Bridging the Gap: How to Enhance Growth and Profitability for MSPs

Summary

In this episode of Start Grow Manage, co-hosts Jeff Loehr and Joe Rojas are joined by Scott Samborn, an entrepreneur and business leader with a history of managing and growing technology organizations. They discuss best practices to creating a scalable Managed Service Provider (MSP) business.

They also discuss the importance of custom solutions over a “cookie cutter” approach, the significance of maintaining customer relationships, marketing strategies, and the advantages of implementing value-added solutions.

So, if you are interested in starting, growing, and eventually selling an MSP or just want to scale your MSP, tune in and discover the importance of strategic business reviews (SBRs), customer profitability, and the concept of “noise” in customer relationships.

Featuring

Scott Samborn, Senior Technology Advisor of Bridgepointe Technologies [LinkedIn]

Scott is an entrepreneur and business leader with a history of managing and growing technology organizations. He brings over thirty years’ experience in leveraging technology solutions to drive innovation and productivity in clients and environments of all sizes, and he has built and managed teams to provide fanatical customer service and support to business clients.

As a former MSP owner and experienced as an Enterprise IT consultant, Scott currently, provides technology advice and guidance to business executives, IT department stakeholders and MSP’s to maximize their investments in new technology initiatives.

When not working, Scott can be found enjoying time with his family, riding his bike that goes nowhere, hiking, skiing, and “occasionally” enjoying a craft beer.

Scott is currently on the Board of Directors of Hope Connections for Cancer Support in North Bethesda, MD.

What is the problem you solve, and for whom?

We solve the problem of time and money. MSP’s don’t have enough time and wants to make more money.

We save their tech team time on researching new product/service options that their clients need and we add recurring revenue to the bottom line by sharing the commission on these products/services.

How do you help MSPs

We help MSPs in 3 ways – Plus 2 bonuses

  1. Increase recurring revenue by providing super easy access to products and services that they don’t otherwise sell to their clients
  2. We save MSP’s time by using our extensive portfolio of vendors, so that they don’t have to spend valuable time researching services their clients need. And they don’t need to do anything; once we are introduced to the client, we do all the work, from discovery to demos to price negotiations to deal closing.
  3. We make clients stickier because MSPs are now able to provide more critical services that they would have gotten somewhere else.
  • Bonus benefit 1 – sometimes we are able to help an MSP save a client relationship because we often hear things that the MSP won’t, and we can alert the MSP to potential problems
  • Bonus benefit 2 – we do sometimes encounter companies looking for MSP’s and we only pass these opportunities along to our partners.

Your Company Website/URL

What you are promoting:


​Transcript

Introduction

Jeff: All right, how’s it going, Joe?

Joe: It’s going good, man.

Jeff: Do you remember the movie, it’s got Danny DeNiro in it, I think he’s like the CIA

Joe: Yeah, meet the parents.

Jeff: There’s somebody else who’s the soon-to-be son-in-law. who is the opposite of Robert De Niro and, talking about like this circle of trust, you know, and bringing him into the circle of trust, which, you know, I thought was particularly relevant for, for today’s conversation.

We want to bring people into the circle of trust without torturing them.

Joe: So we’ve been talking a lot about, upselling.

Jeff: Well, what we’re coming up against is that people are concerned about client acquisition, and I think we’ve talked a lot about how to grow your revenue and grow your business. And you and I have been really focused on how to create that marketing strategy that brings customers into your world.

And the fact that I think MSPs really should not be marketing.

So if you’re under 2 million dollars, I don’t think you should be spending any money on ads, any money on automated funnels. Just don’t do it.

But, I think what’s particularly interesting about upselling, is, is that we tend to ignore it, right? We tend to say, yeah, and that’s not doing right.

Joe: I see that all the time. Like when we start with somebody new, they’re in such a thirst for getting new clients. You were like, well, how about, how about the people you already have?

They’re like, what about them?

Jeff: Yeah. And it’s one of the tricks of the trade, right? Make sure that the people that we start working with actually go out and start doing what we call strategic business reviews, what others call quarterly business reviews, and drum up some business because that easiest sale is actually the second sale.

You put all that money upfront into bringing a customer into your world. But once they’re in your world, you’re delivering to them. You’re proving to them every day how great you are.

So, when there’s an opportunity to add some extra cyber security or update something or add a new service, they’re going to trust you with that and it’s a lot cheaper that second sale than the first sale.

Joe: Yeah. Yeah. you’re already in the circle.

Jeff: You’re already in the circle of trust at the end. So, you’ve got that cycle, that virtuous cycle. And the thing is that all of your competitors are outside the circle.

And I think as well, people just dramatically underestimate the cost of acquiring a customer. We tend to think I’m going to spend a couple of hundred dollars in ads, but we were just talking before this about how a couple of hundred dollars in ads can lead to a hundred thousand dollars in the cost of acquisition if you’re doing it the wrong way, right?

Joe: And you end up chasing your tail most of the time and not getting the qualified leads, not getting all this stuff. Don’t spend any money on marketing at all unless you’re over 2.2 million. Especially if you don’t understand your cost of client acquisition, and what it’s going to take to do that. Why would you throw that money out? Why not spend that money wisely in ways that really does get you clients?

What does SGM mean by spending money on marketing

Jeff: I think it’s important for us to define what we mean by spending money on marketing because I actually think you do need to spend money to acquire customers.

There’s no doubt about that. But the marketing piece tends to come back to, I’m going to spend money on ads. I’m going to spend money on social. I’m going to spend money on all of these awareness activities, which are extremely expensive.

Joe: Yeah, and in one of the most competitive markets in the U.S.

Jeff: And if you’re not clear on why you or what’s different, then that money is going to be wasted. If, on the other hand, you can go to somebody and be specific about what you do and drill down into their specific problems. Well, you’re going to spend money on that, but it’s not necessarily advertising money.

It’s more money to get to know your customer and develop the story for that client, so that’s what we meant when we said don’t spend money on marketing.

Like, if you’re spending money on ads, you shouldn’t be hoping anymore. You should know that it brings in the clients.

Joe: You should know that every time I say, okay, I want to get five more clients, I’m going to increase my ad spend by 600 or X, whatever X is, and that’s going to get me this many more clients.

That’s how dialed in it has to be.

Jeff: And that’s impossible to do if you haven’t fully defined your sales process.

So, which brings us back to, I think everybody has to fully define their sales process and then you can define your marketing. But in the interim, if you have customers and you’re looking at, well, how do I expand my revenue?

The way to expand your revenue is to go solve problems for the customers that you currently have.

Make sure that you are conducting those strategic business reviews in a way that supports them and their needs and their business that’s in line with how you solve the problem you solve, rather than it being this massive technical 400-page statistics, of how great you are from a technical perspective.

MSP Tip: Your client doesn’t care about your fancy reports

Joe: Your MSP brain wants to give them all these reports and wants to tell them which machines are aging out and wants to tell them all the great cyber security things that you stopped this month. Your clients don’t care; they want to know how you make their business better.

How do you help them serve their clients better? Which means you must understand what they’re doing. So, when you’re doing your strategic business reviews, do your homework, understand their business, understand where they’re hurting, understand where their industry is hurting, and look at what you can do to make them better.

Jeff: Some of these things do matter. If the hardware is aging out, it does matter. But what you have to do is present it in the context of their business. I don’t care that my hardware is aging unless it means that my people can’t work. So, the thing that matters is here’s the downtime that comes.

For example: Hey, we stopped a hundred threats last month. That probably means we need to step up our cyber security. And you have to make these kinds of recommendations. All of those numbers and statistics and things that you have are really there to support you in making those arguments.

Joe: It’s about the business case, not the technology. You care about the technology, and that’s why they pay you all that money. They care about their business.

Jeff: Another subject that’s come up is this idea of customer profitability. And We talked about that a lot in our last summit. One of the concerns is, how do I know the profitability of each customer? And it is difficult. That it’s probably impossible.

Attributing real actual costs in your bookkeeping software to customers is a level of complexity that the vast majority of MSPs don’t need. First it’s all the software and tools you need to deliver the service and then there’s the question of how much labor you’re putting into each customer, and that tends to be the differentiating factor. How much labor is each customer costing you. So you can really just look at the hours spent per customer, and that’s going to give you a pretty good idea of your customer profitability at the end of the day.

You should be delivering a pretty standard set of tools. You should have a pretty standard, pricing structure. So, understanding the real cost, the real time, that real variable cost, that’s the point where, where you can look at profitability. And one of the other things we talked about was the pain in the ass clients. I think one of the reasons that people want to know their profitability is they want a justification for getting rid of their pain-in-the-ass clients.

Joe: Yeah. And one of the ways that we say you do that is to increase your price. You increase your price, and what happens is, those clients leave right away.

And you get 40% of your time back, and you’re like, why didn’t I do this before? So, you increase the price, two or three clients leave, everybody else stays because they love you because you’re doing a great job, and then those people that were a pain in the ass, that were sucking up 40 percent of your help this time, they’re gone.

And you’re still making more money. And they’re gone because you got all your utilization back.

Jeff: You get time back that you can use for other things. So, one of the things that I like to remind people of, and I’ll do it right here, is, you have permission to get rid of your pain in the ass clients.

You can get rid of them. You don’t need QuickBooks to say that you must because it’s the biggest cost. It’s in your opportunity costs anyway. It’s not in the cash that you’re spending on them. So, just get rid of the clients that are driving you nuts and focus on getting more of the clients that, that are really helping you, add your to your bottom line.

So, we actually had a great conversation with Scott Sanborn and he’s the Senior Technology Advisor at Bridgepointe, which funnily enough was a company he initially hired when he was an MSP. And then he joined them once he sold his MSP. So now he takes that experience to his work at Bridgepointe .

Bridgepointe has sort of an interesting business model. And, you know, this is where it comes back to that, that customer profitability. Because what they do is: Help you identify products and help you identify services that you can build into your solutions that you can sell on to your customers.

These are things that you can bring into that SBR for that additional sale, right? These are things that you can add into your sales, like products that you’re selling, without it costing you a lot of money.

And then all you do is take that commission. So, this is something that you can pass on. You get the recurring revenue from this product that gets sold to your customers. And you don’t even have to do the work. So, you don’t increase your costs at all.

Joe: Yeah, in some of the cases, they even do some of the sales engineering with you, and typically there’s a lot of costs in sales engineering. And if they help mitigate that cost, you start adding MRR that you’re not doing work for. Life is good.

Jeff: You’re still getting checks from back when you were an MSP, right?

Joe: Yeah, I still get checks. Just from stuff that I sold 10-15 years ago. And I do absolutely nothing for them,

Jeff: I think the conversation with Scott is really an interesting one. I think that understanding how that business works, he’s got some great stories around MSPs, MSP profitability, and how to grow an MSP.

Introduction to Scott Samborn

Scott: Good morning, gentlemen.

Joe: Hey, good to see you.

Scott: Joe, the podcast you posted really resonated with me.

Joe: Oh, tell me about that.

Scott: I’m going to pull it up again just to refresh my memory because I’ve been going 90 miles an hour this morning. It was the 35K client acquisition. Very interesting. When I owned my MSP, we did not spend enough on marketing. I don’t think $35,000 is the right number, but, you spend so much money on other things, but you never spend enough money on farming your existing client base to see who they’re going to bring to you.

MSPs spend a lot of money on a lot of things and sometimes, what I’ve learned in the last year is they’re not spending the right money on the right things.

Joe: That’s the key right there, my friend.  

Jeff: Your experience in the MSP world is pretty impressive, but the thing that really allows me to trust you is really the fact that you like to ski because that clearly puts you a cut above most of the population.

Those of us who were on the mountain, you know, we have a certain understanding.

Scott: Yeah, unfortunately last year I didn’t get to ski at all, so I’m so excited to get back to skiing this year.

Jeff: Yeah, last year out west was just phenomenal. And, you’re in Maine, right?

Scott: The D. C. area.

Jeff: I like to ski in the west. So we went to Tahoe, and we had something like 600 and some odd inches of snow. It didn’t even all melt in the summer. It was phenomenal.

Scott: So I’m usually a Colorado, Utah guy.

Jeff: Yeah, there you go. They got dumped on last year, too. It was brilliant. So hopefully, this year, Scott, for both our sakes, we will continue to have lots of snow in those mountains out west. All right. Was there something else we wanted to talk about?

Oh, MSP stuff!

Joe: I was about to say, hey, look, I want to go camping while you guys ski.

The role of Bridgepointe in assisting MSPs

Jeff: So, so you are an advisor at Bridgepointe. And if I understand correctly, you guys help MSPs design solutions for their clients, right?

Scott: That’s a good way of saying it. I like to say we help companies buy technology better, stronger, and faster. Cause I’m that old, and I remember the 6 million man.

Jeff: The service that you’re doing for MSPs, I think, is about helping them understand who those value-added products or how they could become value-added resellers or incorporate things into their technology stack.

Scott: Right. So, you can think of us as your Chief Technology Procurement Officer. What we do is we work with the MSPs to help them provide solutions to their clients that they either don’t provide or don’t want to provide.

For instance, in my MSP, we didn’t want to deal with telecom. We didn’t have expertise in it; calling the phone company was a pain in the butt, and it just led to frustration.

So, when I met the guys on my team now, back in 2012, and they said, no worries, we take care of all that. That was like a marriage made in heaven for us. I don’t have to deal with VoIP. I don’t have to deal with calling my local cable company and I get paid for it.

Well the nice thing is, is Bridgepointe doesn’t charge anything.

There’s no cost to working with Bridgepointe because we get paid by the supplier.

Jeff: Oh, that’s interesting.

Scott: When, when your client is moving And you need to get a new circuit in their new office. All you do is you call us up, you tell us, some basic information about what the client needs.

We’ll come back with all the vendors that are able to supply that service to that client at that location. You help the client decide which one they want. We can negotiate on price for it on the client’s behalf. And then the client signs a deal directly with the supplier. So, we’re not white labeling it.

We’re not getting in the way. All we’re doing is facilitating a better way to buy.

Jeff: I think that’s great.

One of the things that we’ve talked a lot about is having strategic business reviews where you identify some of those issues and problems that clients have. And so, being able to come to that table with some new stuff, with some solutions that the relationship that the MSP has with their client, but it also brings them more money, right?

Scott: It also blocks competition, because let’s say they’re buying a new phone system. So instead of having to go outside and call their local phone guy, who you know is going to come in and say, Oh, it doesn’t work because it’s the network’s fault.

Instead, you’re bringing that technology to the table. You’re blocking the competition from getting any foot in the door there. So, it serves a whole bunch of purposes. Plus, a lot of MSPs, especially nowadays, talk about how it’s not a cookie-cutter approach. We’re not a cookie cutter company. We’re going to design you a custom solution.

Well, yeah, but then if you try to cram them into the one service that you’re selling because you’re making a good margin on that, then isn’t that cookie-cutter? Whereas if you can come to them and say, okay, we have these 12 providers, and here’s why this one is better for you. And even though this one is in the Gartner Magic Quadrant as being the best solution, it’s not the best for you because of XYZ, so you’re really providing them a custom solution and helping them solve their problem.

What does it take to make a client happy?

Jeff: My next question is, what does it take to make a client happy? I’m going to guess that you’re going to say solving their problems.

Scott: More often than not, I hope it’s solving their problem, because that’s what we try to do. Sometimes it’s buying them a drink too, but you know, we can talk about that in happy hour.

Jeff: That’s a different problem, Scott. It doesn’t mean that it’s solving the problem.

What was Scott’s MSP, and how did he get started with Bridgepointe?

Jeff: You came to Bridgepointe from Vantage Point Solutions, right? So that was your MSP, and you hired Bridgepointe, and then you ended up joining them?

Scott: Well, so the relationship is not really a hiring relationship. It’s more of a partner relationship. So, what happens is, when the customer has a need, the MSP uncovers any of the customer says, Hey, I need, I need this solution.

As a partner of ours, they’ll come to us, and we take care of the entire process, the whole procurement process from managing the discovery to researching the vendors, managing if it’s a phone system, and managing all the demos. And, of course, the MSP is welcome to participate in the process the entire time.

And then we take care of the price negotiation and get the client to sign the deal. And then the MSP almost always has a representative on all the implementation calls. We have a project manager who sits on the implementation calls as well to make sure that the vendors are doing what they say they’re going to do.

And then, you know, as time goes on, eventually, the service is up and running. And then we step back. We are there available if something goes wrong with that service, because our volume is so tremendous, you know, we’re doing seven figures a month of billing for a lot of the services that we work with.

So, it’s a lot easier for us to pick up the phone and get a senior engineer to respond to a problem than it is for the little fish in the big sea to call up and say, hey, my internet’s down. So, we carry a lot more leverage in that way, too.

Jeff: Yeah, sure. but I was wondering from the Vantage Point perspective because I’m interested in the MSP perspective because you started the relationship as an MSP, right?

Importance of recurring revenue and partner relationships

Scott: So another problem that they were able to solve for us is, you know, as MSPs, we know that our holy grail is recurring revenue.

That’s, that’s the be-all and end-all of MSP. And when we work with a partner, when they bring us into an opportunity, we get paid by the supplier. As I said before, we split that commission with the MSP. So not only are we helping with client satisfaction but keeping away competition. We’re also driving revenue straight to their bottom line because the truth is, they don’t have to do much.

We take care of that entire process, and then they sit back, and they’ll get a check from us every month for the life of the customer.

Jeff: That’s brilliant, right? I mean, Joe, you are still getting checks from your MSP days, right?

Joe: I still get checks from the back in the MSP days. I haven’t been an MSP in 5-6 years.

Scott: The company that bought my MSP, they’re still getting checks from clients that we hadn’t dealt with in five years because the folks at Bridgepointe are now still working with them. Although their circuits come up for renewal, you know, there’s still commissionable activity on that account.

So, they’re still getting a check every month, even though we haven’t talked to the customer and we’re no longer Vantage Point. The company that bought us is now getting the check.

Discussion on selling an MSP

Jeff: So I’d like to ask you a little bit about Vantage Point because you’ve had a full life cycle experience at Vantage Point, right?

Scott: It depends on what you mean by that.

Jeff: So, what I was thinking is sort of like you started it, and then Joe just said you had some partner issues, and then you eventually sold it, and it’s sort of interesting that whole process, it’s like something that we all face in every single one of these businesses, right?

Scott: I don’t know if I would call it partner issues. I mean, I had two partners, and we were entertaining the idea of selling, and then we saw that the numbers in the industry were really, really good.

We were all at separate points in our lives; you know, we were all different ages. And a company approached us and offered us the number that we were looking for. And it made it worth our while.

It wasn’t a difficult transaction, but it was a long transaction because they bought two other companies at the same time. So, it took a little while, but then we closed, and it’s been great. And I still have a relationship with the company that acquired us. It’s a great bunch of guys. I think all our employees are still there. And they now have 7 or 8 offices around the country that they can interface with. So, they’re growing. I’m growing in my new position, and I’m able to help MSPs in ways that I would never have imagined before. I look at it as a win-win.

Did you structure Vantage Point as a saleable business?

Jeff: So, did you imagine selling this from the beginning? Did you structure Vantage Point from the beginning as a saleable business?

Scott: Yes, because my kids have no interest in going into the business. My one partner, who also had kids, also knew their kids were not interested in going into the business. So, we knew that the time was going to come when we were going to sell. It was just a matter of getting the right deal. We had looked at it a couple of times. We had gotten offers in the past that, didn’t work out for whatever reason. And this one was the right money at the right time and it worked out really well.

Jeff: We get a lot of questions about how to create a saleable business. How do you structure to sell?

Joe: We have that question come in through at least once a month in some way, shape, or form.

Jeff: And generally that question comes from somebody who looks very tired.

Scott: You know, I think the first thing is making sure your books are in order. We were a member of a peer group for a bunch of years, and I think that helped us sort of structure our books with an eye towards eventual sale.

Plus, make sure that your EBITDA and your recurring revenue are strong as well. If you’re not making a margin on something, then why are you selling it? And that’s something that I’ve seen a lot in the last year, having come over to Bridgepointe, is that a number of MSPs have these tools in their tech stack, but they’re not making any money on them.

So why not outsource that? You tell your customers to outsource their IT to you. Why not outsource that service that you may not be making enough margin on? If you come and get it through Bridgepointe, then hopefully, we’ll get you a better price annually, making a commission on it. So right away, your margin is going to get better.

Like I said before, everything in our business is based on recurring revenue.

What does it mean to structure the books as a MSP to sell your business?

Joe: I’m going to bring you back, right? When you say structure the books, like, what does that mean? Like, structure the books to sell? What does that mean? Like, what should they be thinking about? What should they be looking at?

Scott: First of all, make sure that your contracts with your clients are in order and you’re protected. Making sure that you have contracts.

Jeff: Master sell agreements too.

Joe: You gotta remember where we are, man.

Jeff: So what you’re saying is that I can’t just have a handshake deal over coffee and hope for the best?

Scott: Well, when we started our companies, we were all kind of in that boat. But, you know, as you grow and mature and you’re actually looking at selling or positioning yourself to sell, You want to make sure you have agreements, because the money that you’re going to be offered, is going to be based on what the buyer is going to get.

And if you have a handshake agreement, it doesn’t matter how good of a friend you are with the client, they may not like the new owner, and if you don’t have an agreement with them, then you’re out of luck. That doesn’t count.

Jeff: There’s also no way for the buyer to then calculate the benefit to them.

Because if there is no contract, if there is nothing that says, okay, this person is going to be with us for two years. They’ve been with us for five years. They’re in a contract for this length of time. And this is the expectation that we have that they will continue. And that is based on the churn as we’ve calculated it over the last five years.

That’s a story you can tell. If you go around and say, Hey, we’ve got a bunch of customers, and they make money, and to your point, half the time, you don’t even make any money off of them because you’re not charging enough money or you haven’t optimized the products that you’re selling, that makes it really hard to sell, right?

Scott: On a quarterly basis, we look at how profitable each customer was. And if a customer wasn’t profitable enough, we would have to meet internally and discuss, you know, what do we do? Is it not the right customer for us? Are there things that we’re not doing correctly? Are they just generating too much noise?

And if they’re generating too much noise, meaning too many tickets, we’re spending too much time on them, then how do we fix that? So, and then when we actually got very close to closing, we had to look at all of our contracts and say, okay, this contract is, it’s a three-year contract. It’s coming due in a year. Can we extend it?

We also created a letter to what I think was our top 20 clients. It said, Hey, this is what’s happening, are you going to stay with us? And all 20 signed. We were very fortunate in that we had a great relationship with all of our clients, so we didn’t lose any clients as part of the, as part of the transition. We know of companies that left their MSP when they sold because we picked up over the years customers like that. Yeah.

What does it mean to have a delivery mechanism in a MSP?

Joe: Yeah. And part of what you’re saying is, not only is having your contracts in order crucial, but having your delivery mechanism, how you deliver the services to the client so that there isn’t all that noise, that that is also a critical piece to have in place.

If you’re going to sell, like, as you’re getting prepared to sell, you want to make sure that the delivery model is so freaking, in Jeff’s famous words, tickety boo.

Jeff: You gotta have tickety boo processes, because if you don’t, you do not know your customers.

Scott: Well, that’s true. And you know, we’ve all been talking for years about KPIs and dashboards. So implement it. Take the time to understand what is your revenue comprised of?

What are your technicians spending their time on? There’s a lot of information in your PSA. Use the tools to understand what you have.

Jeff: We just find so often people don’t understand the revenue side.

They don’t understand how the revenue, like you say, is built up. They’re not sure what their costs are. And you know, whether you want to sell the business or not, it’s very difficult to manage it and make sure that you’re making money, if that’s the case, right? Because you just don’t know. So many people just don’t pay themselves because they’re not making any money because they’re not sure how to make money.

Their prices are too low. They don’t have the right products, but they haven’t gone through the analysis to really understand that. And that’s what I think when we talk about getting your books in order, I think part of getting your books in order is just having some of that clarity that you know where the money’s coming from, where it’s going, and what some of your options are.

Discussion on ideal clients and noise in client management

Scott: I think that when you do that, you’re going to realize if your books are a mess now, you’re going to realize that your clients are not probably your ideal clients, because you’re so busy, doing everything for them that you’re going to realize that, I need to get some clients that are, that are less noisy.

Jeff: Yeah, I love that. Actually, I’m going to borrow that less noisy client, but we have an idea as to what that means. What would you say? What makes an ideal client for you?

What makes an ideal client?

Jeff: How does somebody become an ideal client?

Scott: You know, the best client is the client that does everything you tell them to do, right? if you say, hey, you need this, they’re like, okay, I understand why I need that, and let’s go.

What I found is that, unfortunately, a lot of the smaller clients are just as needy as a larger client. So, you know, a 10-person firm generates as much in terms of the tickets as a 50-person firm. So, obviously, the 50-person firm is much more profitable. You know, there comes a time, and we went through this as well, where we were not looking for the smaller clients.

We said, okay, our minimum monthly cost is this. If you’re willing to pay it, great. If you’re a five-person company and you’re willing to pay that, fantastic. Otherwise, you know what? We’re not the right company for you. As you grow and mature, you’re, you’re going after a different market.

Did you define a niche for your MSP?

Jeff: Did you guys define a niche at all? Did you get specific about whom you were selling to?

Scott: at some point, we had a number of customers in the property management space here in the DC area. There are a lot of buildings and and it was a huge market. So, we weren’t really focused on it, but we ended up with a lot of clients in that space, but we know we were more generalists.

In hindsight, there’s riches in niches. So I’m thinking maybe, maybe we should have focused on an area.

Importance of defining a niche in marketing

Jeff: Well, so that’s, that’s what we find, right? And the fact that MSPs don’t, don’t market enough. But one of the things that we’ve discovered is, if you’re marketing without defining a niche, if you don’t know exactly whom you’re selling to and have an exact sort of process defined, then marketing is really hard because otherwise you’re just marketing to everybody.

Imagine you’ve got 30 million companies out there. Everybody’s shouting at the same time. It’s really hard

Scott: Absolutely. I mean, you can throw all the spaghetti in the pot up against the wall and some of it’s going to stick, but is it the spaghetti you want?

Jeff: Is it a company you want and can you plan it, right? If you want to sell a business, you need to say, this is where we’re getting clients. This is where the next 10 clients are coming from. Here’s the pipeline.

The importance of defining processes

Scott: That’s part of defining what your processes are. You must have a sales process, you have to have a marketing process, you have to have a ticket process, you have to have a resolution process.

Joe: and back to what Jeff was pointing to that, that noise comes from having all these disparate types of clients, that you could deliver a better service to the smaller company that creates less noise if you’re a specialist.

Because you know what their problems are in advance, and you can fix those problems. The problem is that when you onboard 10 different 10-user companies, you’re in deep doo-doo. Because they all have their needy, needy, needy, needy. But if they all have the same problem, you fix it once, then you just replicate it.

The challenge of mastering multiple applications

Scott: And they all have different applications too. So how many applications can you learn? You can have your accountant firm applications, your legal firm applications, and your trash hauling applications. How many applications are you going to master? You can’t.

Joe: You can’t, and that’s the whole key. That’s really where you start to see, oh, yeah, the riches really are here.

The advantage of anticipating client problems

Joe: And I love what you said about how you can anticipate their problems. if your niche is legal, then you know that a 20-person law firm or a 30-person law firm typically encounters these kinds of problems.

So you’re going to come in there, and you’re going to be at an advantage over the guy who does just anything in the world. It’s like, oh yeah, well, we worked with that program before, but I’m not an expert in it.

Jeff: Going into somebody and saying, uh, yeah, I’ve, I’ve heard of that, but I don’t really know how to support it. And, uh, I’m not so sure. Uh, but I can make sure your email works is not a compelling sales proposition.

The daunting task of identifying a niche and process

Jeff: You brought up a point that it seems daunting to identify these things. I think it seems daunting to identify a niche. I think it seems daunting to identify a process. And I think that’s because we’re used to taking action, to being in action, to doing things now.

And this requires some of that mental processing that comes beforehand. But the result is it is so much easier to sell and deliver, and things work better. So it feels daunting upfront, but then you find out it’s actually not that hard. And when you do it, the advantages are just a millionfold.

Jeff: And a lot of times you’re selling it to your clients as a service anyway, whether it’s HIPAA compliance or some other compliance, that’s all documented processes, right? I mean, that’s what that compliance is. So if you’re selling it to your clients, take the time and do it for yourself.

Adding value to your services with extra products.

Jeff: And then I love the idea of you need some extra products. You need to add something to your, to your list. You need something to, to solve more problems for your client. Well, you, you go to Bridgepointe and find some of those solutions that you can bring in. Have a strategic business review and talk to them about how you can solve that voice problem, with this great solution and, and, create some recurring revenue that way.

What advice do you have for MSPs

Jeff: Scott, hey, thank you so much for spending your time with us. Any parting thoughts for MSPs on how they should think about growing their business on what they should be doing in order to get to that next level of growth?

Scott: Take a look at what you have now, where you are now, and, you know, have an idea of where you want to be and then document, document, document.

Jeff: Yeah, well, you’re preaching to the choir over here, and we’re certainly big on the documenting.

How to work with Scott

Jeff: If someone wants to work with you, where do they go, Scott?

Scott: They can reach out to me at ssamborn@bpt3.net. Thanks, Jeff. Thanks, Joe.

Joe: Thanks, Scott. And remember, all of you out there, and you, Scott, and even you, Jeff, that You Are Loved. Bye, y’all.

Similar Posts