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Voiceover:
Made in the UK for MSPs around the world. This is Paul Green’s MSP Marketing Podcast.
Paul Green:
Hello and welcome back to the podcast. Here’s what’s coming up on today’s show.
Frank DeBenedetto:
Basically, it gives them permission to buy from you, right? Because nobody likes to be sold, but if you educate somebody simply and keep their interest and make it emotional for them, they will buy.
Paul Green:
We’re also going to look at whether or not your MSP should be doing a printed newsletter and I’m answering a question for our listener on how much you should spend on getting your logo refreshed.
Voiceover:
Paul Green’s MSP Marketing Podcast.
Paul Green:
One of the best things about working closely with MSPs is just how much monthly recurring revenue you have coming through your business. I promise you, there are very few other sectors like this, where there’s so much monthly recurring revenue. And in fact, it’s become the norm. In fact, you look at sectors like retail, hospitality, lots of other businesses that have really struggled through this Coronavirus problem. And a lot of them have no recurring revenue whatsoever. There’s a big difference between recurring revenue and repeat sales. So a good restaurant might have very, very good repeat sales where the same customers choose to come back again and again and again, but that’s not recurring revenue because you have to make a sale every single time. Whereas for an MSP, the money just keeps coming in every month. It’s recurring whether or not people use the service and that is beautiful.
Paul Green:
It’s even more beautiful when you look at it and realise that just adding £1 or $1 per month to a client’s monthly recurring revenue actually has an incredibly, incredibly long tail to it. And what I mean by that is it will build up over a period of time. So let’s say you’ve got a client and let’s say, there’s just one service that you sell them, maybe one user and you managed to add on something that generates another pound or another dollar a month. Now you might look at that and think, oh, it’s only another pound, it’s not a huge amount of money, but it’s not just another pound. You see in the first year alone, that pound or that dollar is going to turn into £12 pounds because of course it’s monthly recurring revenue. So that pound’s going to turn up every month for the next 12 months. And actually most MSPs, they keep their clients for a very, very long time.
Paul Green:
So maybe you’d keep that client for another five years and they keep taking that service for another five years. So suddenly it’s not £12, it’s £60. All of this, remember from one sale, you made one sale and that’s turned into 6£0 worth of revenue. If in fact you keep them for 10 years, then obviously that’s £120 worth of revenue. And this is the way you’ve got to think about monthly recurring revenue. That even a tiny, tiny increase can have a massive impact over a long period of time. You’ll have heard me say before on this podcast, something which comes from the legendary marketer, Jay Abraham, that there are in fact only three ways to grow your business. Number one, you get more new clients. Number two, you get your existing clients to buy from you more often. And number three, you get your clients to spend more every single time they buy.
Paul Green:
Now, monthly recurring revenue ticks number two and number three, it’s absolutely beautiful because they’re buying more often because they’re buying essentially every month. And of course, trying to get them to spend more, well that’s about finding problems that they’ve got. It’s about finding things that keep them up at night. Fears, worries, concerns, stuff they want, stuff they need. And then finding a service that will take all of that away for them. So every little pound or dollar that’s added turns into quite a sizeable chunk of money over a period of time. And if you’re not going anywhere in your business in the next 5 to 10 years, that’s absolutely how you’ve got to look at it. In fact, maybe, just maybe you’d set yourself a target and you’d say, what if we can increase the amount of monthly recurring revenue by 3% every single month. Or what if we can increase the average lifetime spend of a client just by increasing the monthly recurring revenue across all of their users by a tiny amount once or twice every single year.
Paul Green:
Now there’s one more factor to think about when it comes to that monthly recurring revenue. And that’s what happens when you sell the business. What happens to that monthly recurring revenue? Back in episode 21, we had the business growth expert, Richard Tubb on, and we were talking about how do you value an MSP when you come to sell it these days? And Richard said that, “The standard valuation for an MSP these days is one times annual recurring revenue.” So what that means is if you’ve got someone that’s paying you a pound a month for monthly recurring revenue, then obviously you would annualise that. So that £1 a month turns into £12 and someone will come and buy that £12 from you for £12. So every single time you’re adding a pounds worth of monthly recurring revenue, not only are you increasing the turnover of your business now and in the next 5 to 10 years, but also you’re increasing the amount of money that you will be paid for that business when you exit it. Everyone wants a successful exit from their business.
Paul Green:
And what’s interesting is buyers want to buy recurring revenue streams because that de-risks it for the buyers. This literally is, to use a cliche, it’s a win win. It’s a win for you. And it’s a win for the buyer. You see how important this is, and this is why increasing monthly recurring revenue really should be a priority task for you and for your management team. Maybe you’ve set it up that in your weekly or your monthly reviews of where the business is going. You look at your levels of monthly recurring revenue and you look at it and say, right, what’s our increase been for the last month compared to target and our 3 or 4% increase, whatever it is you want to achieve, how are we doing with that? If we haven’t achieved it, why? Why aren’t we doing this?
Paul Green:
Are we not doing enough quarterly business reviews or strategic reviews? Are we not bringing on enough new services that we can talk to the clients about? Are we not talking to the clients enough? Are we not finding out what it is that they want? What it is that they do need and the things that are keeping them awake at night? Because it’s only when you’re doing these things that you can spot the opportunity for new monthly recurring revenue.
Paul Green:
Here’s an exercise that might be worth you doing just to show how incredibly profitable this could be for you. What if you added a new pound today and what if you kept that client for another 10 years? And then in 10 years time, you sold that business. So that £1 would contribute £120 worth of revenue over the next 10 years. And then a future buyer is going to give you, you personally, a further £12 to buy that recurring revenue stream from you. A tiny little sale today to add £1 per month and that’s going to be worth in total £132. Some of that to the business, some of that to you personally, and that’s just for a pound.
Paul Green:
How easy is it to make a series of phone calls to your clients and actually add £1 per user per month, upgrading them to something or adding a new service on. You can literally add hundreds and hundreds of pounds of monthly recurring revenue just by doing your strategic reviews or picking up the phone and just talking to your clients and having loads of new services ready to offer to them. This is so important, it’s got to be made a priority for your MSP.
Voiceover:
Here’s this week’s clever idea.
Paul Green:
If you’d asked me about this tool a few years ago, I’d have probably poo-pooed it in some way, I’d have been a little bit negative about it. And my opinion has changed over the last few years because I’ve seen the power of doing it right. What’s this tool? It’s sending a printed newsletter out to your prospects. Now I don’t mean an email newsletter. I absolutely mean a printed one. What’s the power of a printed newsletter? These days, it’s the power of standing out while building a relationship with your prospect.
Paul Green:
You see over the last 20 years or so, the balance between what we get in the post and what we get digitally has completely switched. You think about 20 years ago, we all had far too much post, loads of it. And we didn’t really have that much email. Facebook didn’t exist. All the social media platforms didn’t exist. So digitally, we had a very little amount of stuff to deal with. Flash forward to 2020 and it’s just a little bit overwhelming, isn’t it? There’s an enormous amount of stuff that we have to deal with digitally, but we get very, very little in the post and this is the big opportunity with a print newsletter. You can put together something that’s well-made, well-written looks great and communicates really well to your prospects and you can post it to them. And the beauty of posting it to them is they are much more likely to actually read it and maybe take some action on it.
Paul Green:
So what does a good printed newsletter look like? Well, there’s all sorts of different formats that you can use. You can get into four page printed newsletters. I quite like using the UK sizes. I quite like taking an A3 sheet of paper. That’s a great big sheet of paper and then sort of folding it into the middle. So you end up with an A4, four page newsletter or that’s kind of close to the sort of US letter size, but it’s one sheet of paper. I think that’s a very good quality way to do it. That’s quite a commitment to do that every single month. I think the thing that’s easiest for any MSP to do is a simple two page newsletter. It’s literally a sheet of paper. You’ve got content on the front and you’ve got content behind and you can fold that up in half and post that out relatively inexpensively. In fact, there are services that will even print this for you. And I’ll give you a recommendation in a few minutes time, but there are just a few things to kind of figure out.
Paul Green:
First of all, what do you want your newsletter to achieve? Now, I recommend that you send your newsletter out to your prospects, the people that are known to you, perhaps they’re people that you’ve spoken to in the past, or they’re people going through a sales process with you, or maybe there are people who are just in your audiences. Maybe you’ve got a connection on LinkedIn and by connection, I mean a special connection, you’re not just connected to them. Maybe you send this to people who are just on your email list because you’ve only got a couple of hundred of those.
Paul Green:
There is a balance of course, to be made between the cost and effort of doing a printed newsletter every single month and the benefit of doing so, but understand this. If you can get a high quality printed newsletter in front of your prospects on a regular basis, it will build your relationship with them really quickly. And remember, one of the goals of collecting together a bunch of leads and prospects into audiences is you want to build that relationship with them because people only buy when they’re ready to buy. And you want to make sure that it’s your MSP and not someone else’s MSP that’s in front of those people the day that they’re ready to take action, leave their incumbent and move on to someone else. And this is the beauty of a print newsletter. Print newsletters also hang around. Not only are they likely to be read, but they do hang around. People file them away, keep them on desks, pass them on to colleagues. It’s just beautiful.
Paul Green:
So what are the things that you need to consider? Well, you need to consider how the newsletter is designed. And I would recommend that you just outsource this, get a designer to do it for you. You need to consider what kind of content goes into your newsletter. Now I’m a big fan of re-purposing content, of reusing content in different formats. So you can actually take content that’s been on your social media, that’s been in your blog and you can re-purpose that for the print newsletter. And again, you personally probably wouldn’t want to do this yourself. You just outsource it. You’d find someone on fiverr.com or one of the other platforms that can do this for you.
Paul Green:
The other aspect to consider then is the printing and the posting of it. And there’s a service that I quite like, which operates both in the US and the UK. And it’s called Stannp, it’s Stannp with two Ns. Ns for November. S-T-A-November-November-P.com. And if you go on there, you just pick your country site and they will print it and they will post it for you. And often they can do this for less than the cost of the postage if you did it yourself, because of course they’re buying thousands and thousands and thousands of pounds and dollars worth of postage every single day. Certainly a lot more than you are doing, but here’s the thing. If you’re going to do a print newsletter, you’ve got to make a commitment to doing it every single month or every single quarter, but at least regularly and routinely. Printed newsletters can be very, very powerful at getting your message in front of people and sticking in their mind but only if you use them consistently.
Paul Green:
You can’t just send out your first printed newsletter with a big old, hey, we’ve started a printed newsletter and we’re going to send it to you every month. And then you don’t because, okay, they won’t notice. No one is sitting there waiting for your newsletter to turn up, but it doesn’t have any impact when you just do it as a one off job, like most marketing for MSPs, all of the impact comes from doing it in the long term. You’ve got to keep doing it again and again and again and again, because of the timing thing. Because people only make that shift, they only change MSPs now and again. It’s a very rare occurrence and their mind is only open to having a conversation with a different MSP every now and again. This is not an everyday thing for them. You’d have to sell something completely different to be able to drive a much slower sales cycle, but then you wouldn’t benefit from insane client loyalty and all that wonderful monthly recurring revenue. So if you’re going to have a printed newsletter go and have a go at it.
Paul Green:
Now I’ve got a bit of a blatant plug. Before I get to my actual blatant plug this week. And that’s that I provide a printed newsletter to my clients. If you go and check out my service, mspmarketingedge.com, as part of the enormous package of stuff that we deliver to our clients every month, we now deliver a two page printed newsletter. We do it as a PDF. It’s in an InDesign format, it’s in publisher format and we just make it easy for you. So you can just get it changed just a few tweaks to personalise it to your business, upload it to Stannp, upload your prospects and just get it posted out. It doesn’t take you long or even a member of your team long. You just get it done. And it’s absolutely beautiful. And you can check out the details there at mspmarketingedge.com.
Voiceover:
Paul’s blatant plug.
Paul Green:
So seeing as I’ve already given myself a blatant plug, let me do a slightly less commercial one in this section of the podcast. I’ll offer you something free. If you don’t have a free paperback copy of my book on MSP marketing, here’s how you can get one completely free. It’s called Updating Servers Doesn’t Grow Your Business. It’s a 44 page paperback book, and I’ll send you one completely free of charge if you live in the UK, or if you live in the US. The rest of the world, I’m afraid, you’ll just have to have a PDF copy. Now, wherever you are in the world, to get the book is exactly the same. You just go onto my website, paulgreensmspmarketing.com, and you’ll see right there on the home page, there’s a picture of the book and a form to fill in, to request a copy is sent to you.
Voiceover:
The big interview.
Frank DeBenedetto:
Hi, I’m Frank DeBenedetto from Two River Technology Group. I own an MSP in New Jersey, and I also am the founding partner of audIT Sales Presentation System, that helps MSPs sell more easily and generate additional MRR revenue.
Paul Green:
So, Frank, one of my favourite story is to get onto the show is when an MSP has come up against a problem and they’ve invented a solution to that problem, and then other MSPs want to go and buy that solution. And essentially, that’s your story, isn’t it.
Frank DeBenedetto:
It’s definitely my story. We’ve been an MSP for probably about 16 years. We never did break-fix. So we were always a pure play MSP, generated MRR, only working with clients who were paying us something every month. And the story really starts in 2012. I hesitate to say it was similar because what we’re experiencing right now in the world is certainly unique and we never thought we’d face this, but a really large hurricane hit right over our part of New Jersey. Many of the businesses, most of my clients and ourselves included didn’t have power for anywhere from 10 to 14 days. And it exposed a fatal flaw in managed services. And that was that traditional managed services is light on business continuity disaster recovery. And I did not sell electricity or generators. So we had clients that paid us good money every month, did everything we told them to do, and couldn’t run their business for two weeks and that created a big challenge.
Frank DeBenedetto:
From there, we pivoted to become a cloud services provider where most of our solutions stack was around cloud that would then serve them well, no matter where they work. Whether they had power or not, they could just go somewhere else as long as they had internet. What I found was that it was easy to upsell and cross-sell my existing clients because I had the relationship and there was certainly a need and they saw the value in it. But I had a very difficult time conveying that value to new prospects. And because cloud was more expensive than anything that I sold before, it became a challenge. And I just got really tired of losing deals based on price or lowering my price down, which meant I had less margin. And that was really what brought me to the point where I decided to create a tool because there was nothing out there in the industry to help me sell.
Paul Green:
So tell us about the tool you created.
Frank DeBenedetto:
I’m not a salesperson. My background is in technology. I went to college, I have a degree in mechanical engineering, so I really don’t have a sales bone in my body. When I started my MSP, I realised I had to sell to be successful, but it wasn’t something that I really liked to do. One thing that I learned about some other MSPs was that that’s exactly how they were. They don’t love selling either, they do it, it’s a necessary evil for us, but we’d much rather be playing with tech. The tool that I created is a sales presentation system, because one of the things that we found was that we were pretty good at marketing. And most of the marketing offer ends in some kind of assessment. We’ll come in, we’ll do an assessment or an audit on your environment and it’s changed over the years. Sometimes it used to be like a cloud readiness assessment. And these days, sometimes we’ll call it a cyber security assessments.
Frank DeBenedetto:
So whatever the buzz words are, it really comes down to us going in, evaluating what they have and then reporting back. And then of course, showing them deficiencies and then providing some sort of presentation. Well, that presentation was killing me. I was getting prospects to raise their hand and tell me that, yes, they were interested in having me do this assessment. But I would go in and I’d gather up all the details, all the information. And then I struggled to put together some sort of presentation. It took me hours upon hours. I’d say about four to eight hours to put something together, a lot of copying and pasting and praying. And what I found was that it changed it almost every time. I would do what I did the last time I sold something. If it didn’t work, I change it. It was just a really, really difficult process that I found. It didn’t have a great rate of success. It was hard for me to measure it because I changed it all the time, I didn’t know what worked or what didn’t work.
Frank DeBenedetto:
And so it really led me to, to look, I found there was nothing in the industry at all that helps you put together these presentations. And really the goal was to sell. I knew as an MSP, and I truly believe a lot of other MSPs really are motivated by a strong desire to help small businesses. We know we have great tools and great technology available to us. And we almost have an obligation to SMBs to get that out there, but it’s really hard to sell it because it’s so technical and the people that we’re selling to are not technical. We call it the curse of knowledge. They’re lower on that scale and we’re pretty high up and there’s a gap there. So audIT was created to help solve that problem.
Paul Green:
Without going into the technicalities of how that works, because most MSP owners are exactly the same as you Frank. They’re great technicians, they’re not great salespeople, but they know they need to sell. So how does the tool actually help them to create the sale?
Frank DeBenedetto:
It creates a sale because it goes back to two basic principles of what needs to be done in order to communicate properly and sell. Number one is it’s simple. And number two, it’s emotional. And the report itself is a simple overview of what they have. It’s colour coded and it’s scored so they can easily see where they are today. And then I can show them where they could be. So I’m future pacing them so they can kind of see the value. And then our solution makes perfect sense in that scenario.
Frank DeBenedetto:
So it really helps you just take something that’s ordinarily very complicated and it lets you, I don’t want to use the word dumb, but it lets you dumb it down to a level where a prospect would understand. And then we use this for business reviews too. So for existing clients, we’ll go in and we’ll show them where they’re at. And every once in a while, we introduce a new product line and we want to be able to explain to them what it is. It’s all based on color. If they see like a red box, they say, what is that? And they want to turn that red box green, which means it’s good and resolved and it helps make the sale much easier.
Paul Green:
Yeah, this is such beautiful stuff because of course we know that decision makers do make that decision emotionally. They can’t cognitively tell a good MSP from a bad MSP. So let’s put some colours and pretty pictures and things in front of them. And it almost gamifies it, doesn’t it? It almost turns this process of them deciding to go with one company over another into a game. And I think given the choice between someone that talks about solutions and technologies and services, and given a competitor with very similar pricing or very similar seeming offering. But they’re able to use a well-designed report that as you say, talks to them at an emotional level, that would be a no brainer.
Frank DeBenedetto:
You hit the nail on the head. First of all, the gamification requires no instruction. We all, at this point, understand the stoplight mentality: red, yellow, green. If you see red, you say that’s bad, you see green, you know it’s good. So it’s very easy for them to understand. The simplicity is actually almost funny because some MSPs don’t want to believe that this works. They think that you need to go in there with stacks of empirical data. And the reality is, is that your prospect has no idea what you’re talking about and you know what language they speak. They speak the universal language of money when you leave that to them. And that’s the only way you give them a way to compare you to another MSP. They will flip to the last page of your proposal, go to the bottom line and they will simply compare two numbers. And as you know, no two MSPs are selling the exact same solutions.
Frank DeBenedetto:
That’s an impossible way to empower an SMB to buy from you. It’s not a car where we say it’s the identical car. And this dealer is $1,000 cheaper. That’s a commodity product. We’re basically putting a sheet over the car and telling them here’s vehicle one and here’s the vehicle two. And then what we’re doing is we’re basically explaining all the nuts and bolts and all the parts of the car to them and confusing them. And at the end of the day, all they’re going to do is just buy based on price if you don’t give them any way to evaluate the value. And that’s what audIT really does. It eliminates all of that and lets you have a business level conversation and stay out of the technical weeds. Basically it gives them permission to buy from you because nobody likes to be sold. But if you educate somebody simply and keep their interest and make it emotional for them, they will buy.
Paul Green:
Frank, thank you. Tell us where we can find more information about this product and maybe even get a demo.
Frank DeBenedetto:
You can do a full 15 day free trial of audIT and you can go to our website, which is www.auditforit.com and that’s www.auditforit.com.
Voiceover:
Paul Green’s MSP Marketing Podcast. Ask Paul anything.
Alex:
Hi, my name is Alex from Snap. How much should I spend on getting my logo updated?
Paul Green:
Thanks Alex. Great question. And a very short answer to that. Not a great deal of money at all. The main reason being your logo just isn’t important. It really isn’t. It’s important to you and your other half and your family because it represents the business. It’s the visual representation of the business. And we’ve all read the stories online about the Nike swoosh and how that was designed for whatever it was, $20 back in the 60s and is considered one of the most important pieces of IP, intellectual property in the world. But that’s Nike. It’s the same as Richard Branson’s Virgin, who a similar thing, cheap logo. It’s gone on to be part of a multi-billion dollar fortune, but it doesn’t really matter. You see the logo isn’t the brand, the logo is just a part of the brand. It’s the visual representation of the brand.
Paul Green:
The Virgin logo is kind of a bit horrid. Same with the Nike swoosh. It’s like, what is it? It’s just a tick. What does it mean? But those in themselves, the fact that those logos exist is just part of the story. It’s what they represent that’s more important. And they represent the way that people feel about Nike. They represent the way they feel about Virgin. I’m a big fan of Virgin. I really buy into Richard Branson and his personality and try to fly Virgin when I go to the States. And did use Virgin trains until they lost the franchise here in the UK. Virgin is a good brand for me because I feel good about it. And the fact that I can see the logo in my mind right now is just simply because I’ve been seeing it for, I don’t know, 30 odd years or so.
Paul Green:
What I can’t picture right now is any of the logos of the MSPs that I’m working with. And yet I’ve looked at them a number of times, but the reason I can’t picture them is because they don’t really matter. No one picks you or doesn’t pick you based on your logo. With one caveat actually. If your logo looks like it’s been drawn by a five-year-old with crayons, then yes, it will do some damage to you. Of course, it will. You’ve got to get a fairly reasonably professional logo put together, but you shouldn’t really be spending a great deal of money on it at all because it doesn’t matter. It’s something you get done, it looks good enough. And then you replace it down the line when it turns out that your logo has actually dated quite badly. You just get it refreshed a bit. You don’t need to think too much about it.
Paul Green:
I would spend more time worrying about your direct response marketing as in the way you actually drive leads and prospects and generate new clients for the business than I would faffing about with the logo. It simply isn’t that important. So let me give you a couple of websites where you can go and get a logo made for you. There are all sorts of websites now offering something called logo competitions. That’s where you can put a brief online and you say what you’re looking for and designers actually compete to win the work. I don’t know how much these things cost. You probably pay a little bit more than if you just went out and commissioned a logo from fiverr.com say. But I quite like the idea of a contest because you’ve got lots and lots of different logos that you can choose from.
Paul Green:
So a few sites to look at. There’s one in the UK, it’s called 99designs.co.uk. Oh and by the way, this and all of the other website addresses we’ll pop into the show notes on my website. You’ve then got one called designcrowd.com that looks like a worldwide one. You’ve got hatchwise.com. There’s another one called domoredesign.com. That seems to be a UK specific one. And then we’ve got another one, which is exactly what it says on the tin, which is logocontest.com. I would have a look at all of these sites, see what you can get for £100 or $100, or maybe even just a little bit more than that. Get a competition done. Get your logo changed. Bish, bash, bosh, it’s done. You don’t have to think about it for another 10 years.
Voiceover:
How to contribute to the show.
Paul Green:
So many MSPs have now had their questions featured on this podcast. And I am looking for more people to record a question for me. So I would love you to do one for me, please. It can be a question about any aspect of marketing whatsoever. Go on. Challenge me. Two easy ways to do this. You can either record something using the voice recorder on your phone and then email that through to me and it’s [email protected]. Or if you go onto any of the podcast pages on my website, you’ll see there’s a little orange button where you can send me a voice message. It’s very simple, no software to download you do it all from the browser and I would really appreciate that burning marketing questions in your mind right now. I’d appreciate you recording that and sending that through to me.
Voiceover:
Coming up next week.
Peter Melby:
Google who’s always been regarded as having a great culture. Their average employee tenure was only 1.9 years. I looked at it and said, well, wait if I have a business that needs my employees to stay longer than Google’s business, how do I do that?
Paul Green:
That’s Peter Melby from bossorbabysitter.com. He’s the owner of an MSP with 85 staff based in the States. He’s developed this system to help you feel more like their boss and less like their babysitter and my goodness haven’t we all felt like that about our staff sometimes. So he’s going to be joining us on the show next week. We’re also going to be looking at how you can run a marketing audit on your competitors, find out exactly what kind of marketing they’re doing and exactly what you can do to make sure they’re not stealing a march on you. And we’ll be looking at why you must offer sales incentives to your hottest, hottest prospects, because people hate to be sold to, but they love to buy. We’ll see you on next week’s show.
Voiceover:
Made in the UK for MSPs around the world. Paul Green’s MSP Marketing Podcast.
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