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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?
After All The Work That Goes Into Security Assessments, This One Thing, If Missed, Will Make The Entire Process a Waste of Time…
When the Truth is Clear…Cancer, Heart Attack,…Breach…People Act. With Security Your Message Must Connect and Your Audience Must Feel The Pain.
You might think it’s callous of me to compare your own life (risk of cancer) to a data breach, but the truth is, data is what many companies see as their most precious asset.
Right or wrong, given a choice, companies will part with a few employees before facing business failure. And data loss often begins the downward spiral that can’t be stopped.
However, getting the company leadership to see these business-crushing threats, before they happen, is not easy. Following is the strategy I’ve used to turn week-long assessments into annual contracts, and more.
Rule One: Don’t Present Without The Asset Owners!
Asset owners are those with liability. Have you ever presented a cost-saving solution to IT directors or middle managers? Tell them you can save them money, reduce FTE (Full Time Employees) by 50%, and improve quality of service, and they’ll quietly dismiss you as unqualified to do business at their firm. They’d rather build an empire than save money.
Take it one step further and show these cost-center agents how their personal role in the company (along with associated costs) is no longer needed with your new proposed automation process, and you might find an anonymous death threat in your mailbox.
Bring in the asset owners and something different begins to happen.
When it comes to security, technical staff rarely understand the value of corporate data, or the relationship between uptime and profit, according the several CISOs I’ve interviewed this year. And, they’re interest (probably driven by the need to make money) tends to be self serving (See Jack Eckerd’s book, Why America Doesn’t Work).
Tell executives their systems are likely infected with software, giving hackers the ability to listen in on private meetings, watch them in their office or bedroom, read their email (including personal mail), and track their whereabouts, and you’ll get a response similar to that of a home owner waking up to their fire alarm. That same bot detection among IT folks will call for some patching next week, and perhaps an AV product review.
The Underestimated Power of Free
But what happens when you show up and the asset owner is suddenly not available?
If you’ve charged $100K for this assessment, you’re in good shape. Meet, sell hard, and find a way back to the asset owners…you owe them the deliverable.
However, if you’ve conducted your assessment pro bono, you’re also in good shape!
As a free service, you control the deal. You don’t owe them anything. And since you’re liable for what you deliver, you have the right to delay the meeting until your asset owner contacts are free. Just let them know there are urgent things they need to hear, so the sooner the better.
(Get more on why Free Assessments Are More Powerful in my book, The House & The Cloud 2nd Edition).
Your Meeting Agenda Re-Engineered to Convert
Sure, you could email executives your findings, but digital findings don’t convert. Face to face is the only way to deliver the devastating news that an attack or data loss is eminent if action is not taken.
Here’s Your Agenda:
Start with their words. You’ve interviewed them (hopefully). More importantly, you’ve spoken with both executives and the people driving the daily business (end-users). So you know how important their data is, how long they can be down, and what can’t be seen but the competition.
You also know what’s not urgent in their minds. So avoid spending time on the non-urgent, even if you think it’s urgent. (e.g. Policy).
Next, list the top priorities. Did you discover evidence of compromise? Any malware activity, or symptoms on the same, is urgent. Note, patches, outdated systems, and EOL software are not urgent. A Failing backup solution (on the other hand) is urgent. You’ll need to now why, and how to prove it. Consider things you would want fixed this afternoon if you were the asset owner, and draw out the urgency.
Next, it’s time to create some vision. You know how they work and where they’re headed as a company (from the interview process). So, using their current set up, begin to pose a number of WHAT IF scenarios. This is how you create a vision – allowing the buyer to picture something they really do want.
“What if your end-users could work without ever having to guess whether or not an email was infected with malware?”
“What if, whenever someone tried to connect remotely, your network would verify who the user, check the system for malware and updated patches, etc. and only after approved, grant access?”
“What if we could take your restore time down from the estimated 5 days to the required 4 hours?”
In doing this, you’re watching for the nodding heads. Not those nodding off, but people in agreement. You want physical response / emotional response. This is your trial close. The power of trial closes is important. If you can get your audience nodding and saying yes along the way, you know, when you’re all done, they’ll keep nodding.
Finally, sell the vision – “We can get this done by the start of next month, etc.” The obvious question is, how much ($$$). Check out chapter 11 of my book, From Vendor to Advisor to see how to price this, and when to share the price.
© 2017, David Stelzl
What The Lazy MSP Companies Aren’t Showing Their Clients
Assessing Risk is the fastest way to land new logo business in the MSP arena. And if you want to build a long term, profitable business, you’re MSP is going to have to go MSSP…
(Note: I’ve purposely left out the heavy technical jargon to make this readable by sales – if you actually do the engineering work, you’re probably wanting a more technical deep dive. My goal here is to help sales reps sell the one thing that will overcome any IT budget objection.)
- Get More on How to Sell Profit-Rich Security Solutions in my book, The House & The Cloud
While 90% of the tech companies I speak to CLAIM they do security (on their website), only a handful actually do. If you want to set yourself apart, learning to discover urgent issues (already present) on your client’s network will do it.
Over the past several months I’ve written numerous articles on how to sell, deliver, and convert assessments to long term annuity business. This one last step in the actual assessing process is arguably the most important.
You Can’t Just Look At Perimeter Scans and Configurations
In this YouTube video (published by Alienvault – below), the speaker is explaining the dangers of connecting to Tor or using BitTorrent, as examples of traffic symptomatic of botware. Check out 0:48 in the video below for more threats he uncovers…
These are the urgent issues you need to move deals forward!!!!
Traffic patterns also reveal reconnoissance efforts underway by hackers – thieves gathering information to be used in a future attack.
You also want to know if malware is already installed or in the process of being installed through phishing attacks or web-threats of any kind…port scans in most cases will not do this.
The problem is, most assessments I review in my coaching calls show nothing regarding traffic or connection activity between workstations and the outside. Why?
Because it’s not easy.
In other words, the MSP providing the assessment is either too lazy or too cheap to do it, or just doesn’t know what they’re doing.
If you sell (or use pro bono) assessments, with the goal of opening new doors in the accounts you serve, make sure your professional services team understands the importance of traffic analysis and has the tools to do it….
Lots Of Data, No Connection, Equals Meaningless Data
Today’s technology is great at logging data…but not so great at drawing out intelligence.
That is unless you know SIEM…Security Information & Event Management.
The ability to take all of that data from AV software, UTM firewalls, IPS devices, etc. and make sense of it has been a road block for just about any company short of large enterprise…
There are several options including some UTM firewalls, products like AlienVault and Arctic Wolf (positioned for mid market), and BlackStratus’ recent entry into mid-market and SMB…Cybershark (Which can be white-labeled and offered with full SOC services – with little of no investment!)
With SIEM now available as a cloud offering, there’s really no excuse for not doing this.
Key Point in the video below (at 2:35) – None of this information is actually interesting unless you can get the analysis, and make the data actionable.
Unfortunately, most SIEM technology won’t really do this for you (Even though AlienVault and others claim to). In the end, you (The Rep) must read the report and see if your client is going to be moved by it.
If not, rewrite the execute findings as a separate report – more to come on that in a future post.
This takes us back to an earlier article on QUESTIONS TO ASK…The most important part of the interview process is in gathering the mission critical data offered only by executive management.
MTD, RPO, Etc…think Business Impact Analysis…all security issues are disasters and should be viewed just like Disaster Recovery…But you’re competition isn’t doing this.
Key Moment In The Video (3:50)
At 3:50, this video shows actual malware infections being installed – not only is this type of activity undetectable with simple observation, your Network Patrol Product is not going to see it either!
Only with something that looks at host intrusion does this become evident. The good news – once you have an MSSP offering installed to do this type of analysis, it’s easy to justify keeping it there – this is annuity business that self-justifies.
Check Out The Entire Video Right Here
But Remember, this is not the most important tool – your QUESTIONS are.
Armed with the intelligence that comes from talking with executives and other asset owners, this information suddenly makes sense in helping a client determine their true threat levels, while providing you with the justification you need to move forward with MSSP.
Copyright 2017, David Stelzl
For more insights on how to sell assessments and larger security deals, check out one of the only books written to resellers and MSP providers on how to sell Security: The House & The Cloud…