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.
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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!
How to turn an unknown visitor into a lead easier than you thought
We’ve been talking about the 4+1 Website Sins Preventing MSPs from getting more MSP leads. Many of you are asking, "Okay. I know our MSP website doesn’t generate leads like we wish it did, but we don’t have the money and time to re-work it, so what do you suggest?"
Here we describe a process to add elements to your current MSP website in under 60 minutes and generate leads.
Before we start let's get perspective on the situation. If your current website does not have enough visitors, it’s hard to make any magic happen. If your current website attracts visitors, but they’re not qualified, then you’re still not generating the leads you need.
If you aren’t sure send me an email with your website URL. We’ll run an analysis on your website, and report how many leads you can expect by implementing this process.
The idea here is to create a lead-generation process that attracts the right visitors through social media, organic searches, and so on.
We are going to use our platform to demonstrate this method in practice. The process is general - you can use any marketing software to implement it. The difference among them will be the time, difficulty of implementation and the creation of the content.
Win new clients with it sales software
Step 1: Pick two Graders from the MSP marketing library
First, we need something interesting and relevant to the visitor so they can get engaged. We should use something on the main page or a landing page where they can do something interactively.
Graders are mini-surveys which can be implemented on any website. The visitor clicks on the Call to Action button and a javascript pop-up window appears. Here the visitor gets yes-or-no type questions on a particular topic. Based on their answers, it sends back a Grade - a score for the visitor (whoops...it's now a lead.) in a nicely packaged ebook format. It comprises their score, some suggestions, advice, next steps, and more information.
Although Graders can be modified and created from scratch, we have a bunch of them that can be implemented quickly. A Productivity Grader for example asks 7-8 questions about how a visitor leverages technology to become more productive - about emailing habits, meeting organization, personal task management, team project management and so on. At the end they get back a Productivity score. You as an IT managed services provider can influence their productivity, so you need to engage them in conversation about the value and benefit of your services. That's what we call "business communication."
These little Graders are great in social media as they spread quickly and also help us to qualify our leads. There are popular Graders such as measuring your current service provider. Whoever is evaluating the current or future provider will be highly likely to fill out our Grader, because they are already looking for the answers in the results.
The MSP 2.0 Marketing platform gives you quite a bit of flexibility on the content and function of Graders. It sends a white label pdf with your logo from your email, and also an email sequence to follow the lead after sign up.
We have not seen any other complete software for these things. Surely Wufoo, Surveymonkey or Google forms can get the answers, but would require a lot of manual processing to create the report, and won’t have the content and design.
Step 2. Pick Two MSP eBooks from the library
There are of course people who do not want to play with the tools, but do like to download valuable content. Based on our research, if content is business rather than IT oriented, the conversion rate from visitor to lead is higher. For example, if we write an MSP eBook entitled: "How smart executives boost their top line with sales intelligence," rather than: "Should you Implement Windows 10?", we get much better lead generation.
The eBook will highlight the benefits of applications and technology solutions that smart executives use and the visitor doesn’t yet. Since the eBook is written for executives, executives will and office managers will not download them. That helps you qualify the leads.
Our MSP marketing library has plenty of different eBooks you can implement quickly. The docx format is easily customizable with your logo and your name, and then ready to go.
A good eBook increases the conversion, but a great eBook increases visitors as well. Social media is ideal to promote such content.
Then again you may want to create your own content, which is great. As we see it, to create an eBook or Grader takes at least 1-2 months for a busy managed services provider. We usually suggest choosing generic eBooks and Graders first from the library. After swapping out the titles every one or two weeks and checking the statistics to see which works better, then you can add your content, but without losing the 1-2 months of lead generation opportunity.
Step 3. Implement Calls to Action
Now that we have some content to offer we should help the visitors to take action.
We use four types of call to actions (we call them Lead Magnets).
- Button - to place inside our current text with a javascript code
- Pop Over - to create more attention
- Scroll Box - to offer our material when they scroll down our page
- Smart Bar - to make a short offering on the top of the page
We then need to configure these Lead Magnets accordingly. We can modify the page they appear on, the type, whether it shows every visit or day or week, etc. Nobody can accurately predict what works best for everybody, so just set it up and tweak it based on the feedback reports.
These reports show you how many times the Lead Magnet appeared, on which pages, what the visitor did, etc. so you can best tweak the size, color and message on the magnets.
Most marketing software has some solution for the Calls to Action, but not the reports, statistics and easy implementation and adjustment.
Conclusion:
We do not need a IT marketing assistant, marketing team, or an outsourced marketing provider to get results. This is not a comprehensive marketing system, just a reliable system to turn people into leads likely interested in our products and services, and a real chance for them to engage comfortably. Let's get busy and make business happen.
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.
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.
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!
Do You Know Your Customers?
Knowing to whom you want to sell your services is as important as knowing what you’re going to sell, if not more. Think about it an airline...would WestJet or Southwest Airlines be as successful as they are if they were trying to sell their frill-free economy class seats to the wealthy first-class traveler? Starbucks and Apple only offer products priced well above the average for coffee or computers with people lining up to pay. In fact I’m enjoying my Venti-Americano as I write this. So what makes these companies so successful at whatever they do? They’ve defined their ideal customer so well that now we as consumers identify ourselves with their products.
The good news: your business can do this too.
When MSP business owners are asked to describe their ideal customer they give a wide range of answers, ranging from “the kind I can find” or “the kind that pays their bills on time” to some superlative customer that can be the saving-grace for their struggling business. These same business owners are also likely shelling out monthly to attract more. What’s usually and most troublingly overlooked are the following two simple ideas:
They have not defined:
1. whom they WANT as customers (buyer personas)
AND
2. whom they DON’T WANT as customers (negative buyer personas)
It can be easy to confuse the two, especially when cashflow is tight. But even worse, the customers we don’t want take up the most time and resources and will rarely help us grow a stable, profitable business beyond the short term.
So who is your ideal customer?
- Who has purchasing authority? Probably the CEO/COO/CFO.
- What problems can your IT managed services provider solve for them? Hint: these problems need to be in their language...they probably don’t think about the technology of virtualization or the cloud.
- Where do they look for solutions? Friends? Google? Who or what is their authorized source?
- How to they make purchasing decisions? Are they looking for a special price, a good customer testimonial or something else
- What size is the company? How many seats? 10, 50 or 100+ positions?
- What is their level of technical complexity? Do they need any industry specific solutions?
We need to also consider that most businesses have a few different buyer personas. It’s wise to define as many as you need and key your inbound marketing efforts toward each of them specifically. We also need to define the ones we don’t want. Just don’t be afraid to rule out or “fire” a few prospective customers. Focus will serve your business well in the long term.
Where can your ideal customer be found?
Every business has problems and every problem has a solution, ultimately supported by some kind of technology you can offer. But don’t confuse the two...buyers care about the solution, not the technology. Don’t take my word for it...try having a conversation with someone in a language they don’t speak. You could both be thinking the same thing (the solution) but without translation (the technology) you’re not going to get very far.
Start speaking the same language in your inbound marketing and with your ideal customers and pretty soon they’ll be lined up to order Grande-Misto-Backups and Pumpkin-SaaS-Lattes!
12 mistakes most MSPs make with their vCIO services
The virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature IT managed services providers who believe they have a functioning vCIO 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 IT companies.
vCIO 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 MSP 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 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.
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.
Mistake #3. Not using a framework to develop the system
The vast majority of the managed services 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.
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.
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 MSPs, 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.
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.
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.
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.
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.
Delivery
Mistake #10. Not using vCIO tools like automation or collaboration
Most MSPs 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.
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.
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.
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 Tool. 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.
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.
Cracking the code of the future of MSPs
There’s been a lot of talk lately about a fundamental change in the MSP industry, and the subject may seem overwhelmingly complex. The change taking place is quite evident, but what’s inside the tornado? What is the force behind this change happening?
Understanding the underlying impetus will enable businesses to make more educated decisions where to drive their companies. Let’s demystify this change and put it in a very easy to digest format, as the core of the change is actually simple.
It is not our shortest Blog but I promise worth the read. You will see the change taking place and how it could help you drive enormous growth in the next couple years. So fasten your seatbelts!
We are going to use one of my favorite thinking tools to analyze and understand the situation: The Business Model Generation framework. We use this method nearly every day, to understand our customers and their business, brainstorm new business ideas, etc. We like it because it is very simple, very straightforward, and separates complex systems into simple components.
We’ll start by showing you the current typical MSP business model and why this model was the right answer for the market needs in the past. Then we’ll look at how the core of market needs have changed and the resulting changes that have been made to the business model.
Market need:
Think way back to when computers first came into the commercial environment and dramatically changed how we do business. These were large and complex systems and unwieldy from a technological perspective. For so many tasks somebody technical was needed to finish the process - to convert a picture, scan a document, set up a network, or just save a file. These tasks needed to be more user friendly and the users to become adept in these environments. The problem to overcome in was technological complexity.
So the IT support companies came to the scene and solved the problem of technological complexity. They have been evolving since, and the most mature format of this service is the Managed Service Provider model.
Let's analyze the classic MSP model, particularly to see how all the aspects of the current model are working together. We will then see how a small change on one part of the business results in adjustments in every field of the model.
Value Proposition:
The core value proposition of an MSP is reducing the complexity of technology. This is the ultimate goal and the value they are delivering to their customers. It can be stated in various ways: "run your business smoothly", "peace of mind”, "security and compliance", or "strategic IT design and decision making". Every company has its own style but all promise to reduce the complexity of the technology in their client's environment.
In order to fulfill this promise, IT managed services providers first create a so-called "Outsourced IT Team" service, which includes all the human resources as an independent unit. Clients do not have the necessary skills or resources to manage these teams.
Second, they provide an "IT infrastructure": design it, build it, manage it, and support it. The infrastructure includes all the switches, servers, desktops, and gadgets and all the software elements on them.
Very simply, this is the core value proposition: reduce the complexity of the technology with outsourced IT staff and IT infrastructure.
Customer Segments:
Regarding size of client company staff the sweet-spot for the traditional small IT companies can range from 20-150. Below this it’s hard to standardize the service and the budget is too low, and beyond it those businesses usually have their own IT department.
Channels:
The typical sales method for MSPs is word of mouth referrals. As with doctors and lawyers the performance of the provider is judged on criteria unmeasurable by the customer and in industry jargon that no outsider understands. This makes trust and reputation essential factors. An MSP could lose a client by dropping the ball on a deadline, or by neglect, but without these catastrophes it has been a comfortable space to be.
Most IT managed services providers do have some form of website; not so many have a blog or other educational content. However, these are very unlikely to create a "marketing engine", or to excel at collecting and managing leads. Also, most are made by the owners or directors, whose only frameworking tool is a "network assessment tool" which helps them discover the IT infrastructure of the client and give recommendations based on that.
Customer Relationships:
The Service Desk drives the main relationship between the MSP and its clients. While the most important elements in its service quality are the response time, the personalized services, and dedicated resources, many IT companies have outsourced this function and had a hard time afterwards.
In our terminology, account management is still part of the Service Desk, because it’s the management part of the service. Still, some MSPs claim to be vCIOs, though it’s likely that this service was made a part of the MSP package just to improve sales.
Moreover, Virtual CIOs have tended to concentrate on IT infrastructure planning and design, or on doing quarterly "business reviews" and neglecting other parts of the business. They operate without a process-driven separate service offering. The clear loss from this is that very few MSPs will get a call if from a client with a business problem. The client will call once they’ve solved the business problem and they need a new server. Instead of being a business advisory role in most cases it’s one of technology infrastructure advisory.
Key Activities:
While there are several models, there are only three main functions within service delivery: software, hardware, and service areas.
Among existing service areas, there are projects, system developments, NOC, and Service Desk. Some companies separate the project work and maintenance; others some separate NOC from Service Desk.
The HW/SW sales have typically driven the projects, and every 2-3 years major developments were taking place. These developments drove an enormous amount of fixed base revenues for the service providers.
Key Resources:
Key resources are those that if taken away bring the company to a stop. For MSPs, the key resources are the human capital, client contracts, relationships, and experience and knowledge base of service delivery.
Key Partnerships:
Other more valuable partnerships were based on service delivery software. PSA and RMM solutions directed the quality and the efficiency of service delivery. These companies invested heavily to educate and help IT companies.
Cost Structure:
Revenue Streams:
In terms of revenue streams the most prominent have been the resource-based ongoing revenues, which could be Time and Material, Block of Hours, Retainer, or Recurring service models. Next are the project-based revenues, which usually include fixed costs. On top of these there is a shrinking margin of hardware and software sales.
So, this is the traditional MSP 1.0 model. I have spoken with around 100 MSPs in the last few years. I have read most resources and we have built two MSP-related companies.
Business model design demands the ability to see the patterns and the changes around these whole sets of building blocks. We have to see the precise nature of changes as well as other parts of the business model have to change to adapt.
So let's see what has changed in the last few years related to the classical MSP 1.0 model:
1. Using technology is gets less complex
The user experience of mobile devices has driven an enormous change in reducing the complexity of technology. Just five years ago the method of sharing pictures included taking a photo, downloading it, converting it to Jpeg, and then copying it to a USB drive. Now my parents are doing that all with their mobile devices. Just take the picture, edit if you want and easily share it through Instagram or Facebook.The cloud democratized technology. Everybody can get the latest CRM platform with the swipe of a credit card. There are no implementation plans, consultants, or hefty projects needed. You can just start today and emerge.
Further the current generation of users is now much more comfortable with technology. The complexity of the technology became not just absolutely simple (like using iPhone), but also relatively simple to learn and adopt. Generation X and Y are more willing than ever to search online to solve problems themselves without calling a help desk.
2. Management of technology gets more complex
The market has fragmented. There’s both a multitude of applications around the web solving problems, and numerous corporate and private problems looking for solutions. These realities are often prevented from meeting, however. Both client companies and vendors are specialized in niches, and the sheer numbers make getting together difficult to manage.
The impact of technology on businesses is greater than ever before. Everything is wired and a single point of failure could run a company out of business. Consider CodeSpace: a small company hosting websites, where a hacker was able to erase all their data, including backups. CodeSpace was forced to close their doors. Having a clear vision of all aspects of security, applications, access, vendors, costs etc. is still a management challenge.
The IT budget has also increased because many things that were outside of the IT budget are now included in it. Managing this budget is a complex issue as IT is no longer a technology challenge but a management one.
IT is clearly a strategic asset. It is not the infrastructure but the applications, the adaptability, and the culture are what the company is using,. It can be a differentiating factor among the competition based on costs and customer experience.
So the two major changes that have taken place are, first, the complexity of technology has been declining and second, the management complexity of technology has been increasing. These trends are interdependent and supporting each other.
The problem is that these two factors work against the current MSP model in a big way.
The first is undermining the basic value proposition of an MSP by removing the technological complexity. With demand decreasing, the services that the MSP delivers are devalued. It’s the first thing MSPs are witnessing: fewer client calls and some IT decisions are being made without them.
This is a typical "Red Ocean" scenario, meaning the competition is increasing and the market is commoditizing. This is not a good place to conduct business.
The second trend is creating a new demand, but this demand has not manifested as service requirements yet. There isn’t yet a mainstream service around the problem, so clients aren’t shopping around. While there are still opportunities to solve problems for companies but they aren’t able to translate the myriad choices into a service they want to buy.
Hence this is a typical “Blue Ocean” opportunity. There are few to no competitors. The market is wide open for influence and education and unique value propositions can be made, a new service can be developed, and at a higher value.
However, as you will see, you have to pay a price as well. A switch from the current model is no mean feat and there are many obstacles down the road. This is a higher risk, higher margin model.
If we can properly read all these changes, we then have to design a new business model around them to make a viable business.
So let's have a look at the so-called MSP 2.0 model. In this chart everything green is new, the orange is of reduced value and everything red is going to be obsolete based on the new model.
The New Value Proposition
Our new value proposition is geared to reducing the complexity of the management of technology. That means our goal is to manage all technology-based business areas - to make the client more competitive through the use of technology. We achieve this in three ways:
- Improved efficiency with technology: find how we can drive down client costs through automation, standardization; better processes, information, communication, and collaboration.
- Competitive edge with technology: fuel client revenue streams with technology, better customer service, faster delivery, and better information flows.
- Maximized business continuity: as the impact of breach is much higher than it used to be, so the IT security, information security, and vulnerability are going to become more important aspects in the business perspective.
“Management" is all about making decisions, creating strategies, planning accordingly, and executing projects. We have to create services around these three building blocks following the principle of the value proposition: We are going to comprehensively handle all the aspects of these management issues on behalf of the client.
This is not entirely new; every MSP has been doing some of this in one area or another. However, this puts it in perspective of the two major shifts. These must be fully fledged service offerings, and not just something we do for our clients as a side offering.
The New Customer Segments:
We have to seek out companies with more complex operation. This kind of service has not been developed for larger groups so we could have 150 to 500-member organizations as targets as well. We may not drive their whole IT strategy, but we could be a part of the Sales, Operation, or HR-related IT strategies. These are also small companies within larger ones with a particular focus. Harvesting those projects could be very profitable.
Also, we have to understand that being thought leaders, and not interested only in infrastructure, could open a lot of doors to larger organizations. This solves the problem of hearing “we already have an IT department” from larger potential customers.
The New Sales Channel:
If we want to sell this new value proposition, we are going to face new challenges. Nobody is buying it now, period. There is no such service around, and the market is still uneducated on these terms.
In order to be able to sell, we have to educate the clients, and we have to "reframe" them. For education, we need to create content and distribute it. A blog is a better start than books and case studies and is a common and effective avenue for content and inbound marketing.
Our value proposition is to increase something that is very intangible. The competitiveness with technology is a pretty fuzzy term. However, the actions and ongoing activities driving competitiveness can be measured. This is "ITCq" (IT Competitiveness quotient); a measuring of all the things related to well-managed technology. Using this tool makes it very easy to start a conversation with prospective clients.
Starting a conversation is one thing but closing deals is another. For that, the different workshops are a great option. We provide services to show our expertise, and then we can move on to important quick-win projects. Those projects are our foot in the door; and after successfully closing those projects, we can open up many other services. This is a seeding rather than a hunting sales approach, with the understanding that clients need time to adopt.
The new client relationships:
It is now apparent that our new core service offering is totally centered around a true virtual CIO role. The True vCIO deals with all aspects of the technology, not just infrastructure.
This role is going to fulfill all the needed high-level management roles, communications, and interactions. It creates all the IT strategies, roadmaps, budgets, and operational plans and manages all the projects needed to execute the strategy. This role is going to drive the perception of our services. The switching cost is considerable - we can still drop the ball on the delivery side if our vCIO isn’t dynamic - but if we stay active and communicate well, we have nothing to fear.
This is a business analyst or IT consultant role. If you don’t yet have one, hire someone with this skill. Set processes and job descriptions in place so you can train and set expectations for his or her performance.
The New Key Activities:
Because the vCIO services are now standing on their own, not attached to an MSP contract, we need to incorporate an "IT management framework" that comprises all the processes and deliverables that IT management now does and the vCIO is working on. The IT management framework is like a small ITIL, or any other framework, but more practical and automated.
We are using our own 7C IT management framework for that reason. The ITCq is the tool which measures all of the activities we have in the 7C framework. Implementing that sort of framework produces a decent revenue and creates a very visible form of ongoing services to maintain and further develop the client’s IT competitiveness. It contains yearly strategy, planning, budgeting, and auditing, based on templates and best practices. Everything goes into the software that clients can access, and which we can use to make what we bring more tangible and visible to the clients.
Because we are creating IT strategies, someone has to manage them. This includes overseeing all the IT projects the client is doing, but it could also be the specific third-party project management of a larger solution.
We will continue operating our NOC, Helpdesk, and traditional IT infrastructure services as long as it makes sense.
New Key Resources:
The key resources of the traditional model have not changed and only one is added. The IT management frameworks are now a huge value. The clients have locked in and we are driving the heart of their business. Looking at your company valuation, this will be the highest component in two to five years.
New Key Partnerships:
The goal is to get some commission based on the sales of those services. As a vCIO, you are making decisions on behalf of the client, which means you are going to face problems and look for solutions. Your marketplace is the set of solutions looking for problems. You are the interface between the two worlds, coupling problems with services.
If you think five years into the future, 75% of an average client's budget will come from cloud-based solutions. It’s not difficult to calculate how much money an MSP could make based only on recurring commissions. A general cloud-based provider (Salesforce, Google, or Microsoft) could offer 8-10% of the sales recurring. A smaller niche provider could leave 20-30% of the sales on your side. Revenue could be coming in every month with just these partnerships.
This is a cloud broker model. However, we are not brokering just traditional cloud service providers, but every software company, because everybody will be switching to a cloud-based delivery model in the near future.
New Cost Structure:
Nothing has changed. We are probably paying more to create marketing content, education, and to train ourselves and our staff.
New Revenue Streams:
Plenty of new possibilities here.Revenue streams: the vCIO and IT management framework implementation projects have significant power. These projects create all the prerequisites for IT management including procedures, processes, strategies, plans, contracts, and agreements with vendors that have to be created to manage the environment.
The sales process has to be adopted in the early stage of the market. Delivery must incorporate a new role. Processes and procedures must drive the new role, instead of doing it ad-hoc, to gain recurring predictable and scalable service revenues.
A new way of connecting problems to solutions comes from the nature of the vCIO role. Creating such a marketplace is a natural move to make the business more predictable and scalable .
Conclusion:
These are two big trends of technology - it’s becoming easier to use while management of all the choices is more complex and creating a tornado. If you think you are going to be able to stay only a 1.0 MSP, cloud and reduced complexity is going to put you out of business. If you are not getting into IT management, you are missing the boat.
The new model will enter into the mainstream in the next few years. As it does the incumbents will have tremendous advantage over new entrants. The learning curves, the thought leadership, and the processes are hard to copy or implement quickly. In my opinion, someone who invests now and spends the next few years developing this model would be reaping the profits in the following 5 to 10 years.
During the next session, we are going to talk about the specific MSP 2.0 related Projects, Ongoing Services, and the natural adoption of the model in 12-24 months, so stay tuned. Subscribe to the Blog alert on the top right to make sure you get the new articles.
The process of becoming the Trusted Advisor
For Managed Services Providers (MSPs) the ultimate goal is becoming the ‘trusted advisor’ on all things IT.
We’ve created a process which enables MSPs to earn this trusted advisory role as fast as possible. The key is to understand the client, and in turn help them understand their situation and their opportunities.
Looking into the 7C Methodology and processes can be a tad overwhelming at first, we know. It’s so effective because it’s comprehensive, so there is a learning curve. However in our continuous effort to make everything as simple as possible, we’ll start by emphasising a couple of core concepts.
One of the crucial elements is the client reframing process. From the client’s perspective it’s a discovery process, the goal of which is to make the necessary transformation to start working with the client at a new level. The key component of the process is the Reframing 7C canvas workshop, where we ask questions of the client’s business in order to help the client rethink basic assumptions about IT and its management. Normally such a fundamental shift is a tough, very high level process, but if you’re properly prepared to ask the right questions and challenge the client, it can be a very easy and straightforward process.
Client Discovery
So to be able to conduct the workshop - the central element - with confidence, we have to be as informed as possible regarding the client, as well as the nature of the company itself: the key players, industry etc. We need a streamlined data acquisition process to be able to immediately focus on what matters. With an established client this is much easier...it’s the new for whom you must prepare a bit more.
If you peruse the 7C Report, you’ll find it entails all this needed information about your client in IT function and their IT management perspective.
To be able to get the necessary data from the client and to be able to make the analysis and build the report, you need input. This input comes from the questionnaire you get your prospective client to fill out - not the client's ‘IT guy’, or service provider, but the CEO of the company -the one responsible for the IT in general at the senior level. We’ve provided several helpful methods encourage them to fill out this questionnaire. If it seems like a big deal for them you can infer either that they do not trust the value of the process, or that they see little value in IT generally. In either case you can make the transition with the workshop, so do your best to get started with the questionnaire.
This is the discovery of the client that prepares for the workshop.
Reframing Workshop
In the workshop you are going to use the 7C Canvas as a companion. It goes on your wall and comprises all the building blocks of the competitiveness of IT.
This is meaningfully accessible to the client: there is the IT execution segment, and the IT management - both cost-effectiveness and the competitive edge. It creates a conducive platform for talk about the company's challenges, issues and the possible IT related solutions.
First of all the Canvas will assist your confidence in the meeting, with the information on the wall 100% aligned with the report, scores, etc.
Secondly, it outlines the structure of the session, which in turn helps you to facilitate it.
Thirdly, it engages the clients in conversation - this is a workshop, and your goal is to work together and strengthen the relationship.
Fourthly, unlike some workshops, the Canvas remains, a good basis for further conversation between the CEO and the rest of the company.
The outcome of the meeting is some initial action items involving overall objectives, directions, and possible initiatives or projects.
Action Plan
Your next duty is to build a comprehensive action plan for them based on the results, and set a possible achievable target score, and to put everything in context, set priorities, state realistic expectations about IT project sizes, IT budgets, possible results, and the necessary capacity from the senior level or from staff.
So now you are becoming a natural leader of their Global IT, not just the infrastructure, background, support etc, and you can come up with big projects and industry changing initiatives with IT. This is the process of how to start your work, what you need to achieve the first quarterly plan.
As you start the first company-wide quarterly plan (the cornerstone and "trial" of the MSP 2.0 model), you are incurring more information, more trust, and even more loyalty.
Here’s where we kickstart the MSP 2.0 onboarding process to implement all necessary parts of the model - where you are able to start the complete IT management operation with the client.
Conclusion
Maybe you see this is a long process, but slow is fast and fast is slow in this arena...the initial investment of preparation will soon lead to a pivotal element, the inflection point which is the workshop. You get the client’s attention and from there are able to reframe them. Discovery and the preparation, workshop, action plan, and finally trial quarterly management - these five components give you the proven process of client reframing.