Puzzled Over Long Drawn Out Sales Cycles and Margin Draining Discounts on MSP Sales?

The Hard Truth: No One Cares About Your MSP….It’s A Commodity Market!

When it comes to the age-old sales meeting question of “WHY should we change MSP providers?” And your 6 month Sales-Cycle is a battle over a few dollars, it means you’r competing on price – a commodity sale.

It’s not your prospect’s fault…that’s what commodity is: anyone can provide MSP services today! In fact, almost every “VAR” in your city does!!!! So now what?

It’s time to “Bridge the Sales Meeting – Proposal Gap…”

I get it… Your MSP offering is BETTER. Your people are more QUALIFIED. Your price is a little higher (but you’re worth it)…

The problem is, your prospect sees NO difference…online you look like everyone else. In fact, if you are just offering MSP – I could argue, you’re like oatmeal, and QUAKER admits their oats are just like everyone else’s…(Direct quote from the former marketing VP).

Don’t be deceived. The buyer rejects you over price, but price isn’t the real problem. It’s a value problem…and there’s a FIX.

People buy expensive stuff (they can’t afford) every day.  They see a new car, drive it, dream about it, drool over it, and eventually buy it (no matter how much debt it adds to their life). It’s their brain’s response to desire – the promise of JOY!

Here’s the thing – the joy of owning that new BMW is big, however, there’s something even more powerful than that new car sensation…

FEAR of [fill in the blank]…(Pain)…

Your brain (and mine) feeds on one of two motivations (the neuroscientists tell us)…Joy and Fear.

Most MSP sales stall due to a GAP in the sales process (It’s not price). I call it The Sales-Meeting to Sales Conversion Gap. And it needs to be filled if you want to close business…

The car salesperson does everything they can to get you into that new leather seat of the new 7-Series BMW (with over 100 exterior paint colors to choose from)…

What does the MSP / IT Services provider do?

Show some slides, explain the features, quote some prices…negotiate, try to beat the competition. In the end, the margins are thin, and conversions are low.

The result? A deal not worth the time it took to sell it.

(I Explain This In Detail in My Best Selling Book, The House & The Cloud).)

How to Turn MSP Sales Calls into Fast CLOSING, High Margin Opportunities…

Years ago (my first real job out of college working for Bank of America), I was assigned to a project working with PWC. More importantly, a crash course in high-dollar consulting strategy with PWC…far more helpful than my four years at the University.

Starting at 3 Million Dollars (our initial project budget), dozens of change orders took this project to double the revenue originally quoted! (High priced project creep PWC cashed in on)…

How did PWC do it? Too often the MSP sales process is one of bickering over a $5 dollar difference on price/workstation…

PWC leveraged one of three tools in almost every deal to avoid discounts and price pressure:

1. Assessments
2. Studies
3. Gap analysis

Note: Make sure you have my Free High Conversion Assessment Template! Access it Here!

All 3 are similar, but slightly different – highly effective, and worth mastering…

Today neuroscientists confirm, your brain responds faster (and more aggressively) to avoid pain than to get pleasure. The opportunity to buy the 7-Series might excite some neurons, but the urgency of heart failure or cancer will trump the fast-ride every time…

Three Things You Can Start Doing Right Now To Create High Margin MSP Opportunities…Using Security

1). Start thinking “Security/Risk” when selling MSP.  MSP sales are either “price” sales (Commodity Business) or “risk” sales (Translation – High Value/Urgent).

Here’s what I mean…

If you go in with features and $/seat quotes, you’re selling on price. Managed anything is a commodity sale. Everyone manages their network – there’s nothing new here.  No “paradigm shift” (in the words of Geoffrey Moore, author of Inside The Tornado)…so the buyer is left with only price and budget as a measuring stick.

The buyer will then list the pros and cons of competitive offers, working to narrow down which offer represents the best path based on cost. It’s a simple cost/benefit analysis…generally the lowest price with the nicest looking website wins.  Winning on price means a big loss in margin.  Being the low cost provider leaves you with a contract you don’t really want…

(Note: Being the second to cheapest provider does you no good at all!!!!)

But why is the prospect considering MSP services in the first place? Isn’t it to maintain computer uptime, performance, backups, etc? Behind each is a security issue. One of 7 domains named by ISC2, the common body of knowledge for CISSPs…(See ISC2.Org – 7 Pillars of Security).

It’s just that, MSP providers haven’t presented their offerings as such…stop selling the commodity…start selling SECURITY…

Want to get out of  your commodity business? Do this...turn your MSP deal into a security sale.

Admit it, MSP is a commodity…It’s OVER.

SECURITY (on the other hand) is not. But only a handful of MSP providers actually “do” and understand security…These MSP providers scattered all over your city say they manage firewalls, but do they protect data (the company’s most valuable assets)?

…In most cases, NO. Of course you’ll have to demonstrate your capabilities if you want to win the business (keep reading to find out how)…

2). Move from “infrastructure management” to “data asset protection”. At the end of the day, the non-technical decision maker is far more interested in their data than they are their network, servers, and end-nodes.

Data is the oil of the new millennium.

Data represents your prospect’s strategies, customers, next major product announcement, etc…Data is currency even when it’s not actual money…

Stop talking hardware/software, start talking data value. Consider the following:

• How long can your prospect live without data access?
• How much data can they afford to lose on any given day?
• What if their secrets are leaked or stolen by the competition?
• What about foreign governments?
• What’s their liability (if the data is stolen and published to the world)?

The number one obstacle to MSP growth is cost…”My client can’t afford another $500/month…Right?

No!

Your prospect probably spends (at least) half the price of your offering’s difference at Starbucks on any given month.  What if that business leader really believed his data were in danger? Would he trade Starbucks for secure data? But his risk has to be clear. And only you can show him…this is called EXPOSURE.  It’s the number once concern for CISOs today (Says the WSJ) – and once your prospect has been properly educated on data value and exposure, they’ll feel the same.

(This is where my Free Assessment Template Comes In)…

3). Finally, bridge the GAP…like this...(the connection between educating the prospect and proving his need through assessment).

You need something to tell the customer, “Act now!”

Fix the Sales-CLOSE gap and your sales numbers will grow!

The old-school sales rep will just keep making cold calls, looking for someone ready to buy…

Cold calls no longer work. MSP is a commodity. And there are millions of choices…many of them good choices for less money. There has to be a better way to demonstration your value…

So create the compelling event….one that demands a solution your competition can’t provide…

How to Create Your Triggering Event – One That Leads To a Sale…Using Security

The good new is, with security threats all around us, you won’t need to manufacture scary stuff…it’s real and it’s everywhere.

But don’t be fooled, it’s not the  threat of the latest hacker news blurb…so don’t start sending reprints and posting already-published news stories…Everyone is doing this, and it doesn’t work…

(Of course you’ll need some security offerings, but chances are you have a few already in place – just not positioned correctly.)

What the client doesn’t understand – is your biggest opportunity. 2 Steps to Creating a Triggering Event…

Step 1: Start By Reframing The Customer’s Mindset… This is what a sales meeting, lunch & learn, or webinar should be…an educational session where people “learn” about stuff that actually matters…The goal is to get them picturing their own situation.

Rather than talking about computers and networks, show them their data is at risk… they just don’t see it…

Back to  the heart attack…there’s a big difference (response and brain activity) between seeing the blood-work numbers, and seeing a family member suffering and close to death…

SECURITY BREACHES KILL. Find something urgent in their data and you’re ready to talk sales…

Security breaches crush companies financially, hurt their customers, and destroy employees (financially, legally, etc.),…data loss puts people out of business!  Think of a breach as an electronic heart-attack.

Done right, your educational sessions (marketing message) have one goal…to compel your prospect to look at their own risk through an assessment!

You want business leaders looking at their data, how much it’s worth, and how likely it is they’ll be compromised or suffer an attack. Proving the business is at risk is far more powerful than having prospects look at MSP features…

Of course, your prospect can’t measure risk alone anymore than I can assess my own risk of cancer or a heart attack. So what’s the next logical step?

Working with you on an ASSESSMENT…

However, I’m not going to the doctor for testing unless I suspect something’s wrong.  I have to feel some fear first…  But if someone educates me on symptoms and I think I might have some, and a simple test can reveal the truth, I’ll probably do the test.  That’s what an assessment is…

Step 2 – Perform the assessment…Assessments create the Triggering Event 90% of the time.  (Note: You’ll want this template if you want your report to actually convert to business). Without awareness, no one is going to sign up for an assessment – so you can take your “Free Assessment” offer off of your website…this type of cheesy ad will never convert to business…

Instead, start talking about data value, liability, and business owner risk…offer to wave your $5000 assessment fee, and you’re in…

Want a simple way to conduct an assessment without expensive tools and intense 50 page documents?

My free assessment templates gives you a simple way to communicate risk in just 9 pages!

The key is my Impact vs. Likelihood graph…a visual way to show business leaders what their true exposure is…a measure of Impact if something goes wrong (which they can usually tell you), against a measure of how likely that disaster is to actually occur.

Measurable risk is enough to move just about any prospects to action, no matter how budget conscious  they are.

EXAMPLE: Just two weeks ago I presented these security truths to over 25 business leaders (who had never heard of me and did not know my qualifications). In less than 60 minutes we had 100% conversion…

These business-level attendees gladly gave us permission to review and expose their risk, bridging The Marketing- Sales Gap… 

Want to close MSP business faster with less discounting? Start driving new prospects to the assessment first. Then, measure their risk and show them why they need a new approach. Risk assessments are the fastest (most effective) method for closing high-margin recurring revenue.

© 2017 – 2019, David Stelzl

PS. Get More Details in my book, The House & The Cloud, where I explain how to attract new customers, pitch your message so it converts, and perform the assessment using the template above… (CLICK TO LEARN MORE)