Archives For Managed Services

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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?

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Aggregated Data In The Hands of The Hacker

Is Allowing Hackers to Become You…

Yesterday I presented to business leaders in Santa Clara California, and the Santa Clara Marriott Hotel…I was surprised, but not so surprised, at how few of our attendees had recently performed risk assessments. Many of them had never had an actual risk assessment!

In our session we covered a number of evolving  trends – one important one is the trend of aggregated data and deep machine learning. If you remember the recent report from Verne Harnish – the emails used to steal over $400,000 sounded like they came right from Verne’s desk. How does that happen?

We’re all being watched. Our data is being both monitored and collected. It’s being aggregated and analyzed.  

Our data describes everything about us. Where we go, what we do, what we view online, where we eat and shop, and everything we write. This data is stored, aggregated, sold, and stolen…in the hands of the wrong people, it can be disastrous.

Using deep machine learning computers create an amazingly accurate profile, exposing things we would never share openly. For instance, who has posted their salary on Facebook? Probably no one – yet Facebook advertising can easily target and audience in a specific income range. How does it know?

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With the right data, just about anyone can become you online.

That means they’re sending email, giving directives, and even interfacing with your customers and suppliers. But don’t think for a minute that they’re helping you out. In Verne’s case they were ordering Accounts Payable to wire $400,000. His team had no way of checking the validity of this request – other than making a call. But given hundreds of request just like this, who would question it?

Several attendees came up after the session sharing similar stories in their own businesses.  In the end, our sponsor, Truman Roe, President of  TruTechnical offered each attendee a risk assessment. From my count, every company in attendance took him up on the offer!  This is the best place to start…with a clear measurement of risk, companies can be more confident in how they approach their security strategy.

© 2016, David Stelzl

 

 

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

 

If People Aren’t Responding to Your Message Keep Reading…

Technology Providers Need to Refocus If They Want to Help the Businesses They Serve

Last night I spoke to my church congregation on the  topic of security. That’s right, at the church. Some were in business, others were students, homemakers, or retired. They listened, asked questions, and commented after the talk that this was truly helpful. My hope is that  they left with some very practical steps to take to reduce their personal risk and exposure online.

The truth is, everyone is interested in security when it’s tied to their personal stuff. No one is interested when it’s about technology, with the possible exception of the IT person trying to enhance their resume.

Are People Calling You to Hear Your Message?

If you’re newsletters, blog posts, and website are littered with technical jargon, chances are no one is responding. But put a business or personal message in front of your prospects and they’ll tune in. Security is magnetic.digital Money Cover

Last week I was in Montana, speaking to small business owners in the small town of Helena. Not only did people come, some drove from the remote parts of Montana to hear this message. And at the end of my session, Information Systems of Montana was kind enough to offer their guests an assessment, just for attending. 90% of them said yes!  For an entire hour they were engaged, not checking email, but taking notes.

This month I’ve been invited to address business owners in New Orleans, deliver a large conference keynote in Miami, and speak to a CPA association in San Antonio. Why? Because people want more – they want to know what’s going on and how it affects them.

What’s Your Message?

It’s time to evaluate your message. Security and customer experience are likely the two most important topics out there when it comes to technology. If you write software, you can help people on the customer side. But if you’re working on managed services and infrastructure, you need security. Not just any security – focus on the trends and how they relate to the people you work with.

Remember, your prospects are building businesses. They’ll be using technology to create efficiencies and value. As they move forward, their security needs will be changing, and they’ll need advice. The person with answers will be in demand.

© 2016, David Stelzl

downgraphIs Managed Services on the Decline?

I’ve Been Predicting This for 2 Years…It’s Here

This week the Wall Street Journal backs up exactly what I’ve been saying. Not that Managed IT, or Managed Services is going away – it’s not.  In fact it will grow. However, it’s the big guys that will profit – Microsoft, Amazon, etc.

Your business might be extremely healthy right now – but health is not always easy to measure. Are you measuring the right things? And if you do have to transition over time, how long will it take?

Big Cloud Providers Are Taking Over

“As more businesses move to the cloud, managed services firms say they’re being forced to change the way they do business”…your competition is “worried about competing [not with you, but]… with Microsoft Corp., Amazon.com Inc. and other big cloud firms,” according to a new report released last week…WSJ

Your clients and prospects, as they get more comfortable with cloud technology, and see larger firms, like Johnson & Johnson, moving their entire operation to the cloud, are starting to go directly to the larger cloud providers – as reported by CompTia this past week.

So while the market is expected to grow about 12.5% annually, you can expect margins to shrink by about 50%!   How healthy will your bottom line be if that happens?

It’s time to start thinking about your value proposition, and the next paradigm shift for resellers…basic IT Managed Services may be coming to an end as your core offering.

© 2016, David Stelzl

 

 

The Cloud is Taking Over

Spending on IT is down – the Cloud is to blame.  You can ignore it, or you can look for the opportunities in it. In every paradigm shift there is an opportunity.

If you sit around hoping it will go away, you may be out of business before long. You can complain about it, but that won’t help. You can push harder to sell more – making it up in volume somehow, but don’t count on that working either.

Gartner is telling us in May 2016, that spending is down 0.5% from this time last year…but we knew that would happen. They’ve been projecting a downturn since mid-last year.

Have you found the new opportunity? There are two things that are selling…

Cloud and Security. These two lead the charts on IT spending.

Big data comes in third. Larger companies have as much as half their computing in the cloud, and it’s growing. 80% of small business, according to Gartner will move some or all of their computing to the cloud.

Microsoft is making a big push – and we’re seeing it happen.  Oracle, Amazon, and others are doing their share as well.

As companies opt for cloud technologies, the need for upfront hardware investments is going down – along with hardware sales from your company. Meanwhile, cloud spending is growing at 22% – that’s big. If you have a cloud to sell – you may be able to capture a substantial amount of annuity business.

If you’re looking at software and license fees – expect flat growth over the coming months and beyond.

Opportunity #2 is Security

The cloud changes everything – are you investing in security services?  If you want to compete, but don’t have a big cloud offering – you can OEM.  The problem is, so can everyone. The cloud is good and bad. Suddenly everyone can offer things without spending the money.

But security is alive and growing – and it requires local expertise. Sure, you can resell a SOC offering – and you should.  But the local presence with top-tier assessments and response capabilities are worth a lot in this market. Add compliance offerings, and ongoing detection/response capabilities, and your company valuation is likely to grow quickly.

If you sell into midsize and small business – try adding 7 by 24 firewall (UTM) monitoring, mobile device security (as opposed to MDM – which is different), and SIEM technology…this gives you just about everything you need on the detection side.

Equip your team, or partner to get real time analysis of events to weed out the false positive stuff, offer routine assessments – delivered in business language and clear recommendations, and be ready to respond to relevant threats such as malware, ransomware, and anything else that might put a company out of business.

© 2016, David Stelzl

 

 

moneyAre You Getting New Customers Every Month?

Not everyone is – especially in the Small Business Market.  

The economy is shaky, and in an election year, many small business owners are waiting to see what’s going to happen.

In the mean time, you could be capitalizing on the security trends.  The news is full of horror stories these days.  But the sale isn’t as easy as it sounds.

Last week I presented a livecast workshop on WebinarJam – I’ve been using a strategy for the past 15 years that does not depend on economics or budgets.  And it’s proven to work over and over, even with people who don’t believe they need more security.

This is so important that I’ve gone out for sponsorship so you don’t have to pay the $500 I normally charge for the workshop.  Check Point and Ingram Micro have agreed to sponsor a second run of this program on April 7th! That’s this week!

Grab your seat here   <<<  CLICK TO GET YOUR SEAT!

Be sure to click the calendar icon when you see the confirmation webpage so it’s on your calendar!

© 2016, David Stelzl