progressive IT managed services providers are making money on third-party evaluations, project managements, etc.
It is clear that the report reflects only the "IT Infrastructure" type software and has nothing to do with other "enterprise" or internal process management, reporting, and client services like software. This report would have been better titled "2014 State of IT Infrastructure Report." In my opinion, it is critical, not just semantic, that the definition of IT not be limited to infrastructure, software, and hardware.
We limit ourselves in the perception of our clients as well. When we say "IT" or "technology," their definition will be the infrastructure, and if we support this we’ll get more isolated into this slot.
What does it mean to you?
If you are talking to your clients, they are likely to think of "IT" the way Spiceworks' termed it: infrastructure. But of course you are thinking on a broader perspective: Everything that is made of '0' or '1' is IT. If you do not address that, the new IT-based opportunities such as MSP 2.0, vCIO, reselling cloud-based business applications are not going to be a part of your portfolio.
You have two options:
1. Reframe your clients. Check this short video about reframing what IT can do for a client. This is a 10-minute presentation that shows how easily it can be done. We use this type of discussion with clients to make sure we define what IT really means, and we "redefine" IT using stories.
2. Use different terminology: In this case, you try to introduce new terminology, words, and phrases that help you create the difference in understanding. This is more difficult as you’ll regularly be trying to speak in jargon they won’t understand, like "holistic IT" or "business-focused IT".
Conclusion:
The IT industry has created a world that could limit you, where IT gets defined as IT Infrastructure. This is a limiting factor to you because you are in the IT industry. You need to differentiate yourself either by reframing your client's understanding of your trade or teaching them new terminology.
Monetizing Client Apps and SaaS Solutions the Smart Way
If you’re like me, you’re often evangelizing cool applications, services, and vendors to your clients. You have a cool feature on your Todo application, or you were able to integrate your CRM with LinkedIn, or you just collaborated with your team with an awesome project management tool. We spread the idea because we are advisors by nature. The question is how can we capitalize on this habit? How do we create service offerings around SaaS-based applications?
I hope you have read our monster blog article about the business model changes of the MSP. In this model there is an item called "Marketplace" in the partnership section, there are revenue streams called "Marketplace Commission" and "3rd Party project management," and there is an activity called "Resell Vendors, Applications."
The idea here is quite a common practice among IT managed services providers - finding a problem on the client side and helping them with an application. After deploying, manage the usage, subscription, and processes of the application. IT companies are mostly infrastructure providers, so they do these types of activities but in an ad-hoc way. What’s new here is the proactivity and a defined structure for these types of services.
PROBLEMS - VALUE PROPOSITION
Your clients have probably been using a lot of cloud-based applications for a while now. The average 20- to 50-seat company solves niche problems with niche applications. Some examples are sending bulk emails, using surveys on websites, organizing meetings and schedules, taking notes, sharing files, managing online marketing and sales activities, and automating processes.
The problems they have are the following:
- Finding out if there is an application for the specific problem (discovery services)
- Finding the right application for the problem (evaluation services)
- Buying the application or managing the procurement (negotiation services)
- Deploying the application to devices (deployment services)
- Creating the necessary processes (process management services)
- Integrating the application to other systems (integration services)
- Teaching the application to people (educational services)
- Supporting the application (support services)
- Managing the billing (vendor management services)
So, in a way they have the same problems they had in the good old days except they now with "technological" problems like installation, server setup, etc. We usually refer to this as an "IT management" problem. Usually clients simply swipe their cards to get access to applications in no time. They don’t know or understand that buying an application is only 10% of the entire process. It is easy to get onto this slippery slope. Users buy applications, then have problems, stop using them, and conclude the technology failed. The trick is education and storytelling.
My favorite story for this is Evernote's business-card-scanning feature. This is a nearly-free tool that can scan business cards, send LinkedIn invites on the spot, and then populate their CRM application with the contact data. I usually go through the process with clients/prospects and explain how it works and that it’s very affordable, because very few people use and leverage its true functionality. They just get it and use it, but the non-obvious features are going undiscovered. After this story, they understand what they are missing. This is a small reframing :-)
The value proposition here is to make your company more effective and vital by harnessing applications.
SERVICE DELIVERY
The delivery side is not rocket science, and very close to what traditional IT managed services providers are doing. However, to do it seriously, there are a couple things to think about:
Problem - Solution library:
Creating the problem library means you collect all the non-obvious problems you could solve with applications. Populating a CRM with Evernote’s business-cards-scanning feature is not an easy one to realize; it might be connected to a CRM through Zapier's integration feature.
You should create a knowledge base of the different business pains of CEOs and package your solutions for that. I bet you have a couple of geeks in the team who know every cool and popular service and app around.
There are also ready sales in managing people, meetings, delegating tasks, managing calendars, personal effectivity tools with the integration of mobile devices. Here, you could offer a bundled solution with to-do applications and shared project management tools, etc.
Integration method:
To make the process happen, you need to use a cloud-based integrator platform like Zapier to connect Evernote and the CRM application. It’s a pretty neat tool - you just drag and drop the two applications you want to connect, select your triggers and actions and you’re ready to go.
Partnerships:
Most of these applications have a partner model. That means if you sell them, you receive a commission. The best win-win way to use it is to share this commission with the client. In this case you remain independent, while still getting the client to choose your recommended provider - they enjoy the benefits of a discount and trust of your partners.
Pricing and packaging
There are many options here, but sooner or later you are going to shift to the managed model, which is very clear and easy to enroll.
Just think about it—they want to buy this service for the same reason they would want to buy a cloud based-application: as a service with a monthly flat fee, a package of their choice, and within their budget.
This is a flat fee based on application per user. You could use Light, Medium, and Pro classifications based on the difficulty of the application. For example, a ToDo app is classified as a Light app while an Online Marketing Tool is classified as a Pro app.
Then, you need to categorize your services, for example into Silver, Gold, and Platinum. The Silver covers basic services, but the Platinum includes integration with five other applications. A must-have is the hard edged definitions of the service, clearly stating what is included and what is extra. This is critical to smart delivery of the service.
At the end you are going to get a decent sized spreadsheet with all the applications and all the packages. The big idea is to aim at managing all their applications, so consider a quantity discount.
Of course, for bigger projects like a CRM or Accounting Package, you could always use the "3rd-party project management" method to monetize on the evaluation and implementation after the application of a flat fee. These are not just "apps"; these are serious business applications.
CONCLUSION
There are huge opportunities in the application world because even when there are no technical problems it doesn’t mean MSPs have nothing to do. There is plenty of work that can propel the success of our clients but they aren’t aware of it...the apps come from the cloud, so they must be ready to go with no more concern.
Teach your clients to build their own marketplace, deliver services, and create more recurring services!
Webinar Takeaways on Selling IT Security and Compliance
It was a really engaging talk with Steve Rutkovitz CEO of Choice CyberSecurity. He is a very successful MSP practitioner specializing in IT Security and Compliance.
We were talking about MSP challenges, strategies, IT consultative sales processes, IT security and compliance opportunities and partnerships, and I learned the following:
Generate client engagement
with five cyber security roadmaps in 30 days
- there are surprising similarities between the mainframe to PC era shift and the PC to Cloud era shift
- To become a successful MSP one of the most important traits is having best-in-class partners
- When you move up streams, you have to make sure you are able to manage management type people
- You have to develop a solid marketing / sales engine to teach your clients and prospects
- The Challenger sales is a great way to leverage the natural teacher inside IT managed services providers
- You can sell NIST Cyber Security and Compliance solutions without doing the delivery side
- The business model of selling IT security solutions through a partner
- The best foot-in-the-door tips and tricks to get front of CEOs
- The complete MSP sales process from “access to address” that maintains the IT security issues
- The natural advisory mindset of IT companies and the potential contained within
Thanks to Steve Rutkovitz for the wisdom and the honest, straightforward answers. I believe his thoughts could help IT managed services providers in any size and any maturity. You can bet this won’t be our last discussion with him.
Nist Cyber security Framework Quickstarter Pack
MSP Game Changer IT Sales Ideas From The Book - The Challenger Sale
1. "How you sell has become more important than what you sell"
Generally speaking, loyalty of the customer depends on the service quality and service delivery. Research has found that 53% of the overall loyalty is about the purchase experience. The factors influencing it are:
- Offers unique and valuable perspectives on the market
- Helps me navigate alternatives
- Provides ongoing advice or consultation
- Helps me avoid potential landmines
- Educates me on new issues and outcomes
- Supplier is easy to buy from
- Supplier has widespread support across my organization
So when thinking about your process for selling your MSP services, how do you measure yourself?
2. "There are five types of sales personalities. 54% of sales in highly complex sales environments are done by Challengers"
Although it’s commonly assumed that the "relationship builder" is the best profile for B2B sales personnel, research has shown that they are in fact almost the worst performers. They have a good relationship with the clients, but they just don’t produce the results, responsible for only 4% of the sales in high complexity environments. Selling MSP services is complex.
- Offers the customer unique perspectives
- Has strong two-way communication skills
- Knows the individual customer's value drivers
- Can identify economic drivers of the customer's business
- Is comfortable discussing money
- Can persuade the customer
Compare the influences of customer loyalty with these sales attributes and you can see why it is so successful.
"If you are not building or hiring Challenger reps, chances are you are going to come up well short as your deals become more complex."
My bet is your sales job as an MSP is not going to be simpler in the future...
3. "The Challenger is defined by the ability to do three things: teach, tailor, and take control"
- Teach for differentiation:
"Challenger reps deliver insight that reframes the way customers think about their business and their needs."
Selling features is no longer working, but selling through teaching & education makes you a thought leader and a trusted advisor, and creates the best sales experience possible.
"The thing that really sets "Challenger" reps apart is their ability to teach customers something new and valuable about how to compete in their market. Teaching is all about offering customers unique perspectives on their business and communicating those perspectives with passion and precision in a way that draws the customer into the conversation. These new perspectives apply not to your products and solutions, but how the customer can compete more effectively in their market. It's insight they can use to free up operating expenses, penetrate new markets, or reduce risk".
- Tailor for resonance
"Challenger reps communicate sales messages in the context of the customer."
The idea here is to switch the talk from our frame of reference (our services, service offering) to the client's frame of reference (business issues, opportunities, challenges). That creates the resonance and chemistry which is needed to understand the problems and structure the solutions.
"If a Challenger rep is sitting across the table from the head of marketing, he understands how to craft his message to resonate with specific priorities. When he's meeting with someone in operations, he knows how to modify the message accordingly. But this isn't just a measure of business acumen, it's a measure of agility - the rep's ability to tailor the story to the individual stakeholder's business environment. What specially do they care about? How is their performance measured? How do they fit into the overall customer organization?"
This is about communicating in their language.
- Take control of the Sale
"Challenger reps openly pursue goals in a direct but non-aggressive way to overcome increased customer risk aversion."
Having a clear process for sales is crucial - as opposed to having coffee and a chat and building a relationship in a general way. It is a well-defined and a purpose-driven process to understand your clients - to get aligned and, if we’re able to deliver value, close the deal.
"The Challenger's assertiveness takes two forms. First, Challengers are able to assert control over the discussion of pricing and money more generally. The Challenger rep doesn't give in to the request for a 10 percent discount, but brings the conversation back to the overall solution - pushing for agreement on value, rather than price. Second, Challengers are also able to challenge customers' thinking and pressure the customer's decision making cycle both to reach a decision more quickly as well as to overcome that "indecision inertia" that can cause deals to stall indefinitely."
This is about getting alignment and clearing the road of obstacles that could postpone starting the business..
Conclusion
These are only couple of ideas from the book. However, if you are read between the lines, this is 100% aligned on how we sell in our MSP and how we developed the IT consultative sales process. It resonates with everything we do, as the questionnaire, scoring, reports, workshops, action plans are helping sales reps to teach, tailor, and take control.
Why are MSPs struggling with IT sales these days?
We think that one of the biggest reasons for this is the failure to separate different kinds of sales, and trying to use one strategy to sell everything offered.
In the days before cloud-based applications and storage, when clients had to maintain a lot more of their own IT infrastructure, when the inevitable problems arose there was a clear need for the MSP to be there - to use a bit of business-validated tech mumbo-jumbo, and the sales were natural. Because the client had obvious identifiable business pains, the choice of solution was straightforward.
These formerly ready solutions are now fragmented; company infrastructures are much less homogenous, so our model of one-size-fits-all IT service is no longer appropriate. In short, sales have become more complex.
So let's simplify the different IT sales roles and address them.
1. Upgrade T&M clients to MSP
Problem:
We have so much potential on existing T&M clients, but they have not upgraded to the MSP recurring contract yet - we’re leaving money on the table.
Challenge:
In order to import these existing clients we must demonstrate the business value of the MSP contract versus the T&M contract, but C level executives are rarely aware of the subtleties of this distinction and usually don’t put them high on their list of concerns.
Solution:
First of all, you have to identify who could benefit from the MSP contract at all. Companies of 15 or fewer users rarely suffer the complex problems an MSP contract solves. Give them the service of T&M, but don’t wait around hoping to see great potentials arising around them.
Second, you have to produce a business comparison between the T&M and the MSP contract in terms of delivered value, rather than on the features. To that end we developed the Managed Services Platform scoring system, which illustrates the difference in the competitiveness of IT with T&M compared to that with an MSP. This practical measure commonly generates T&M scores of 10-20 out of 100, and 45-55 for operations with managed service provider. This is their introduction to what we call the reframing process.
2. Acquire new clients
Problem:
There’s no getting around it...it’s real work to go through this process effectively.
Challenge:
This is a long process; you have to create leads, qualify them, and invest a lot of time with no guaranteed results. Long hours and multiple meetings go by without us and the client reaching alignment. We know there’s opportunities, but those who would benefit often seem unable to see them.
Solution:
After the first initial meeting, we usually use the IT competitiveness scoring we used in T&M. The role here though is different; it is is to evaluate the business context of their current IT setup. The scores show what they have going on at present. Our role is to assess what score they want to reach.
So if they score a 30, why is that? Do they lack the wherewithal to score higher, or is it a matter of choice? We can then use the different topics within the composite score to introduce possibilities. This shows them a clearly structured way to assess how they can enhance their IT’s impact on being a competitive company. Also, the benchmark score gives them a reference point for them to compare their performance to the industry.
Finally, with this approach, client acquisition could consume less of the upper level personnel's time as the process is standardized and proven in use.
3. UPsell third party productized services
Problem:
For some problems, we are tasked to find the solutions.
Challenge:
There are so many XaaS offering MSPs that could sell (virtualized desktops, BDR, DRP, etc.). Most of them are disrupting one or another current MSP service, so it is quite difficult to fit the portfolio. For example, Office 365 is now disrupting current Hosted Exchange solutions, and BDR solutions are disrupting our existing backup practices, and so on.
Solution:
This is product-based selling, which is very different from traditional service-based selling. Although the product is a service, there is a beginning; an end; and a package with features. These are not the flexible services we usually sell to customers.
That means that there are are certain problems and opportunities that can be dealt with by features you could put on the contract page. For instance, you could have a slide deck, and the problem is solved therein.
However, you have to determine if clients are interested in the features and then sell them, and because we’re talking about product selling, a different IT sales approach is required. Hire IT sales representatives for that and let them do the job...give them the quotas and products, and train them. Then you can sell those items since you’ve defined the problems have been through a minor discovery, and consulting will follow.
4. Complex Solution Selling
Problem:
Complex solutions like MSP services are hard and slow to sell, but are where the big money is. These are the complete cloud adoption and virtualization projects, ERP, CRM, and B2B E-commerce solutions we are always waiting for.
Challenge:
Selling complex solutions is a slow process. It involves third parties, and figuring out the needs of the client and evaluate the available solutions. In this case, it is very unlikely that we are operating without any competitors, and while our services are not always measured, our products are. So even when we’re great, they have their own priorities, and could choose another product.
Solution:
In most cases the party with the better understanding of the client is going to win, so again we highly recommend the IT competitiveness scoring tool, as it will distinguish us from our competitors. We can be more sure and precise about their priorities, problems and hidden opportunities. In this way we‘re able to develop a more appropriate and tailored solution, and highlight this in our presentation. Moreover, showing the business context around the IT solutions is always beneficial. It means we spell out the "why" of the solution, instead of the "what" and "how." The client will understand from their own point of view why they need those in their operation, sales, marketing, etc.
Conclusion
First, understand what you’re selling. Don’t use one method for all different types of sales, sell only one thing at a time, and don’t sell everything at once to a new client - you’ll likely mess up the flow of processes, and leave the client confused.
Second, use a business scoring tool to align your prospects and clients with their business perspectives. It’ll helps you close deals faster and with a better success rate.
The 3 building blocks of a remarkable MSP sales process
I’ve been talking with a fellow MSP entrepreneur recently about sales. He’s been suffering the inability to find the right someone for MSP contract sales, so he or the other directors are saddled with the sales work.
This is actually the usual situation among IT managed services providers... I see it all the time. The directors, CEOs and company presidents, are doing the sales for MSP services and neglecting their bailiwicks...developing the business.
The problem however is not HR, but the nature of the operation. Usually, when you find yourself unable to hire someone, and the high level staff are stuck doing it, you only see that symptom and not the root cause. In this case, the operational problem is causing the HR problem. The process is so complex that it narrows your field of potential hires. Only those with the most experience can manage it, and those people are most needed in other roles.
So let's see the typical MSP sales process of an MSP 2.0
- Lead generation: by referrals mostly, sometimes through networking.
- Opportunity qualification: no protocols in place for that, so everybody is the target group, from 2-5 people shops to enterprises of 200 and up.
- Client discovery process: technology-based assessments suited to ‘techs’, but the C-level of the MSP can also talk business with the client.
- Problem presentation: only a C-level MSP can properly execute this.
- Proposal: coming from the C-level again, preparing the solution
- Close: handshake between the client and MSP executives
- Follow up, execution, onboarding: this is where process starts to be seen
...and the obvious problems arising from it:
- This is not a scalable process. Each move forward costs the executive's time and jumbles priorities.
- Very hectic sales and operations cycles...so if the sales are brisk, the operation will also be demanding on the C-level, who will have to focus on execution. When the sales slow down, IT companies will be losing opportunities in the funnel as a result.
- The C-level is stuck in account management positions. They have the trust of the client company, so in every future endeavour the client will expect them to show up...and they are relegated to the delivery team.
- If nobody else has authority and accountability on the sales, only the C-level can do it.
- Devalues the role of the C-level of the MSP to the operational level in the eyes of the client.
- Working in the business instead of working on the company.
So currently the expected salesperson is by default a C-level executive, and not a dedicated sales professional, of whom there is no shortage in the workforce. Since we can’t change the facts of the status quo, we’ll change the sales process.
1. Create MSP sales roles:
There are three roles in sales, not one. You can distribute them to your existing people, or of course hire part-time or full-time pros.
Inside sales: creating qualified leads to generate opportunities, communicating by email, phone, and social networks.
Outside sales: visiting prospects, pre-sales, sales, nurturing the account, closing sales, visiting clients regularly, all the time spending company money on fuel, food and CRM software licenses.
Executive: maintaining high level connections, making conversation, meeting with clients when processes are stuck, or whenever executive encouragement is needed.
Account manager: all the up-selling to existing clients, and checking in on a monthly basis to do monthly/quarterly activities and to calculate the required budget for upcoming projects and new products.
If you’re able to separate these different functions, you’ll find you can get the right people from the labour market to work for you and achieve real results.
2. MSP sales process as a system
The sales process can be very long and complex. This isn’t a grocery store where the problem of hunger is solved in every aisle with little or no consultation. Our clients’ problems are layered and technical, often hard to see, and we are the ones who have to put together the solution. We need to actually get to know and understand the client. So for every step along the journey we better find the best practices and separate responsibilities.
Draw a funnel and divide it into three horizontal segments. These are the fundamentals of a remarkable MSP sales process:
The first one we call Top Of The Funnel (TOFU).
This is where prospects are made aware of our existence...they check our website, read our blogs, newsletters, etc. The best approach at this point is to provide valuable content in these mediums. It includes both inbound and outbound marketing...either they’re coming to us, or we’re drawing them.
The former is more likely to be long term and more engaging, while the latter is the traditional (not as fun) cold calling, ad-driven marketing we all know. Both have their merits; it’s just a decision where in the marketing and inbound sales territory you want to invest.
The second is the Middle of the Funnel (MOFU).
This is the evaluation period...we’re talking with the clients, discovering their company, and presenting our expertise. This person to person sales is the most effective method of doing business, with supportive inbound marketing materials like relevant blog posts and articles we’ve published. This helps distinguish our unique value proposition, so it’s critical that you have a system in place. This is the outside sales role, with support from executives, where we have to show who we are, and what we can do.
The third part is the Bottom of the Funnel (BOFU)
This is where the yes/no decisions are made, where we have the proposals, action plans, and company references. The critical item is the product - it needs to demonstrate it fits the needs of the client, so our ability to articulate those issues, the root of the problems, and a viable solution and a professional proposal is what matters.
You need a process to get your sales force in front of the client as soon as possible. This is again the responsibility of outside sales. The executives will come in only if necessary...they shouldn’t be tasked to close deals. If this is happening, then they’re not available for the higher level work only they can do.
After the closing, the growing phase is coming
...where you’re trying to sell more services to your existing clients, and performing the quarterly business reviews, yearly strategic sessions, and monthly phone calls. An annual executive check-in (not during the renewal phase) could further provide valuable feedback for both sides.
3. Automate and standardize
Now that you have the roles and the processes in place, standardization and automation come into play.
For TOFU, you can use marketing automation packages like Hubspot. You can leverage LinkedIn for prospecting, or any other cold calling agency you deem fit. Here’s where your scripts, email templates, and pre-written referral letters come in handy. Don’t over-think though: grab them from your favourite sources and have someone custom-edit to your enterprise.
For MOFU, you can use CRMs like Zoho, Salesforce, or the built-in PSA modules. I am surprised that only 20% of PSA users are using the CRM functionality or CRM integrations at all. A basic fact of MSP sales is that it’s usually time and problem based.. If your timing’s not right, you won’t be able to sell. You should nurture these prospects over time, so when the inevitable troubles come, you have everything covered.. Without CRM functionality, it’s just not going to happen.
For BOFU, you can use a proposal, an action plan, leaflets, agreements, or contract templates. However, usually regardless of all your effort, the client will flip to the last page where the pricing is located. The automation in this regard is more difficult as it involves person-to-person interaction as well.
The problem specifically involves the follow-ups, price recalculations, version revisions, and special clauses. Thus, you have to define follow-up processes, your non-negotiable bottom price for first clients, and the administration process for setting up new accounts. Taking care of these matters in advance will streamline your process so you can strike while the iron is hot.
Conclusion
No, this isn’t rocket surgery. Nonetheless it requires a fair amount of planning and dedicated work to accomplish, but the benefit is that you owners will have more free and creative time. If you’re not able to develop this process, automation, and roles, you will be working too much in the company rather than on the company, and squandering your entrepreneurial spirit on breathing life into your organization.
Research: World of Virtual CIOs on LinkedIn
I was interested about the vCIO, vCTO, and Virtual Executive types of services. So my colleague Peter did some research on LinkedIn on the topic. Keep in mind everything herein is based on LinkedIn publicly accessible data...it’s interesting but there’s a limit to the depth of research you can do this way.So in general, I found that clearly the Virtual CIO industry is driven by the US. I can confirm this from personal experience, that American MSPs are much more comfortable with this term than European or even Canadian IT managed services providers.
- since 70% of vCIOs are hired by companies with under 200 employees, and 9% to large organizations (10,000+), there must be some local support need for interim or part-time high level IT executives.
- when looking at companies offering vCIO services, 97% have fewer than 50 employees and just over half (55%) have a staff roster of under 10.
Here’s our slide deck on our findings:
- 78% of vCIOs have more than 10 years experience, 16% between 6 and 10 - not surprising figures.
- the most essential roles of vCIOs are IT Consultant, Engineer, Sales, and Business Development. Interestingly 12% of identify as entrepreneur, in the sense that they are owners of an MSP organization.
- from what we see these vCIOs doing on LinkedIn, it seems that the largest collectors of these people is the cloud-related, and traditional CIO groups.
- 84% of these people exhibit little to no activity on the LinkedIn social network.
What I get out of this in summary is that there is no accepted academic definition of a vCIO, though companies do grasp the idea of a part time C-level executive assigned to the wheelhouse of their IT. The need is evident...just not widely recognized.
From this I see that we need to address the following: how to define and communicate the value proposition, the MSP sales funnel and the specific service offering that IT companies have invented to sell and deliver vCIO services.
The next step would be to define the vCIO roles and responsibilities and create a framework around their work. This would be required to disseminate this unrecognized need, and to enable the less resourced or less innovative IT managed services providers to start such services, and help the current vCIO practitioners to streamline their vCIO type of services.
See: 2019 Managed Services Platform vCIO Report and Managed Services Platform Account Manager Report 2019
