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How to answer sales objections when selling MSP solutions using risk assessments [free assessment template]Continue Reading...
It’s Easy to Leave A Channels Event, Distributor Conference, or Mastermind Group feeling good about your MSP business. After all, your business is producing a profit.
You’ve been in business for 20 years or more. And you’ve managed to weather several economic downturns over the past couple of decades.
Don’t get too comfortable…
The high-tech business is a fickle thing…there are economic downturns (recessions, depressions, or whatever you want to call them…) and then there’s commoditization. The latter is your greater enemy.
Like medical and grocery sales, people need their computer. The high-tech business (servers, storage, data center, etc.) has been a high growth industry since I entered the business world out of college. It just has…perhaps it always will…tech is the lifeblood of most businesses today. We can’t work without it.
However, It commoditizes.
Building Sustainability Into Your Business
This week I’m attending a marketing conference in Cleveland OH. Over 1200 small business owners packed into an auditorium listening to some of the greatest entrepreneurial minds in world.
This morning’s session focused on sustainability.
As the speaker unfolded over an hour’s worth of strategies, the MSP business came to mind…a business that relies on long term customer retention.
MSP sales are not transactional. In fact, if your clients only stayed a month or two, your cost of sales would eat your business alive. You really need them to stay.
Historically, retention in the MSP business is 5 years (average). Yours might be more or less, but you should know your number. The goal is to increase it. If you could add just one year to your average (assume you have 100 clients signed on), that’s 1200 months of MRR (Monthly Recurring Revenue) added to your business in that one single act. Or think of it as signing a 1200 year contract with your next client!
5 Things You Should Be Doing To Create Sustainable MSP Business…
Build Evergreen Assets. If you’re taking care of your customer, you’re probably meeting quarterly to review their IT. Hopefully you’re also giving them guidance. During the initial sale you also had to review their business and create some sort of proposal.
However, building everything from scratch is destined to fail. The cost of customization is high, and the likelihood of messing up is high too…Better to productize your offerings…here’s how.
First, you should be selling packaged offerings. There’s your core MSP offering, and then there are add-ons (like riders on an insurance policy). However, when you buy a car, those extras are often bundled into packages. The electronics package with the stereo upgrades. By doing this the dealer eliminates the headache of creating a completing customized quote.
In this case you need at least one (but probably more) security package…one that can be added to their existing MSP agreement (if someone else holds that contract), or attached to yours (now or later).
There’s also a maturity model…if you were to create a maturity roadmap for security, when your new customer joined your program, you would figure out where they are right now, and begin taking them through your 24 step program…certain mail pieces, meetings, assessments, and sales efforts would be made along the way – all predetermined.
Building Identity. Customer loyalty is also a key to sustainability. Not everyone will be loyal, but the hotel and airline industries, as well as Amazon and Starbucks, have all proven that people will join the club if you sell it the right way.
It turns out identity (the people group, brand, or team I identify with) will drive my behavior faster than just about anything else. I’m a lifetime platinum member of Marriott…when it’s time for coffee, I’m waiting in line at Starbucks in the airport, even though there’s a coffee shop right across the hall with no wait. Why?
I’m part of the club. I identify myself as a Starbucks customer, I stay at Marriott unless there just isn’t one…and I’m not the only one. If you’re sitting there telling yourself you don’t do that, remember, you’re not you’re own customer…you want to sell to people who will sign on with a brand and stay.
Sell to The Right People. There is a people group out there worth your time…but there are also people not worth selling to.
Your job is to identify the people group you work well with, and go after them. I was talking to a very successful entrepreneur this week – he told me he sells to men, age 45 – 60, ambitious, hard working, leaners, who are already in business. He also noted it’s best if they are married, politically conservative, etc. You might think he’s too narrow. Yet he’s made millions (plural) of dollars in personal income annually over the past decade.
Signing the wrong people onto a business that demands retention is a recipe for failure.
When identifying your perfect customer (the customer avatar) you’ll want to know how they think…the more you know what’s on their mind, the better.
Today’s speaker said it like this…”Know what they are thinking about every day as they leave the office…know what they talk about around the dinner table each evening…and if they wake up at night worrying about stuff, you should know it.”
In the End They Need Hope. Dave Ramsey does one of the best jobs of selling hope. He tells his team, when you pack up a book or CD to ship out, it’s not a book, it’s a package of hope.
With MSP; remember, most small businesses are frustrated with computers. They don’t understand them, they don’t really trust them, and when it comes to security, they’ll do just about anything to avoid thinking about it. Security issues just create more stress…
Want To Build The Sustainable MSP Business?
Stop trying to copy the models presented by MSP cloud offerings around you. They don’t know how to sell to the SMB market. They know how to sell to you…I’m talking about the SolarWinds, Continuums, and nAbles of the world…
Be radical…start thinking about what a small business really needs…what would remove all the IT stress from their world. And then start providing it to your ideal customer avatar. Add one year to your average, and then continue to journey. It’s the road to MRR growth…And it’s sustainable.
© 2017, David Stelzl
P.S. Do you have my Security Assessment Report Template…Designed to move prospects into your program quickly?
Your Risk Assessment Is The Fastest Way to Drive New Business, But Only if You Follow This Formula…
On one hand, risk assessments are a great way to start an engagement, or close a sale. On the other hand, they offer great value. Should you give all your value and insight away???
It’s a hard question that demands an answer!
The Point of Assessing Risk Is…
Several weeks ago I wrote an article defining the assessment (if you’ve not read it, I recommend going back to better understand the truth behind assessing risk and growing your business).
The bottom line is, Assessments are like health checkups. If the patient has URGENT issues, yet chooses to NOT take action, the doctor’s efforts are wasted. Even more, if most of that doctor’s patients never enter treatment (and are dying), he has failed.
If there are urgent issues, action is required.
And it’s your job to sell the customer on taking action – not for money, but for the livelihood of that customer’s business. With remediation in mind, your risk report is a marketing document. You goal is to sell your customer on doing something!
Amateurs Focus On Front-End Selling
When I hear, “We don’t give away the assessment”, I think to myself, “Amateur Thinking”. Front-end, is a funnelology term – It is the process of capturing a lead and ascending that lead up your value ladder.
The sales process starts with a lead magnet (some freemium offering) to attract qualified prospects (Think: Opt-in). You provide value and your buyer wants more. So they ascend over hurdles of indecision to the point of becoming a buyer.
Some prospects will drop out immediately, grabbing the free stuff and moving on (grab and dash). It’s okay…I’ll explain in a minute. Others will buy your initial offer, or perhaps engage with you in basic managed services (New Customers).
A select few will become hyper-buyers…your best customers. Hyper-buyers buy whatever you recommend because they see your value and trust you to advise them.
The front-end has to be easy (think, free or close to it). You might offer a white paper (which I seriously don’t recommend). Better choices include, special reports, quizzes, assessments, lunch & learns, etc.
Some front-end options convert quickly. Others, not so much. Signing up for your mailing list or free e-zine doesn’t make much sense these days. No one is choosing to get more spam email.
All great front-ends cost money. The idea is to spend your money with ROI in mind. The company that can spend more upfront (marketing), and still measure a strong return on the back end, wins.
Did you catch that? You’re not trying to minimize the front-end cost (or your marketing budget). You’re trying to maximize conversion and ascension. If your backend works, you can spend more upfront, beating your competition.
The assessment may be costly, but done right, it can have an extremely high ROI on the backend.
Qualified Prospects Only
Conversion (like getting people to a lunch & learn) is one thing, converting from free to fee is another. You don’t want to invite people for a free iPad…you’ll end up with a bunch of IT folks that want free gadgets (these are not buyers).
If you want qualified prospects, you won’t give your free assessment to just anyone. And that means you won’t advertise it on your webpage. Freemium means high-value and special, and should be guarded.
To qualify, you want to have a freemium offer, like an assessment, and have a clear avatar of your target prospect.
Let’s say its the SMB business owner with 25 to 250 users. Inviting that person to a lunch & learn is a qualifying step that gives you the opportunity to actually meet face to face. It’s costly, but if your conversion is high, you won’t care.
Then converting them (given the right message in your lunch & learn meeting) is easy…We’re converting over 90% right now with a security message designed to instill urgency. It leads to an assessment – we offer this analysis right there in the meeting. But our description is vague…on purpose. You see, we have one more step; it’s a phone call.
On our initial call we have the opportunity to ask them about their business and their role. If they turn out to be someone other than a qualified buyer, we make the assessment a simple over-the-phone questionnaire. If that person is a business owner, in charge of a possible qualified company, we move forward.
Our assessment engagement involves that decision maker all the way through to the deliverable. If our key contact (asset owner, I call them) drops out at any point in time, we stop the process.
Our conversions to business range from 60% to 80%, and our sales cycles averages a couple weeks to a couple of months. (But not 6 to 9 months). These contracts range from $1000 to $5000/month, with a 5 year expected lifetime value. So how much can I spend on customer acquisition (in this case a lunch & learn and assessment)? Do the math, it’s a big number.
Selling The Free One Isn’t Always Easy
But there’s still one more hurdle. Selling free assessments has it’s challenges. Free sometimes means no value. And getting that initial meeting may also prove to be a challenge.
The 60% to 80% close rate is attractive, so I know I want to sell the risk assessment. I am willing to give it away, because my ascension process works predictably well, and the ROI is there. I can afford it and the return is evident.
However, the assessment can’t be the first step in my sales process (or funnel).
Most of my clients sell assessments by using something upfront to attract clients. eBooks, followed by webinars, with an offer to assess, can work. Live lunch & learns, using a hard copy letter invitation work extremely well. And any excuse to get a meeting (such as referrals, product or quotation requests, etc.) can be turned into an assessment.
In my book, The House & the Cloud, I explain how to transition just about any meeting into an assessment (chapter 13), and then later in the book (Pg. 194 – 200) I explain how to move through the assessment in a way that engages asset owners, and leads to a sale.
The most important thing in this whole process is to track your conversion metrics. Make sure you are at least breaking even. Once you break even, start tweaking your funnel to modify and grow your ascension process.
As you perfect your conversion metrics you will be creating a long term, predictable profit machine.
©2017, David Stelzl
NIST Framework: You’ve Heard It, Lot’s of People Refer to It, But Do You Know What the NIST Security Framework is…
If forced to… (sales person to client) could you explain what the NIST Security Framework is?
NIST is important to the Assessment process as it gives you an easy reference point from which to assess and define risk. In a sales situation, the customer (if they have any knowledge at all) should be asking you how you approach assessments.
How will you answer?
If you’ve read my book, The House & The Cloud, You already know most of the NIST Security Framework…
(I wrote version one of The House & The Cloud in 2007, so you know I wasn’t just copying NIST – it’s a 2014 publication – of course I’m not claiming to be the author of NIST either).
Either way, it’s important to know NIST if you’re going to talk security. So here’s the simple “sales person level” overview…
Notice the outline below. There are 5 major components. You’ll remember from The House & The Cloud, PDR – Protection, Detection, Response (Chapter 13)…NIST simply adds IDENTIFY (on the front end) and RECOVER (on the back end).
In my 2007 book (updated in 2015), I develop The IDENTIFY aspect in more detail (just under a different heading – the Three Important Questions You Should Be Asking Asset Owners). – See Chapter 13, The Three Questions.
- What are you trying to protect?
- What are your relevant threats?
- How likely are you to be able to detect and respond before damage is done?
These three questions provide a clear understanding of just how asset owners (and IT) view their data, their threats, and their current approach to security. In most cases they have no idea that certain digital assets even exist, and chances are, IT cannot define their firm’s most pressing threats.
PDR – The Core of NIST, But Selling It Requires Strategy
The House & The Cloud is a sales training book, not an SE’s Handbook. So use NIST as the foundation for your security approach to provide credibility in the sales process. Your client/prospect won’t know my name, but they can Google NIST.
It’s not necessary for you, the sales person) to be fluent in security architecture and the various approaches to remediate risk.
But getting buyers to part with money for NIST is a hard hill to climb. Chapter 13 of The House & Cloud provides the science behind the marketing approach. In my presentation (the one outlined in chapter 13) I first must break the preconception that my prospect has security “Covered”.
The conversion happens when the client sees their investment tied to column ONE – the NIST protection column (as is explained in The House & Cloud). Protection alone (keeping people out) won’t stop hackers…but until the client sees the truth (and admits their mistake) they won’t move forward.
If you want to be the Trusted Advisor, you must be TRUSTED, and ABLE TO ADVISE…and that means you client must first admit they need advice!
The House & the Cloud solves the problem of how to explain what security should look like, while getting the prospect to admit they have it wrong (Assuming they do).
Finally -Recovery…As in Disaster Recovery
My response calls for Realtime Response…I make the point (in The House & Cloud book) that faster response is needed – even realtime response to stop the threat before harm is done.
In other words, if I could somehow stop the ransomware before my data gets encrypted – I would be a lot better off.
However, stopping disasters is not always possible…and so the Disaster Recovery Plan is essential…developed, documented, and tested regularly. This last component needs work, especially in the small/medium business markets…
Disaster Recovery offers another great opportunity for resellers in the IT Management / MSP business! (And I’m talking about a lot more than just Backup and Recovery Services).
Check out this short NIST video from Rapid 7 for the overview…(Thanks Rapid 7, this clears up a lot of confusion).
© 2017, David Stelzl
You Have a Website, Right?
Does it Do Anything Useful???
What I mean is this…Is your website a billboard online, or does it actually attract prospects? )Take note, I’m about to give you the secret to Internet Marketing with your website…)
Or did you just set up your site to education current customers for free? Probably not.
My guess is you wanted people to visit and buy…but they don’t. Why?
Probably because there’s nothing there to convert them. (In a minute I’ll give you a free sample you can use on your own site…)
When I visit my Amazon account online, I am probably shopping for something. Even if I search for a product, like “Northface Tent”, amazon comes up. But I always buy stuff on Amazon, so I click and see what they have.
What happens when you Google “IT Services”, or worse, “Computers?” I just tied “Computers”. 976,000,000. That’s bad. Are you in there somewhere?
The Lead Magnet Strategy Works, If You Design It Right
I won’t go into great detail here. Instead, I have a free lead magnet you can download right now. But before using it, it’s important to understand it. And if you understand it, you can create more!
My Free Lead Magnet <<< Download it Here
In fact, I was recently listening to a presentation by a guy who writes ebook marketing materials for a living. He’s written dozens of like-ebooks for a single client. In one case a dentist had 26 ebooks on the dentistry website, published under different types of dental challenges.
So if you were having problems with your teenager’s wisdom teeth, you could go to his site and read his 20 page ebook on “How to Deal With Wisdom Teeth”. (As you can imagine, he’s advertising for paid traffic, and directing different dental searches to his site).
Of course you’ll be asked to enter your name and email before downloading…If the content is good, it’s certainly worth the exchange. But expect to be marketed to once you’ve finished your download. And rightly so…if you have a toothache, you’re ready to buy!
What Topic Is Your Ideal Prospect Going to Read About Right Now? (Hint: Not Managed Services)
It could be a lot of things. If you call on CPAs for instance, they might want to know about recent trends surrounding Ransomware.
But you’ll need a title to grab their attention first. A title about Keeping your CPA Business Up and Running During Tax Season might do it!!!! Or however about…
“What Will You Do If Ransomware Hits In The Height of Tax Season?” Hmmm, can you imagine what would happen if your own CPA were hit right before filing your taxes this year? That would be bad – but worse for him than you.
Get Some Insight Before Moving Forward – This Business Building Strategy Works
Download my latest ebook and read through it. Here’s what I want you to notice (Note, I am not saying this is perfect – but it does have what The Experts recommend).
- A Title That Matters – Digital Revolution is a buzzword that will draw in a certain crowd worried about companies like Amazon (and any big-online business stealing the show).
- Punched Up Copy…this means I’ve applied the rules of copywriting using by many of the great copywriters (Gary Halbert, Victor Schwab, and John Carlton for instance). Meaning, short punchy sentence structure, cliff hangers, transitions that keep the target audience reading, white space and pictures, power words, and much more.
- There’s a Strong Call to Action…and it’s written to your customers, calling them to action now?
- And it’s a Specific Call to Action – an assessment. And justification is given to act now?
- It Starts Where They are Now – Meaning the document considers what the customer might be doing right now before launching into an offer or call…, business growth and competitive advantage (customer experience). From there the ebook takes them where you need them to go (security).
So without going line by line, put on your “Target customer hat”. I mean, think for a moment, as though you were your best customer.
Download the book, and read it.
If it draws you in, perhaps your target customer is the one I had in mind when I wrote this manifesto. If not, use the same format and feel, and write your own…but I highly recommend having someone with Copywriting skills take a look before you go to market with it…chances are you won’t catch some of the subtle marketing-science behind what I’ve done here, making it hard to recreate the magnetic affect you desire.
In any case, give it a try…this is far easier than making another 100 phone calls to people who don’t want to talk to you right now…
© 2017, David Stelzl
What’s Your Value Proposition?
Have You Ever Tested it With Customers?
Or are you just going off what some other seemingly successful VAR is doing.
This business is incestuous.
Resellers meet with each other quarterly copying each other’s ideas without actually testing anything.
It’s also deceptive.
The 1 million dollar reseller looks enviously to the 10 million dollar reseller for direction. But the fact is revenue is meaningless with privately held companies working on single digit margins.
Everyone Has The Same Value Proposition, “Our People Are Better”.
At Ingram ONE this week I’ve met with numerous resellers. It seems like everyone has the same value proposition. Some more sophisticated or sporting bigger certs but at the end of the day everyone looks the same on paper.
Is Your Marketing Working? What About Sales?
Conversion is the measure of success. If your website doesn’t pull in leads it’s broken. If your assessments don’t readily convert to business they’re useless. If your first meeting presentation doesn’t convert to something great it should be trashed. And if your prospecting efforts (cold calling or whatever) are not landing meetings it’s time to reengineer the process.
There are 4 Value Propositions, Only 2 Work…
in this economy. I list all four in The House & The Cloud, however these two are what you need to know:
- Risk Mitigation
- Customer Experience (a form of competitive advantage)
The second points to custom software and digital connectedness with the customer. It’s Amazon morphed into whatever business you’re calling on. The other is minimizing risk.
Different types of risk exist in different vertical markets. The bank is more concerned with account balances being off. Healthcare wants to know life support systems are up and patient privacy is sure.
Stop thinking your people are better, your workflow if more efficient, or that your IT Service Offering somehow provides a more efficient way to handle IT. It might all be true, however the business owner or CIO is not going to see it as unique.
© 2016, David Stelzl