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Voiceover:
Made in the UK, the MSPs around the world. This is Paul Green’s MSP Marketing podcast.
Paul Green:
Do you know this podcast has gone so quickly? We’ve made it through to episode 21 and this is what’s coming up in today’s show.
Richard Tubb:
How can they look at extracting themselves from the business so that business is actually worth more without them?
Paul Green:
We’re also going to be looking at how to overcome objections at sales meetings and answering a question for an MSP. Should you or should you not be doing Google adverts?
Voiceover:
Paul Green’s MSP Marketing podcast.
Paul Green:
One of the downsides of running your own business is that it’s very easy to lose the bigger picture. You can have really, really busy days and weeks, but you can get to the end of them and sort of ask yourself, have we made any money this week? Are the clients happy this week? Are the staff happy this week? Are we doing better this week as a business than we were last week? And there comes a point in everyone’s business ownership career where they look to put in place KPIs. They’re a bit jargony KPIs but they stand for Key Performance Indicators, and you might choose to put them together in a dashboard or just in spreadsheet, or even just on a scrap of paper on your desk. You remember paper, don’t you? So 2004 it really is, but the points of KPIs is that they give you a visual indicator of what’s happening within the business, and therefore what the trends are in the business.
Paul Green:
Cause you see KPIs aren’t just about the snapshot of what’s happening now. It’s what’s happening over a period of time. What’s going up? What’s improving? What’s getting worse? What’s going down? Which are the areas that you need to focus your valuable management attention on because you can’t be on top of everything all of the time. So the KPIs, particularly when married up to a really visually easy to read dashboard, make it easy for you to know where you should be spending time, what’s broken, what’s soon going to be broken or what’s just generally a bit lackluster right now.
Paul Green:
Now I have had many conversations with my MSP master minders in the UK over a period of time about which KPIs that they should be tracking, and I’ve got a list here, two lists for you really. One of them is a list of tech KPIs and then the second one is a list of management KPIs.
Paul Green:
Now, caveat to this, as I’ve said many times on this podcast, I’m not a technician, I love technology, but I’m not a technician so this tech one is not going to be a particularly exhaustive list, but it’s certainly got things such as billable hours. How many hours are you billing out right now? SLAs? How close have you come to breaching SLAs? If you’ve got Service Level Agreements, you should certainly be tracking the number of tickets opened and the number of tickets closed, and also the average ticket length because the average ticket length is an indicator of quality, and also probably customer satisfaction, which is also one of the technology KPIs that you should be tracking. Now, there are lots of different ways to do these. If you’ve got a good PSA, then you should be able to extract this data out of them easily. A couple of weeks ago on the podcast I had on Joe Pannone from CW Dash, which is a free dashboard which links into ConnectWise and does exactly this.
Paul Green:
It extracts that information out of ConnectWise and shows you a dashboard. You’ve got Bright Gauge, which of course is owned by ConnectWise now and there are various other dashboards that you can find. It’s fairly easy to present the information if you can get the information out. Oh, but you’ve got to make sure the information is good quality as well because there is a phrase isn’t there, which is crap in, crap out. So if you’re going to be tracking things like billable hours, or tickets opened and close, you’ve got to make sure, in fact there’s got to be a culture within the business of your technicians tracking data properly because if they’re not tracking data properly, they’re not billing the hours properly. If they’re not managing the tickets properly, then you’re going to get a skewed picture from your KPIs.
Paul Green:
The customer satisfaction one by the way, there are things like customer thermometer that you can use to just get, if you like a thumbs up or a smiley face from your clients and some of the PSAs have their own versions of that is certainly worth just tracking to see, again, trending over time, how happy or unhappy are your clients, how’s that changing over a period of time?
Paul Green:
Then we get into the sort of the management ones. Now with the management ones, I’d be looking to track the number of new leads, new leads coming into the business. So a lead isn’t necessarily a prospect, a lead like someone joining your email database, or maybe even connecting to you on LinkedIn. So how many leads are you generating and how many prospects are you generating? The prospect is where someone puts their hand up, where a lead puts their hand up and says, “Can we have a conversation please?” And you actually start talking to them about their specific circumstances. That’s the difference between leads and prospects and you need to be tracking both because you might only get one or two new prospects a week, but you potentially could get 20, 30, 40, 50, maybe even 100 new leads a week. Next year should be looking at the number of new sales appointments, and not just the number of sales appointments because someone could have three sales appointments in the same week with the same prospects.
Paul Green:
That doesn’t really count, but what are the number of new ones that we’re starting? What’s our lead, to prospect, to appointment conversion rate? In the business that I sold, it was a marketing business I sold four years ago. We knew exactly what our conversion rate was from the number of new leads joining the database, to the number of sales meetings that we had, to the number of new clients. I can’t remember what those are off the top of my head, but we worked that out over a number of years and they were fairly consistent figures. By tracking those figures every single week, we were able to see A, if the system was broken in some way because typically when the figures changed quite dramatically and quite suddenly it meant that someone somewhere was not following the system that was laid out, but also allowed us to know with confidence if we spend a thousand pounds on lead generation, we know exactly how much revenue, and therefore gross profit, and potentially net profit that can turn into.
Paul Green:
So that’s definitely something you’d want to track those conversion rates. Then you’ve got your sales conversion rates, which is all part of the same thing. You definitely want to track your monthly recurring revenue because that is the dream goal for every MSP is to grow the monthly recurring revenue. So track it. Let’s see it in your dashboard. What about monthly recurring revenue per user per month? So this actually gives you a quality score across the whole business. If you’re supporting, let’s say a thousand users and you’re generating, I don’t know, 10,000 pounds worth of monthly recurring revenue, then that’s 10 pounds MRR per user per month. And again, over a period of time that could become a KPI that you’re focusing on. How do we grow a MRR, a monthly recurring revenue per user per month? And that’s where you’d use things like the profit matrix to go out and sell more to your existing clients.
Paul Green:
In fact, it will motivate you to do so because you will make more money this way, and you’ll know from the figure that it’s going up. You could measure an upselling rate again for each client, how much are you growing their business every year? Upselling isn’t so much about hardcore selling, it’s about finding opportunities, finding things that your clients might want or need, or that might remove some fear for them, and just putting it in front of them in the right way. Some of them will go on to buy some of those things.
Paul Green:
You should definitely be tracking your net profit percentage. So net profit is the bottom line of the accounts. It’s the money that’s yours, it goes to the owners, you just have to pay the tax on it sure. But one of the main goals of the business is to generate enough net profit to keep your interest over a long period of time. All of us have run businesses that don’t make money and it’s not fun. It’s not fun doing that at all. So you should be absolutely tracking your net profit percentage. The percentage again is a quality score and what’s happening to that month by month, year by year.
Paul Green:
Then the final one, I think you should be tracking is staff satisfaction. Now there are lots of different ways of measuring staff satisfaction. You just have a good Google search to figure that out, but you might get them to put scores together in appraisals, or in reviews, or something like that. The more you can track how satisfied your staff are, the earlier the warning signals will be when things are going wrong because you will have key members of your team that you would be gutted if they left. You maybe have other members of the team you’re not so bothered about, but if you’re tracking whether it’s individual, or whether it’s team, staff satisfaction, it gives you an indicator of, “How am I doing as a boss? How are we doing as a business making this a great place to work?”
Paul Green:
As I said, this is not an exhaustive list, but certainly if I owned an MSP, these are some of the KPIs that I would be tracking.
Voiceover:
Here’s this week’s clever idea.
Paul Green:
We don’t talk a lot about actual sales meetings on this podcast because my experience with most MSPs is that once you’ve got the sales meeting, you go and do your magic. Most MSP owners are pretty good at selling because they talk with passion, and with vigour, and with interest about how technology can solve their potential client’s problems, but it is worth I think just having a look at objections. Objections at sales meetings are, I believe, the prospect telling you they haven’t yet got all of the information that they need to make a decision, be that cognitive information or emotional information.
Paul Green:
Because of course, most of the people that you’re meeting are making the decision emotionally. They’re making the decision with their heart, and then they’re rubber stamping it with their brain. So with objections, I always think there’s a four step process that you can use to overcome objections. The first of them is to listen fully to that objection. You’ve got to ask them, because the temptation is to jump in. Someone says, “Oh, but what about blah, blah, blah, blah, blah,” and the temptation is to jump in and just try and kill it dead and answer it. Actually what I think you should do is you should take time to listen to the objection properly. You should explore the objection. You should ask questions, what, how questions, not why questions, because why questions can come across as defensive, but “What does that look like? How do you think that would affect the business? What is it about that that concerns you?” Those kinds of things.
Paul Green:
You need to make sure that you understand the objection completely, and that’s about exploring it properly with them. It’s about asking them for examples. Most objections come out of previous experiences or lack of experience. So you’ve got to quite understand, “Is this because of something that’s happened to them in the past, or is this because they haven’t got something to compare this against?” And only after you’ve uncovered all of those objections, can you respond properly. Then you have to look at the objections and respond to the biggest things first. Resolving objections and responding properly isn’t about being defensive. It isn’t about just being dismissive. If they’ve got an objection, it’s a real thing to them. To you, it might be nothing because you know it’s not a big deal at all, but to them it’s big and it’s everything.
Paul Green:
So you’ve got to throw out the evidence. You’ve got to give them the emotional evidence that they need, that this is not a problem. You’ve got to back that up with some cognitive evidence. You mustn’t be swayed by the fact you know it’s not a big deal, because if it’s a big deal for them, it could potentially kill your sale. By the way, you’ve got to do all this without talking for 20 minutes because long winded responses just seem really insincere, and then once you’ve done that, I think you’ve got to confirm that you satisfy their objections. So that’s about testing it, it’s about asking them, “What do you believe about that? How do you feel about that? What do you think should happen from there?” Et cetera, et cetera, et cetera.
Paul Green:
Now I have to give a shout out to one of the MSPs that I know Anthony Thackray who came up with an amazing question to pull up all the objections in a meeting. It’s something that you use towards the backend of the sales meeting when you believe that the client is on board, and this is the question, “What’s standing in the way of us being your IT partner?” Let me say that again because it is a great one. “What’s standing in the way of us being your IT partner?” That I believe, is the ultimate objection identifying question, “What’s standing in the way of us being your IT partner?” Because they have to put on the table everything that potentially bothers them about working with you. Why don’t you try it at the next sales meeting you do?
Voiceover:
Paul’s blatant plug.
Paul Green:
Far too many MSPs really struggle with their marketing, which is crazy because there’s so much help out there to help you with your marketing. Now, one of the big challenges is to build a relationship with prospects before the point that they are ready to have a serious conversation with you about switching from their incumbent to you.
Paul Green:
This is where my service, the MSP Marketing Edge comes in, because what we do is we’d give you a whole bunch of stuff, marketing content that you can use on all of your marketing channels. So basically you don’t have to write it, you don’t have to think of it, you don’t have to create it and you can use it. Now, only one MSP per area can use this. So as you can see, there’s no clash. It’s not that two or three MSPs will use it, no one in competition with you, will use it as long as they’re in your area. So we’re talking every single month you get a brand new guide, you get a video, you get some social media content, you get promotional emails, you get press release, you get a sales letter. There’s a whole bunch of premium stuff in there as well. There’s a “Have I been poned,” plugin you can put on your website, there’s a book that you can brand up as your own. We’re adding a whole series of other things as we come into the spring and the summer to make that even more valuable, but we’re not putting the price up.
Paul Green:
So it’s called the MSP Marketing Edge, and the very first thing to do is to go onto the website and check to see if your area is still available. So if you go into MSPmarketingedge.com and there’s a UK site, and a US site, so you pick the site. Now in the UK, you then go in and put in your postcode and it’ll tell you whether or not your area is available. In the States, same thing it’s just it’s your zip code, and it’ll tell you if your area is available, and then we offer a trial from there.
Paul Green:
So your first month in the UK costs you one pound plus VAT. In the States, it costs you absolutely nothing. Of course, you have to lodge your payment details, and if after the month you haven’t cancelled, of course it will turn into a paid subscription, but it’s not a huge amount of money. In the UK, it’s 99 pounds plus VAT per month. And in the States it’s just $129 per month. So we’ve deliberately made this very low cost, very easy, and it’s all about you being able to do something and get your marketing done every month without a great deal of hustle. So go and have a look. MSPmarketingedge.com.
Voiceover:
The big interview.
Richard Tubb:
Hi, my name’s Richard Tubb and I help the owners of IT businesses to free up their time, concentrate on what’s important and essentially to make more money.
Paul Green:
Who doesn’t want a piece of that, that’s for sure.
Paul Green:
So a few weeks ago we had on the podcast a guy called Jonathan Jay, who’s a good friend of mine, and he talked about growing your business through acquisition, and how you can grow so much faster just by buying someone else’s business than trying to organically grow your own. And it’s led on to a number of questions, Richard, which I can’t answer, and I think you’re the man that can answer those. Essentially, how do you value an MSP business? So is it done through multiples of EBITDAR? And if you could explain what EBITDAR is, that would be great. Or is it done through something to do with recurring revenue?
Richard Tubb:
Sure, okay. So when it comes to valuing a MSP business in the UK, as it stands today, I’m afraid I’m not going to make myself very popular here Paul. But the reality is that you are typically looking around one times recurring revenue as the valuation. So to give an example, if you’ve got an MSP business and you are doing 500K a year, and the majority of that is recurring revenue, your business is roughly going to be valued at 500K there and thereabouts. Now before, I can almost hear your listeners jumping out of their seats and ready to throttle me around the throat and saying, “Well I’ve spoken to my accountant and my accountant says I can get between three and a half, and five times revenue,” or any other fancy calculation. If you can get that valuation for your business, good luck to you I say.
Richard Tubb:
I’m not dismissing the fact that some people might be able to get out there in exceptional circumstances, but every single one of the merger acquisitions that I’ve been a part of over the past few years in the UK, it is all boiled down to the buyer will be prepared to pay around one times the recurring revenue over an annual basis.
Richard Tubb:
So that is, we can talk about EBITDAR and all of those things Paul, but when it comes down to it, real world valuation one times recurring revenue annually.
Paul Green:
So that’s really interesting to hear, because I’ve sold a business and I got three times EBITDAR. I know you sold an MSP business, so it’s obviously, which is a different thing, and you mentioned about the accountant and what’s the first thing we do, isn’t it? When we’re going to sell our business, we ring up our accountant, and we say, “Hey, what’s my business worth?” And we always think the accountants are experts at this, but sometimes the accountants are making it up to a certain extent. When I say making it up, I mean they’re just falling back on standard valuation. So it’s really interesting to hear from you that one times recurring revenue is considered the fee.
Richard Tubb:
Yeah, and I would say in, in the accountants defence, and you’ve already sort of spelled out a little bit there, they go with what they know and the vast, vast majority of accountants are not used to valuing IT businesses. Or indeed I should say service businesses, they tend to value retail businesses, and other things like that. So I’m not saying that what they’re telling you is wrong, but for the IT industry, what I see out there in the real world is that buyers are only prepared to pay one times recurring revenue. But again, going back to what I said earlier, if you can find a buyer who is, if you’ve got a unique business and the buyer is prepared to pay more, more power to you, go for it.
Richard Tubb:
But the reason I say I suspect many of your listeners will jump out the chair, or would be ready to throttle me is that it’s a bit heartbreaking, isn’t it, Paul? When you’ve built up the business, and then the reality is it isn’t going to be worth millions and it isn’t going to be your meal ticket out of there. That’s the reality of the situation that we live in unfortunately. I’m happy to get feedback from your listeners, see if anybody absolutely disagrees with me, but that’s the deals that I’m seeing out there in the UK.
Paul Green:
Well as you and I have said before, when we’ve met up or when we’ve chatted because I don’t think we’ve actually physically met.
Richard Tubb:
I don’t think we have Paul.
Paul Green:
I don’t think we have.
Richard Tubb:
You’re a mate and we talk about Doctor Who all the time, we’ve never met.
Paul Green:
As we’ve we’ve said before on calls and stuff. The business is, you can say it’s worth one times recurring revenue, but as you’ve just alluded to there it’s worth what the buyer will spend on it. When I sold my marketing business back in 2016, that was one of the first things that my broker said to me, which is, “Well look, this is what we think it’s worth. This is the range we think we can get for it, but ultimately if the only person that offers you money, will pay half that, that’s what the business is worth. That’s what the market has decided the business is worth.” You must know quite a few people who’ve either bought businesses or sold businesses, and do you find that quite often it is a surprising figure that they either receive or that they end up paying for that business?
Richard Tubb:
It is, and it can be, not to be negative about this Paul, because I’ve known lots of small MSPs that have sold their business and been very happy with what they’ve got. It can be life changing, some money for them, but it’s always the case that it’s never a ridiculous sum of money. And we’re not talking Google, we’re not talking Facebook here with absolutely billions and multiple times revenue and things like that. It just doesn’t seem to work that way. The business is worth what somebody in the market will pay for it, what a buyer will pay for it.
Richard Tubb:
I should actually go on and say that I’ve seen lots of deals done at the small end of the market, and when I talk about the small ends of the market, I’m talking about sort of a below 5 million turnover where the business owner is inextricably linked with the business, which is a challenge. So if the business can’t run without the business owner, if the business owner is either a single point of failure within that business, or is linked to some processes or the relationships linked to the business owner, that becomes a challenge in itself because essentially buyers want to buy your client book, your intellectual property, and they’re not really looking to bring on the existing business owner within the business.
Richard Tubb:
So that might be another challenge for listeners of your podcast, how can they look at extracting themselves from the business so the business is actually worth more without them?
Paul Green:
That’s a really interesting point. Before I ask my final question, Richard, I did promise at the beginning of the interview would explain what EBITDAR was. Can you hear the thuds of people’s bodies falling to the ground as we do in accounting terms?
Paul Green:
So EBITDAR stands for earnings before interest tax depreciation and amortisation and put it into the way determined accountants used for normalised net profit. So you take whatever net profit you’ve got now and you bought a television last year which accidentally ended up in your house rather than in your business, but that was a thousand pounds or $1,000 or whatsoever. Well that would go back on your net profit because it’s a one off cost.
Paul Green:
So training, flying across the world to go to conferences, all of those things are considered one off costs and go back on. In the scenario you just talked about there Richard, where the business owner is inextricably linked with the business, that money would come off the net profit because if to replace you as the business owner would cost me let’s say 40,000 pounds or $40,000 a year, then that would come off the net profit. And EBITDAR is a figure which is normally argued between accountants. I think when selling an IT business, if they’re valued at one times recurring revenue, it’s almost an irrelevant figure.
Richard Tubb:
If any of your listeners are thinking and saying, “I’ve heard of EBITDAR, but I don’t really know what it is,” and you’ve just given a fantastic explanation. Well, I should say to your listeners, you’re not alone because I don’t fully understand the ins and out of it, and I built and sold an MSP business.
Richard Tubb:
What I would say is when it reached a point where we did start to go into the nitty gritty of the thickest and that I reached out to an external consultant who helped me to understand these things, and helped me organise the books in the way that a buyer would want to see them. So we as MSPs are very used to talking to our clients about outsourcing the things that they’re not good at, or they don’t want to do. When it comes to selling a business or even valuing a business, I would argue that we need to take our own advice. We need to step out and reach out to somebody who has got experience in valuing IT businesses that may not be your accountants, and who can explain here’s the things you need to do to put your business into a sellable state.
Richard Tubb:
I can tell you from experience, you’ve got a figure in your head of what your business is worth. I have probably just rained on your parade, I’m talking about the one times recurring revenue, but when you actually speak to a buyer, prepare for it to get much, much more aggressive because the potential buyer will pull any and everything out that they think can devalue the business, because they want to pay as little as possible. So my advice for listeners would be reach out. Seek somebody who’s got experience with helping put your business into a sellable state for all of the reasons that we’ve just talked about. Get external help for it because it really is money well spent.
Paul Green:
What should we be doing to make the business worth more? So obviously adding in more monthly recurring revenue, but you’ve been there, you’ve hired a consultant. What would you do to that business to make it worth more when it came to exit?
Richard Tubb:
Well, I’ll bring out one of the ones that I get asked about all the time and that’s, “Is a business worth more if it’s got longterm contracts?” I would say the rational way of explaining is yes, if you’ve got longterm contracts with clients, it’s worth more. However, I am the exception to the rule, my MSP business only had 30 day contracts. We actually used it as a selling point when we said we lived or died by the service that we provided to customers, and I managed to sell my business and so that’s the exception to the rule there. But for the most part, I think buyers are looking for sort of 12 month plus contracts there. The other big thing that I would say is, I’ve just mentioned intellectual property, which it’s one of those words is a little bit like EBITDAR people throw it around, but not really sure what it means.
Richard Tubb:
Well, intellectual property for MSPs is the systems, the processes, and the documentation of your business. If you want to be extracted from your business, if you were to get rid of all of the staff within your business and to bring in other people to run that business, are there the instructions, are there the standard operating procedures, are there the checklists, are there the documentation for the client sites to enable somebody with the necessary technical skills to step in and to run your business? That’s what’s valuable about your business, because I’ve seen lots of MSPs who have gone through mergers, and I’m doing the quote signs above my head while saying that, it’s typically where a bigger business buys a smaller business and merges them in.
Richard Tubb:
The biggest challenge with those types of mergers is the two cultures coming together because businesses do things in different ways, and so most of those mergers at the small range of the market I’ve seen have turned into an absolute nightmare for the buyer, because the other business doesn’t tend to have standard operating procedures, checklists, and documentation. They just do things the way they’ve always done them, and that’s very difficult to scale. That’s very difficult to hand off to other people. So in answer to your question, how can you increase the value of the business? Contracts certainly, but intellectual property, documentation, processes, checklists, talking yourself out of the business, essentially, that’s what’s going to increase the value of your business to a potential buyer.
Paul Green:
Which ironically is also a way to give yourself a business that gives you a better lifestyle, and requires less of your time to run it. It’s amazing that the two outcomes are completely different and yet the process to get there is exactly the same.
Richard Tubb:
I had no intentions of selling my MSP business, and then a life event happens to me, I don’t mind sharing with you, but it was actually my dad passed away. He was a ripe old age, he was 82 years of age, but it was one of those life events that happens, Paul, that causes you to take stock and say, “What do I want to be when I grow up? What do I want to do with my life?” And after his funeral, suddenly everything changed for me. But the interesting thing was I built a business that was scalable. I built a business that could run without me and so I was in a position to make the sale of the business fairly quickly. So even if you’re not thinking about selling the business, or you think I’m going to do this till the day I retire, there is no downside whatsoever from building that intellectual property, from getting your business into a space where it can run without you, because it gives you options. And that’s certainly the case for me.
Paul Green:
Richard, what’s the best way for us to find out more about you and get in touch with you?
Richard Tubb:
The best way to stay in touch with what I do is to grab my weekly MSP insights email. So if you go to Tubblog.co.uk/NL for newsletter, you can sign up there and all of my contact details are on the website as well.
Voiceover:
Paul Green’s MSP marketing podcast, ask Paul anything.
Steve:
My name is Steve from CCS IT. Should I be doing ads on Google?
Paul Green:
Great question, Steve, thank you. And actually surprisingly hard one to answer because if you’d asked me that question 10 years ago, let’s say back in 2010, the answer would have been, “Absolutely you’ve got to,” because that’s where the easy traffic is. That’s where the easy money is to be paid. But here now in 2020 things are not quite as clear cut as that, because you can make money and quite good money off Google ads, but it’s certainly not as easy or as profitable as it used to be. Let me explain some context. If you go back 25 years, back to 1995, which makes me feel old and you think about marketing back then it was very wasteful. You had to spend a lot of money without really knowing what was working.
Paul Green:
Then Google came along and it was the first en masse search engine, and it was the first one to introduce en masse, the technology of matching up people who had something to sell to people who wanted to buy that thing. That’s what Google ads is, and it only came around about 1999 and back then you were paying a penny per click, one or two Pence per click. The cost per click was absolutely tiny, and then what happened is the cost per click started to go up, and Google started to make a series of changes, and we get to today where the ads look pretty much exactly the same as organic listings. Apart from a tiny little green thing that says ad, which most people don’t see. The ads get a huge amount of clicks because they are dominant, especially on mobile phones.
Paul Green:
They dominate the real estate of the screen and there are fewer ads than they’ve ever been. Do you remember when there used to be like four or five at the top and then others down the side and others at the bottom, all of that’s gone now. We’ve just got the ones up at the top and the cost per click is huge. In some areas you can be paying 30, 40, 50 pounds or dollars per click, and so your cash cost of using Google ads is fairly high. Saying that however, the concept still stands that Google is putting you in front of people who are looking for someone like you. I think if you are going to use Google AdWords to try to find MSP clients, it’s probably a no, which is a very strange thing for me to say because actually an MSP client can be worth 10, 20,000 pounds or dollars a year.
Paul Green:
Let’s say you have to pay 500 pounds to win a $10,000 client, that’s a great return on investment and everyone would do that every day. But here’s the thing, to get someone as an MSP client, I believe you have to build a relationship with them first. We all know that when someone switches MSPs, there’s a huge amount of fear involved because the risk is that you destroy their business, that you get their technology wrong, and that’s why they have to have a relationship with you before they’re willing to switch.
Paul Green:
I don’t think you can build that relationship off traffic from Google. So I think if you’re going to do Google ads, what you should be doing is focusing on the people who’ve got an immediate need and problem now, and that could be please help us for this, but it could be a laptop repair, or it could be a printer problem. Or it could be some kind of technology problem that they need some help with now. I think if you can get those people and get them to make some kind of commitment to use you for a repair or a fix, and then use that not for that ad revenue because no one wants that ad revenue, but use it as a lead generation tool as a relationship starter, then that can lead to you then going and having proper conversations with these prospects, with these new clients, sitting down, maybe even doing audits with them and ultimately looking at switching them over to MSP.
Paul Green:
I’ve got about two maybe three clients that are using Google ads, and they’re happy enough that they stick with it week in, week out. There are a couple of other people I’m aware of in my MSP marketing Facebook group who again are spending money on Google ads. There’s a figure, they reckon in all the clicks spend, it was costing them three grand to get a client, but the clients were coming in at 10,000 pounds a year or whatever those figures were. So again, there’s a good return on investment, particularly since you do keep clients for years and years and years.
Paul Green:
My most successful client in terms of Google ads put himself through a Udemy course, that’s Udemy.com. It’s a training course, it was a 25 hour course. If you type Google ads into Udemy, it’s the one that comes up at the top. It’s 25 hours. Just make sure you pay no more than about $30 for it because the price does vary depending on which browser you go in, and how often you visit Udemy. But he put himself through that course and he optimised his Google ads account in ways that even, I have no idea. Some of the things that he was doing is fairly impressive what he’s done. So I think if you’re going to do something like that, you either get an expert to do it for you or you do that yourself. You train yourself and you teach yourself the best way to do it, but ultimately you’ve got to have that mindset of, “It’s going to cost me a couple of thousand pounds or dollars to get a new client, and that might just be for a piece of one off work. That’s only the start of it. I’ve then got to do the hard relationship building.”
Paul Green:
Not as easy as it was 10 years ago and certainly not easy now, but it is potentially something to throw into your marketing arsenal.
Voiceover:
How to contribute to the show.
Paul Green:
Good or bad, I’d love to know what you think of the show. Why don’t you drop me an email? It’s [email protected] or why not come and join me in my Facebook group. Just go into your Facebook app, type in MSP marketing up at the top. Go into groups and I’ll see you there.
Voiceover:
Coming up next week.
Tara Dolby:
We often get contacted by people completely out of the blue. Sometimes when you talk to them, it’s a case of you’ve never listened to what we do.
Paul Green:
That’s Tara Dolby. She works for the BBC here in the UK as a producer, and she’ll be telling you next week how to get the media interested in featuring your MSP in stories on radio and in newspapers. We’re also going to be looking at something called Maslow’s hierarchy of needs. It explains how the business suffers when you’re tired and grumpy. We’re going to be answering your question from an MSP about a wonderful marketing concept called authority sites. I’ll explain exactly what those are and everything else in next week’s show.
Voiceover:
Made in the UK, the MSPs around the world Paul Greens MSP Marketing podcast.
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