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Voiceover:
Fresh every Tuesday for MSPs around the world. This is Paul Green's MSP Marketing Podcast.
Paul Green:
Hello, and welcome to episode 67 of the podcast. Here's what we've got coming up for you this week
Jay McBain:
More than 23% of customers threw up their hands and said, “I can't manage it, from a security perspective, a basic infrastructure perspective.”
Paul Green:
I've also got details of a free monthly live MSP marketing webinar, which is going to give you a real insight into the kind of marketing that you should be doing. Plus, we'll talk about how you can get loads more referrals from your existing clients.
Voiceover:
Paul Green's MSP marketing podcast.
Paul Green:
Now, if you've got a salesperson who works with you within the business, you'll know it's actually sometimes very hard to keep them motivated. It's a difficult job selling MSP services. It's all right for you when you do it because it's just one of the 782 things that you do on a daily basis. But for someone who's dedicated job is actually chasing these deals down, closing these deals, bringing on board, new clients, it can be a very, very tough gig. It's a long sales cycle. There's a lot of very complex stuff involved. And yet there are many, many people who do sales for MSPs and do it incredibly well. And I think the thing to focus on is three key ways that you can motivate any salesperson. Now you could actually apply these to yourself, but I do really intend for them to be used with your staff, with people that you're working with.
Paul Green:
And again, and I'm actually primarily looking at these for motivating someone whose job it is to bring in new business or brand new clients, but you could also use these with your account managers. Because you'll know there are two types of salespeople, you've got the person who brings in the brand new clients, and then you've got the person who looks after the existing clients and upsells them stuff. They're two completely different sales roles, account management and new business. And they require different skill sets. I don't think one person should be doing both of those roles because it's far too easy for them to hide behind account management, which let's be honest, is a much more pleasant way of selling. Isn't it? It's going out to see people you like and collecting orders sometimes, or just telling them about ways you can make their life easier.
Paul Green:
That's not a difficult sell in any way, whereas bringing on new clients is. So my experience is you give one person, both those roles, they're going to spend 95% of their time account managing and only 5% looking for new clients. Anyway, I digress. How do you motivate a salesperson within your business? There are three things you need to do. And the first thing is you need to get the commission level right. Now, commission, oh my goodness. We could have an entire podcast series just dedicated to commission. And I don't consider myself a big expert in this area at all. There are some fantastic salespeople out there. People like Fiona Challis from the Next-Gen Sales Academy. She was a guest on the show last year. And I must get Fiona back on again, because this is one of her areas of expertise. There's a guy called Paul Lloyd at sellerly.co.uk.
Paul Green:
You can find his website address in the show notes. In fact, he was my interview, my guest, right back in the middle of December last year in episode, I think it was episode 57. So there were loads of very, very specific sales experts in our world out there. But you can look at commission for your salesperson and you can say, “What's going to motivate them to sell the right thing.” And I guess that starts with you asking yourself, “What do I want?” You probably want more monthly recurring revenue, because that's what most MSP owners and managers want. More of that lovely cash that just turns up every single month. So maybe you'd put your commission structure together so then it rewards your salespeople for bringing in monthly recurring revenue. Sure, they get a bit of a reward when they sell a project because we need to do this project sometimes, but they get the greater reward for selling monthly recurring revenue.
Paul Green:
And I prefer commission schemes that aren't capped, no ceiling on a commission scheme because that motivates someone to pick up the phone, that extra time. It motivates them to go that little bit further. We want to motivate them to do the things that matter. So for example, you might say that they get, just as an example, 5% or 10% of any monthly recurring revenue for the first year. So if they sell, let's say $1000 or 1000 pounds worth of monthly recurring revenue, they're going to get a hundred every month for the first year. Now, you know you're going to keep that monthly recurring revenue for three, four, five years, so that's why you don't have to pay commission forever. However, they get the beauty of a little bit of extra money coming in every single month. It's actually protects you that way, because if the monthly recurring revenue falls over, you stop paying commission on it.
Paul Green:
Oh, and you should also have something built into your contracts, that if they leave for whatever reason, you fire them or they decide to go, the commission ends and you don't have to pay out any more commission. Because trust me, I've been there where I've had to pay out commission to people that I'd fired because it was, I'd got the contracts wrong and that hurts. Paying commission to someone you don't even want working for you anymore, that's a way to make you feel sick every month. So make sure that the commission ends, the commission trail as we call it, it ends when someone leaves your employ. So you've got to get the right kind of commission. You've got to make it easy for them to earn that bonus, easy and rewarding. And as I say, you want to reward them selling the right kind of thing.
Paul Green:
The second thing that I think you need to keep your salesperson happy is public results. When I was around about 18, I got my first job in a newspaper. Now I went on to be a newspaper reporter and then worked in radio. But my first ever job in newspapers was actually selling advertising. I was really bad at it. And in fact, I quit about a week before they were going to fire me, which is pretty cool, good timing. And one of the things that worked really well in that sales department, obviously it wasn't their recruitment strategy because they were hiring people like me, but one thing that worked very well is we had a flip chart. And every day the sales manager would do a great big thing at the start of the day. She talked to us about what we were expecting to bring in.
Paul Green:
And I was just on the phone sort of just selling, I think it was jobs I was selling, our job advertising and this was a very long time ago, this was the 1890s. And I was selling… Was it property as well? I can't remember. Anyway, I was selling a couple of different things, but she'd start the day saying, “What do you think you're going to bring in today?” And then she'd set a target. And let's say our target for the day was 2000 pounds and she'd write up 2000 on the flip chart. And then what we had to do every time we brought in a sale, was we had to go through this process where we sort of put the phone down, we filled in the order form, and then we had to walk our order form to the front of the room, to the sales manager's desk, put it in her tray, everyone will be applauding.
Paul Green:
And then walk up to the flip chart, cross out the figure and write in the new figure. So for example, if I'd sold a 500 pound advert and it says 2000 pounds on the flip chart, I walk to the front, I cross out 2000 and I write in 1500, because that's what we've got to achieve. And there was always a reward, of course, for hitting that target, it might have been something simple. I seem to remember, we consumed a lot of chips and chocolate just for hitting our daily targets, but it was really motivating. It motivated you to do anything you could do, to get today's target down. And we were working as a team so we were egging each other on. Right down to, if I didn't pick up the phone for 10 minutes, my colleague would lean over and say, “Oye. Greenie, pick up the phone. You're not going to sell adverts if you're just talking.”
Paul Green:
And that wasn't my boss, that was my colleague. So, that very public result was a good thing. Now, we did make a big elaborate thing of it. We made it funny, we made it a joke, but ultimately it was the team celebrating success. In your MSP, you could do a version of that. So, the days of ringing a bell or having a flip chart might be a little bit past you, but why not? Why not have that target up on a whiteboard or if you must be technical about it, okay, get a great big wide screen telly and do a software solution, but nothing really beats having a whiteboard or a flip chart and the ability for someone to actually go up and cross it off and just put, “Look, this is what we've achieved.”
Paul Green:
And I do think countdowns work better than count ups. If you set someone a target of generating 1000 pounds worth of extra monthly recurring revenue in a month, and they get to five days before the end of the month and they only need another 150 pounds of monthly recurring revenue, that can be very motivating for them to try their hardest, to get to that target. And you don't need to reward them for hitting that target, it's just a guide. Our brains are hardwired to achieve things when we see a target, and particularly when we're close to that target and we know we can do it. That's a very motivating thing. In fact, this will work well with your account managers as well. In fact, you could argue it could work even better with account managers, because all they've got to do is look after the clients really well and communicate with them well enough and ultimately they will bring in that monthly recurring revenue.
Paul Green:
So the first thing we talked about was getting the commission right. The second thing was having, if you like public results. The third thing is for them to have a sense of belonging of community. Now, the chances are, unless you're an enormous MSP, the chances are that if you do have a salesperson, they'll be the only salesperson in the business and they will feel lonely. They will feel separate, as friendly as they can be with the techs. And obviously, we're talking about when everyone's back in the office again, but it is a lonely job. In fact, sales is one of the loneliest jobs you can possibly have. So what can you do to help them be part of something? Can you involve them in the daily huddle? Now I know that's a technical thing, the daily huddle, when you talk to all of your engineers, but if you involved your salesperson, actually you could huddle with them as well.
Paul Green:
You can say, “Who are you seeing today? What are you expecting to have today?” And so the engineers get to learn what the salesperson's doing and vice versa. And that's great, because not only do the, through the power of osmosis, learn more about the actual real day-to-day technical challenges that your clients face, but they will respect each other's jobs. The engineers and your salesperson will come to respect what each other does. And they'll realise as well that they're symbiotic, they need each other. If they sell something, there's no one to deliver it, it falls over and if someone's not out there bringing new clients in, then that's no good for the engineers. So I think putting them together in a huddle every day and just generally getting your salesperson involved with the business is an absolutely critical thing to do. The more that they feel they'll belong, the better they'll perform because everyone wants to be part of something. We all want to be part of a winning team.
Voiceover:
Here's this week's clever idea.
Paul Green:
If you've ever found yourself wondering about this today, I have the answer for you. So you've got loads of clients and the vast majority of them, they're happy. They love what you do. They love your team. They love you. They're satisfied clients. And yet they never seem to refer other people to you. Why is that? Have you ever wondered that? Have you ever wondered of why you can have such happy clients and yet they don't refer other people on the whole? Well, you're not alone. It's not just you. In fact, it's not just the world of technology. This is a problem that all business owners have. You can have happy, delighted clients and the vast majority, most of the time simply will not refer someone else to you.
Paul Green:
And there's actually a very good book that explains why this happens and what the answer is. The book is called Unstoppable Referrals by Steve Gordon. And inside, he talks about why we don't do this, why we don't refer people. It's all down to the perception of social risk. So let's say I refer you to my friends. Let's say my friend, James. And I say, “Hey, James. You're looking for IT support. Well, I use this great company. They're called… Insert your name here. And I love them. They're just brilliant. Give them a call. There's nothing they can't do to help you. They're brilliant people.” And then James phones up your business and it just catches the wrong tech, answering the wrong phone at the wrong time.
Paul Green:
Hello? Oh, yeah. Hi. I was given your name and number by a friend. Right. Yeah. And so we're looking for the IT support company. Well, you need to talk to Dave. He's not in right now. Oh, right. Okay. Shall I just call him… Shall I just… Yes. Okay. Thanks. Bye.
Paul Green:
Oh, by the way, I'm sure that, that would never happen, never happen in your business. You'd never have a conversation like that. Side note, I once said that to a bunch of clients. I was in a room with and I said… We were talking about those kinds of bad conversations. And one of my clients said, “Ring my place right now and I bet you, they will be perfect.” And we did, we did ring this place and I pretended to be a prospect. And it wasn't quite that bad, but it certainly wasn't as good as he thought it was. In fact, that it's a great experience. He's getting someone to mystery shop you and just ring up your staff when you're not there, see what actually happens. Anyway, I digress.
Paul Green:
So imagine that, that was James' first contact with this business. Now he's obviously not going to do business. He's not going to phone back and speak to Dave because that was just a horrendous first experience for him when he's called that MSP. And the social risk of that is on me, because I recommended this company. He rang them up. It wasn't a great experience. I now carry the potential social risk of that. Well, at least that's how our brains work. And this is why we don't refer more people according to the book, Unstoppable Referrals. The other problem with referrals is people refer in the wrong way. So I might say to James, “Oh yeah, you've got to ring my mate, Dave. He's brilliant. He does all my IT. You can phone him on a Sunday evening at 10:00 PM because your home printer isn't working. Oh, he loves that. He's always happy to just drop everything and just come and fix your home printer.”
Paul Green:
Yeah. No one wants that kind of referral, thank you very much. So we want referrals from clients, but we want it done in the right way. We want some control over it and we want more of them. Steve Gordon, the author, has the answer and the answer is to put together something called a referral kit. Now a referral kit is something that you give to people in return for a referral. So you're asking your clients, “Please don't refer me and my business, offer people my referral kit.” You wouldn't use those exact words, but you might say, “Hey, I've written a book. It's a book about, say, email security.” In fact, I'm going to take an early blatant plug today and say, if you go to my MSP marketing edge service at mspmarketingedge.com, this is exactly what we do.
Paul Green:
We give our clients a book called Email Hijack, which is about email security, that they can put their name on the front, they can print it and then they can give it to their prospects or their clients who'll use it in exactly this circumstance. So you would say to your clients, “Hey, we've got a book to give away. Here's a business card that I've put together, which tells them what website address to go to, to get a copy of that book if you know any other business owners or managers who you think might need IT support or might just be interested in this. Would you give them my card please?” And then you give each of your clients 40 or 50 cards. So essentially you're not asking them to refer you, you're asking them to tell their friends about your book. And of course, when they come to get your book, they enter your data capture.
Paul Green:
They go through your data capture, they enter your CRM and they are now in your database. So you can email them, you can send printed stuff to them and most importantly, you can pick up the phone and you can call them because in some way, the referral effects still works. One of the reasons we like referrals is because when a friend says, “Hey, I use these people. They're good.” That takes a lot of the risk away. Doesn't it? It makes you a lot safer than if you've just found someone on Google for someone to recommend you. So if you can put this in place, this is one of the ways that you'll increase the number of referrals coming into your MSP.
Voiceover:
Paul's blatant plug.
Paul Green:
Yeah, you're right. I've already had my blatant plug this podcast, because I mentioned the MSP marketing edge. Okay. So let me tell you about something free then, that's actually going to benefit you. Once a month, I put on a live webinar. In fact, it's called the Live MSP Monthly Profit Booster. And we talk about a subject. It's all brand new content. So if you've seen my webinars or even listen to the podcast before, trust me, you have not seen the content that I put into these webinars. I write every single one from scratch, takes me two to three hours the week before, but it's good fun. And I do these webinars because it's great for giving you extra knowledge. And it's also a great way for me to build up a relationship with hundreds of different MSPs in one hour, which is a great thing to do. Now, the last one was actually yesterday, and we talked about why you need to have a telephone person. I was mentioning earlier, wasn't I? That it's critical to have someone phoning those new prospects.
Paul Green:
So we talked about whether or not you should do it yourself or whether you should outsource it. We talked about how to find someone, the best kind of person that does the job. In fact, we talked about why you don't want someone with telesales experience. We talked about who they should call, what they should never say, what they should say, the best way to pay them and I'll give you a clue on that one, it was nothing to do with commission, and a whole load of other stuff that make a real difference because I've hired loads and loads and loads of telephone people over my career.
Paul Green:
Most of them have been bad and got fired, but we've also found some crackers along the way. And I shared all of that knowledge. So if you want to see when the next live webinar is coming up, it will be in a roundabout a month's time, just go into my website. It's paulgreensmspmarketing.com/webinar. You will see the title of the next webinar coming up and you'll see when it is and you can register for it there. It's completely free, it's brand new content, and I would love to see you on that next webinar in March.
Voiceover:
The big interview.
Jay McBain:
Hi there, I'm Jay McBain from Forrester research. I've been in the channel for 26 years. Been close to the managed services market for close to 20. Really appreciate joining.
Paul Green:
And I really appreciate having you on the show, Jay. I've been following you around LinkedIn and on your blog and just seeing you around the channel for such a long time now. And it's absolutely great to get you on the show. So 2020 was an enormous year for MSPs. What do you think 2021 has got in store?
Jay McBain:
Yeah. If you look back on the history of the managed services market, the electric growth that over the last 20 years, what we started to find though, it was hitting a little bit of a plateau. We got to the point where somewhere between 21% and 23% of customers were outsourcing some or all of their IT, right across SMB mid-market and enterprise. And for the last five years with that plateau, we found obviously more price compression. We've obviously been driven by more consolidation and private equity. As a industry matures like this one has, we were starting to see some elements that are predictable based on other maturing industries.
Jay McBain:
Well, 2020 in the pandemic that changed this trajectory. What was then single digit growth going into 2020, almost 9.7% growth, now reignited into double digit growth. As everyone went home, as a new topology was being rolled out, not client server, not multi-cloud hybrid cloud, but a new remote, almost residential level topology, more than 21% or 23% of customers threw up their hands and said, “I can't manage it. I can't manage it from a security perspective. I can't manage it from a basic infrastructure perspective.” And to get laptops at home, to get them secure, to get them compliant, and obviously to get these really important employees productive, managed services took a lot of that benefit and that takes us into 2021.
Paul Green:
I realise asking someone to make a prediction about what could happen in the year is very, very difficult, but obviously you're very well placed to do that because you do have access to huge amounts of research and this is your life. Your life is looking at what's happening in our world and making predictions about what you think could happen. So how do you think that's going to change as we go throughout this year and maybe even next year?
Jay McBain:
Absolutely. So I tend to look ahead 18 months, and that's about a safe place for futurists to still be somewhat accurate, beyond that no one knows. The fact is, is the next 18 months we get to talk to 690,000 of those customers every year. And so during the pandemic, during pandemonium, during murder hornets, we were asking a lot of questions. And the key thing is this, out of the hundreds and hundreds of different categories of technology that they would consider spending money on, we stack rank the top. Automation is the number one area of interest. We know that cloud acceleration is number two. You're watching Azure grow by 48 and then 47% year on year, inside the pandemic. You're watching Google Cloud at 45. You're watching the SAS companies, the Salesforce, the ServiceNow, the Workdays, the Marketos, the NetSuites, all grow by 30, where computer infrastructure is down by 60. Telco infrastructure is down by the same. Traditional tech consulting and system integration work is down by 50. Managed services is down by 1.9.
Jay McBain:
So it's kind of straddling both. This is the opportunity in the future is to look at automation, look at cloud acceleration. And then number three, is this remote topology. Obviously, there was a rush to get people laptops. There was a rush to get people UCAS. There was obviously some quick work that needed to be done. But now a year later, we're going to be looking at bringing in some governance, bringing in some actual enterprise class management and monitoring of all of that new topology. And we know today, that upwards of 30% of white collar knowledge workers have a very different future of work. We're not just going to snap back to where we were going into 2020. This is going to be a very different future of work. And it all plays into the wheelhouse of managed service providers.
Paul Green:
Yes, it does. It's very exciting. And this is one of the things that appealed to me about this market is this constant change. And the world of the channel and MSP seems to be reinvented every six to seven years or so. And you've obviously been in the channel much longer than I have. And I guess you've seen, what this must be your fourth, fifth, sixth iteration of change?
Jay McBain:
It definitely has. And this is an exciting one because managed service providers get to… Obviously, on one hand, be that IT department making the decisions and really steering the future of technology. At the second part of that is that major vendors that would have been making up most of the client server era. Companies like HP, HPE, IBM, Dell, Cisco have announced that they're going to 100% subscription. As a reseller or VaR, that's a big risk to the business because there is no transaction anymore. It is only the first 30 days with the customer. Where managed service providers, the way they run their business, and obviously, the P&L and the balance sheet and everything else, will be able to absorb these changes that big vendors are moving into and actually apply them and help those vendors be successful. And so as the world, the 175,000 software companies, the 800,000 emerging tech companies, and all of the big vendors start to move into this model, they're moving closer to managed services and managed service providers get to take the lead.
Paul Green:
So if you owned an MSP yourself, Jay, what would you be doing over the next 18 months to take advantage of this?
Jay McBain:
Well, there's a couple of things I would do. The first is customer obsession. I'm focused as an MSP on a particular type of buyer. I'm focused on a particular sub-industry, particular geography, sector segment, or size of the market. I'm focused on a specific product set and there's over 200 categories of products, I'm not focused on them all. So I got to look at those five vectors. Look at my customers and then look at the opportunity. So I want to go and win in my region, in my industry, at my buyer. I want to go win 80% of that market and then maybe move adjacently and start to build on that business. And maybe there's multiple areas as MSPs get bigger.
Jay McBain:
There might be two, three, five, 10 areas that you want to go win 80% of. But the second thing I would do after obviously customer obsession, is getting obsessed on their behaviour, their psychology, their thinking over the next 18 months. When I just rhymed off automation and cloud acceleration and remote topology, when those customers are rethinking their own customer experience, when every company in every industry is becoming a technology company, when 76% of the world's CEOs, according to Accenture, think that their current business model will be unrecognisable in five years.
Jay McBain:
And ecosystems are the number one reason why. When all of these things are happening with my customers, I have a really unique opportunity from a business perspective to go in and lead that change. That's where I would look at where things are going. Make sure that an automation that I'm starting to dabble in RPA, robotic process automation, that I know how to do the no-code/low-code environments within SAS tools that I'm supporting today to go and capture that revenue. The last thing I'm going to say is big vendors now are coming out with what I call multipliers. They're getting better at understanding the long-term value for every dollar they sell into the market. If you're partnered with Salesforce, it's $4.65. If you're partnered with Google Cloud, it's $5.32, and on and on and on. Microsoft, somewhere between $5 and $9 for every one of their product lines.
Jay McBain:
So I would get very connected to that research and look inside the numbers, because 64% of that multiplier is professional services. The implementation, the integration, the security, the compliance, the business continuity, all the things that come downstream for every dollar of product that a customer buys. Again, I may or may not sell that product depending on what my own preferences are as an MSP. But the fact of the matter is if I understand that $5, if I understand that 64% of it, now I've got the right skills, I've got the right practices, I'm speaking the right language, and I'm speaking to the right buyers. I want to go win $2 for every $1 of Microsoft and my customer buys or Google or AWS or whatever they're buying. I want to go earn $2 for every one of my vendors dollars. And I want to do that at 75% margin. We're not talking $113 per month per device or per person, we're talking, taking advantage of the downstream opportunity that sits in the ecosystem.
Paul Green:
This is great stuff. It really is. Thank you, Jay. Final question for you just before we started recording today, you were hitting me with some stats and you seem to have all these figures floating around in your head that give us an idea of our world and what's happening in our world. Can you give us some of your favourite stats for right now, please?
Jay McBain:
Oh, wow. I got, in an analyst side, I live on numbers. And I'm watching all of the different numbers for MSPs. And I talk about going from single digit to double digit growth and how this is an inflection point, watching where customers are buying. For me, my favourite stat is watching the success of 50,000 managed service providers around the world, is watching them today, go from an average of eight people, each delivery and about $200,000 of value into the marketplace to 10 to 12 to 16 people watching these companies grow and watching this industry, not only be essential as defined by the government, but be absolutely critical for every one of those 76% of CEOs in the world, in every industry that think their current business model will be unrecognisable. That for me is the biggest number I watch every day.
Paul Green:
Thank you, Jay. Tell us how we can learn a little bit more about Forrester research and get in touch with you.
Jay McBain:
Sure. I'm all over the place. If you want to just link in with me, I can give you the research or point you to where these numbers are and help you perhaps with your business. I'm on Twitter, I'm on Facebook, [email protected]. Pretty well anywhere.
Voiceover:
Paul Green's MSP Marketing Podcast. This week's recommended book.
Mark Edwards:
Hi, I'm Mark Edwards of Whiteboard Strategies. We help organisations, MSPs and tech vendors to develop their propositions and deliver them either whiteboards or using virtual meeting platform like Zoom or Teams. My book recommendation is by Nassim Nicholas Taleb. He started his Incerto back in 2007 with The Black Swan. But the book I want to recommend here is called Skin in the Game. It's a very powerful tome where he basically expresses throughout history, the difference between people in their thinking, in their decision-making and in their behaviours, when they actually have skin in the game. And for those of you who own businesses like myself, I think you'll find it particularly relevant.
Voiceover:
How to contribute to the show.
Paul Green:
If you've got a book suggestion for me, or you just want to give me some feedback about the show, good or bad, it's easy peasy lemon squeezy. You just drop me an email, [email protected].
Voiceover:
Coming up next week.
John Vuong:
And what you want to do is be served up high on the first page on the ranking so that you get more traction, more clicks.
Paul Green:
That's John Vuong, he's an SEO expert. And on the show next week, he's going to talk to us about the dark arts of SEO. What should your MSP be doing on your website and off your website to get a higher search position in organic Google results. We've also got a competition next week. Now, do you remember last week I interviewed a lovely lady, Brenna from todoist.com, which is the productivity software. Well, she emailed me some free Todoist codes.
Paul Green:
So we've got six months of Todoist premium to give away to three lucky winners. And I'll tell you next week, how you can win one of those. We'll also be talking about sales meetings and how you can stack the odds in your favour. What's something that you could send to a prospect before a sales meeting, whether it's in real life or over Zoom, and what's something that you can send to them afterwards. Get these two things right and you will increase the conversion of your sales meetings. In fact, it's something I did in a business I owned a few years ago. We improved our conversion rate from one in three to two in three, just by implementing these two things. I'll tell you exactly what we did and how you can do it in your MSP. It's coming up on next week's podcast. See you then.
Voiceover:
Made in the UK for MSPs around the world. Paul Green's MSP Marketing Podcast.
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