Archives For Managed Services

img_4248What’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

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ohioSpeaker Notes for Tomorrow’s Session in Cincinnati…

This morning I am headed to Ohio to meet with business leaders in the Cincinnati area – Another Digital Money session on Stopping Hackers!

If you provide IT services to businesses, I hope you’ll consider doing one of these with me at some point. Every business needs it, and most don’t understand the threats they are up against.

It’s a busy fall for us. Last week we wrapped up a session in San Francisco with large reseller executives, then headed down to work with a large sales team in Irvine, CA.  And tomorrow, Cincinnati, a session sponsored by InTrust-IT…

The Most Frequently Misunderstood Truth In Small Business

The big question always comes up, “Why would anyone want my data? After all, we’re just a local business. There’s nothing interesting here.”  I think Verne Harnish answered that question last week. If you’ve read his books, Rockefeller Habits, and Scaling Up, you know he’s a small business with very little in the way of infrastructure. Like me, he’s a speaker and a business coach, supported by a small team. Yet his blog post tells the story of a $400K ruse that caught him and his team completely by surprise.

Why small business? Because small businesses still have money, take out loans, and process credit cards. They have bank accounts and payrolls. Today’s hacking tools are largely automated. So sending out hundreds or thousands of scamming emails takes the hacker very little time. When one lands, the hacker will follow up. Small businesses are also largely unprotected by this sort of thing.

It might be a fraudulent invoice or request for ACH wire transfer. In Verne’s case he writes, “They sent an email to my assistant completely imitating my style, subject line, and signature asking her to wire funds to three different places.” This is getting more and more common. The more data we put online about ourselves, the easier it is for someone to impersonate us!

Tomorrow’s Session is About Digital Money and the Value of Data

Digital Money, my latest book, goes into detail on this. Data aggregation is in motion, pooling our data in one place where it can be analyzed.

There are several major data aggregators out there doing this. But the idea is to collect enough data to profile YOU. This is usually for the purpose of some analysis or marketing effort. We’re seeing it used right now in the election. That’s right. The candidates are leveraging this data to figure out who is likely to be on the edge, and needs a push. The data tells them both who to target  and how to influence them.

That data in the hands of the hacker allows the hacker to act just like Verne, or whoever they need to be, to issue orders to the team. Verne’s on stage in Russia, meanwhile his team is getting instructions to transfer funds. Will they? Of course. They’ve received these requests in the past, and they were real. There’s no reason to question them now, and the hacker knows that. These attacks are well scripted and highly successful. And the likelihood of prosecution is low.

Can it be stopped? Not completely. But there are ways to reduce the risk…and that moves us to a managed security program that involves people and technology, well equipped to deal with these common attacks. A program that detects these threats early on, before data has been compromised, and stops them before damage is done. Tomorrow, my goal is to give our audience the business-level understanding they need to make wise decisions going forward. And then to point them to the tools and process they’ll need to combat these attacks in the coming year.

© 2016, David Stelzl

 

Process Creates Profit

October 11, 2016 — Leave a comment

processAre You Maximizing Profit w/ Process?

Sales Is a Process That Must Be Built and Perfected

It’s tempting to wing it – shoot from the hip. A small percentage of sales people just seem to hit it out of the park without thinking or strategizing beforehand. But process always outperforms the average.

Jim Collins, in his book Good to Great, told us that even an average process would outperform the average player.

In my Event Marketing Success Kit, I introduced a concept called the conversion blueprint for sales. A flow chart that moves sales reps away from flawed methods like, make 60 calls per day to get 1 meeting…and close a percentage per month.  Instead, I’ve systematized the process of attracting new customers, taking them through a series of steps that create justification and ultimately a decision to buy.$1 HC Book Ad

If one point of conversion is too low, there are strategies that can be used, and tips given to perfect that point. I’ve also given average conversion rates on each, giving the rep something to compare their success to.

It’s been said that the low income earners are working hard while the higher income earners own processes. McDonalds hires and trains low income earners while those who designed and improved the process have done very well for themselves. While sales is not like building burgers, it is a process that can be systematized.

Getting Started with Process

Need a place to start? Selling everything to anyone leads to hard work and chaos. On the other hand, finding an something to lead with can save you time and offer greater value through specialization w/ higher close rates.

For instance, if you know the assessment always leads to business (or converts 60% – 70% of the time as a client told me yesterday), then you know your system works best when you focus on moving people to the assessment first. From there you can branch out into many directions, but the sales are in motion at that point.  Your income naturally goes up.

As Collins points out, the process doesn’t have to be perfect. Better to start with something and tweak it as you go. Eric Ries, author of The Lean Start Up reminds us to build, measure, learn. Rather than building the perfect mousetrap the first time around, get something on paper, begin to work it, and perfect it as you go. In the end you’ll have a much better system.

For more on how to build the right systems to drive margin rich IT services, check out The House & The Cloud…The only book I know of that explains how to sell security services with a simple, easy to implement, sales process.

© 2016, David Stelzl

 

 

graph-going-upHow Long Has Your Company Been This Size?

Can You Multiply It?

In 1995, I joined a couple of guys to build a new commercial focused reseller. Our vision was big. We were funded by an 8 million dollar CAD-CAM reseller, but we expected to exceed this by 10X…

So How Do You 10X Your Business?

First, it takes a lot of work ON your business, vs. being bogged down in the daily grind. There’s a tipping point, or fly wheel, or whatever you want to call it, depending on whose book you read.  Three things that accelerated our growth are important, because they still apply. NewsProCover

RETENTION and MARKET FOCUS…even in the mid 90s we knew we needed recurring revenue and long term clients. Getting a client takes time, but keeping one is far easier. (Check out Shaun Buck’s Book on newsletter marketing for more ideas on client retention – It’s free if you use this link).

Customer experience is a hot topic right now in every business. But the key to our success was problem solving. We weren’t going after the firewall sale, or even the storage sale. We were there to solve problems. When you solve a problem, people take notice, and retention goes up.

The first step might be surprising. It’s going after the right kind of customers. I call this people group. Even today I can point to profitable deals that didn’t create long term business, simply because the client was too far outside my target people group. It’s fine to sell something to someone outside your core market. But don’t spend time marketing to that group. Let them come to you. Take down the business and assume they’ll be moving on. Whatever you do, don’t rebrand your company overnight to find more like that.

The same was true in our 1995 start up. We sold 10s of millions of dollars to one single customer in one single year. But the chances of landing more like it were nearly zero. Not everyone agreed with me on that, but over the 5 years (before the company was sold,) those who tried never succeeded. It was a wasted effort.  On the other hand, those in our target market were by far our most profitable clients.

MAXIMUM LIFE TIME VALUE…next is understanding the lifetime value of a customer. A few weeks ago I entered an ice cream store with my family. Now we have 9 people in our family, so when we buy ice cream at a boutique, it’s a large ticket sale. But in the course of ordering, the owner yelled at my 8 year old son. My son was tired, not feeling well, and accidentally wandered behind the counter looking for a restroom.

Not believing my ears, I confronted the store owner – at first politely. But he remained stubborn, so we all walked out. What did that cost him?  He might be thinking, $30. But no, it’s far more. We travel by that store on trips pretty often. The lifetime value (LTV) far exceeds that $30. Customer experience is essential if you want to increase LTV. What about your business. How long do clients stay on your managed services? What if you increase that average by just one year? What happens to your profit?

When a new client comes on, you need a real problem to solve, and an experience they won’t forget. You need long term retention.

GROWTH AND UPSELL…Finally, the 80/20 rule says that 20 percent of your customers are worth 80% of your revenue. So what can you add for those premium customers, to give them a premium service?

A one off sale does not lead to growth. So start thinking, what can we add to provide higher level services, with recurring revenue, which ultimately increase LTV?

Let’s say you have a base MSP offering of $X per workstation – let’s say you have 100 of these. 20 percent of these customers are going to pay enough to make up 80%, so give them something more expensive to buy.  But don’t stop. The 20 customers are paying a multiple of what the other 80 are paying – and of course getting something far more valuable. But 20 percent of that 20, or 4 of them, will pay enough to make up 80% of the profit coming from the 20. In other words, you can offer a higher level service to the 4, worth a multiple of what those 20 pay.  But wait, there’s one more step – that last 20% is one person, willing to pay for one more level of service.  So go ahead and create one.

If you do the math now, you’ll see that this 100 person group is now worth far more than they were with the original MSP offering.  As your business grows, the group grows, and new levels get created, growing your business.  It took us 5 years to hit the 10X mark. Of course this takes people, time, and vision…but there’s no better time to start than right now.

© 2016, David Stelzl

 

 

2016Will You Hit Your Numbers This Year?

Increasing Your Recurring Revenue May Be Easier Than You Think

Supersizing, asking if you want fries with that, and bringing out the dessert tray, are all strategies restaurants use to increase revenue. And they work!

My son is a manager at a local Charlotte restaurant. He tells me they are closely monitoring, and rewarding the waiter with the biggest check. Their wait staff are trained to sell, and adding things like dessert and drinks to the tab raise the profits significantly. Asking has a lot to do with selling.  But targeting those who are already eating is also a key part of the strategy.$1 HC Book Ad

How to Increase Your Ticket Per Customer Now

If you’re trying to increase your monthly recurring revenue number before year end, you have just 3 months to do it. Here are a few things to consider…

  1. Firewall Monitoring. If you’re already doing some level of firewall monitoring, are you actually providing 7 by 24 monitoring? If not, this is worth between $100 and $500 or more per month for small businesses. Do they need it? If they don’t have a solid detection strategy in place, and their data is important to them, this might be the place to start.  If you can’t do it internally, consider outsourcing it to a third-party security operations center like Foresite.
  2. Backup and Recovery. Do all of your clients have offsite, cloud based backups?  If not, a disk failure could be disastrous. Disaster recovery experts tell us that about 77% of restores fail. If they value their data, and their restore point objective (How much data they can afford to lose) is important, this might be a good add-on.
  3. Mobile Security. More threats are coming, targeting phones to steal login credentials and spoof email. Your clients are probably using their phones for business, but the adoption on mobile security software is still extremely low. Per device, it’s not a big number, but the lifetime value of this customer goes up significantly with a small add-on per mobile device.
  4. Advanced Firewall Features. Many of the small business firewall products are now available with add-on features like threat emulation, sandboxing, and SIEM-like features. Selling a firewall might be hard, but what about providing these in a Hardware as a Service (HaaS) offering?

How to Get Started

Contact your current clients, offer a security update or briefing (using the concepts in my book, The House & The Cloud), and move them to an assessment. Since they are your client, I recommend waving your assessment fee, using the steps outlined in my book (Above) on page 94 – 200. 

If you follow these steps, the likelihood is high that you’ll come up with problems. If nothing else, they probably don’t have adequate protection against ransomware, and their endusers probably need a more thorough understanding of ruses be used to con them into wire transfers, downloading malware, and giving access to fraudsters.

While a new prospect deal might take 3 months from start to finish, these add-on deals are more like the fries at McDonalds. The customer is standing there, you just need to make the recommendation.  Some percent of them will buy.

© 2016, David Stelzl

 

miami image

This fall over 600 financial security officers and supporting staff will be heading to Doral! In case you haven’t heard, my last book release, Digital Money, is with the publisher, and this is just one of the many venue’s I’ll be presenting at to show business leaders why they can’t continue to operate securely without changing their security strategy.

It’s time for every technology infrastructure and managed services provider to get serious about security. It’s not an add-on, it’s the most important part of your program.

© 2016, David Stelzl

IMG_6236Your Client’s Data Value Demands a Response

Last week I spoke at the Oklahoma Technology Symposium at The Cox Convention Center downtown, and then again to business leaders at the Gailaria Country Club north of the city. (Thanks to AnchorPoint Security and Check Point Software.)

The value of your client’s data is rapidly growing, and this was central to both of my presentations.

The Proof is in the Ransomware

People are paying the ransom. They can’t afford not to. Just this morning the WSJ reported another incident, this one related to the Leavine family NASCAR race team. They only paid $500, but $500 for what? The true cost of a breach like this is much greater. The FBI estimates the total cost per incident to be around $333,000! And the incidents of ransomware now four times what they were last year.

If you’re not talking to your clients about ransomware, now is the time. But more than talk is needed. They need answers.

Start by assessing their exposure to this type of attack. Can your client detect it coming in with their current security set up? My guess is that most can’t. That’s a managed services offering right there. Few companies will have the expertise to do this internally. They also need user awareness training. One place to start might be my latest book, Digital Money. It will be out by the end of this month!

The fact is, more data is being created, and just about every business is down when their computers are down. Data defines just about everything, including all of their clients, R&D, projects, finances, etc. Without their data, they’re out of business. What’s that worth?