If you're an MSP unsure of the value of marketing or you're just hoping to learn more about it, you may want to look into Robin Robins. Robin is a marketing consultant, sales trainer, and author who works with MSPs, VARs and Solution Providers to implement scalable and profitable marketing programs that drives sales and growth. Many of our own MSP partners swear by her Technology Marketing Toolkit. Last week, I attended her Tele-Seminar, "The 4 "Decisions That Will Transform Your IT Services Business Into A Fast-Growing, Extremely Profitable, Self-Managing Company." In it, Robin was joined by Verne Harnish, the "Growth Guy" columnist and founder of the world-renowned Entrepreneurs' Organization (EO). The two engaged in an animated discussion about how MSPs can scale up their businesses.
Are you taking proactive steps to ensure you're managed IT services business has a profitable future? Here are my 5 takeaways from the call.
1. Hire Potential, Grow Talent
"but no one is good enough."
Is there a war for talent? Robin often hears about your MSP peers' struggles to find, hire, afford, manage, and motivate the best of the best. How do you retain and incentivize IT talent? Well, stop right there. We need to examine how you define IT talent, first. Are you expecting your next hire to waltz into your company and know exactly what to do without any guidance from you? You're right to think the right team will help grow your business. You can't deliver great service without great people. What most of you get wrong, however, is that you equate talent with needing little to no direction. If you think you don't have enough time to train new employees, you're missing the mark.
Guide Your Staff
Relax your standards and know that IT talent is developed, not ready-made upon delivery. Are you mentoring your IT staff? You don't have to hire the valedictorian from MIT, but rather someone adaptable with the right attitude and skill level, who's willing to learn. Robin mentioned a common complaint among IT technicians is not receiving recognition from their managers. How can you expect a plant to grow if you don't water it? The same applies to your staff. Teach them what good service means. Educate them about the prospects your business is targeting. Then, evaluate their progress, remembering to recognize stellar performance. They'll evolve into the cream of the crop you envisioned upon hire.
2. Adopt a Scrum Approach to Work and Personnel Management
"I don't have the time or the budget!"Think about the last time you suffered through a meaningless one hour meeting. Time is a precious commodity for your business. Can you or your employees afford to waste it? When asked what the biggest detriment to growth was, respondents replied "people and time payments." You want to maximize the ROI of your staff and time. One way to kill these two expensive birds with one stone is by incorporating "scrum" into your daily processes.
"Overhead Walks on Two Legs"
A scrum approach to work and personnel management is one based on efficiency. Often, the work of 10 can be done by 5, when those 5 are managing their time more strategically. Rather than meet an hour every week for status updates, take the majority of this "offline." Temperature checks and check-ins are still valuable, but by streamlining your operations, you can get more done in less time, with less people! Cut costs by better allocating your employees and their time.
3. Build Your Business Based on Marketing Strategy
"I don't know where to start with marketing!"
Marketing strategy is the foundation for all successful businesses. If you've already launched your MSP business, chances are you thought about who you were going to sell to or what differentiated your business from your competitors'. Robin described how MSPs often view marketing as something they can do later on...if they have the time. Marketing strategy can't be optional when it "dictates what [and how] you deliver, manufacture, and sell."
What questions did you ask yourself when forming your managed IT services company? Did you think about which market was being under served or what you could offer the market to solve a problem so convincing they'd pay you for it? This is marketing at its core! Robin summed it up best when she stated, "Marketing is not a department. It's the fundamental that you base your business on."
How Do You Master the Art of MSP Marketing?
Repetition. Repetition. Repetition. Your marketing strategy has to become a part of your weekly routine. Constantly ask yourself how you are enabling sales. Are you expecting customers to come to you or are you actively nurturing prospects, testing what is and isn't working?
Secondly, market selectively. Verne recommended targeting the top 7% of businesses, not the "low hanging fruit." Apple (ever heard of them?), for example, only had 7% of the market share at one time, but that fraction of the pie represented 50% of the total profitability of the industry! Less is often more. You don't need more customers. You need better clients.
4. Execute to Turn Revenue into Profit
"When should I expect results? How will I know it's working?"
Lather, rinse, repeat. Your sales and marketing efforts are effective when you can constantly deliver on promises. You have to keep at it if you want to scale up your MSP business. Verne claimed that the difference between a good and great company, the success benchmark to apply to your own definition of success, is "3X the industry average for profitability." This is achieved through solid execution. The key is adopting several specific routines that can be completed in a few hours per week. These routines should be productive, profitable, and growth-oriented. This is where Robin Robins' Technology Marketing Toolkit comes in.
5. Charge Enough to Have Enough Profitability to Reinvest in Your Company
"What if I'm not making enough of a profit?"
So you've tried to introduce daily marketing routines, but you don't think they're paying off. They won't until you're profitable first. If you try to bring in new customers, "you're gonna make the problem worse." The solution? Charge more. It may seem like you're the only one who'll benefit or that you'll receive push back, but in the end, you "have to charge enough to do right by your customers." In short, profitability is credibility.
How Do You Balance Investing in Business vs. Debt and Cash Flow?
Verne reminded listeners that profit does not equal a paycheck. Rather, you need to sort out your accounting so that the amount left over before you pay yourself isn't your profit. You must not sacrifice profitability in order to make investments. Then, you enter a cash flow crisis. What's one way to ensure your business is more profitable? Offer calendar-based contracts rather than completion-based contracts. A business model based off of monthly recurring revenue (MRR) is another simple way to scale up your managed IT services.
Well, there you have it! It is possible to scale your business up, while scaling expenses back. Marketing is essential for all businesses and doesn't have to be a huge undertaking. If you're serious about growing your MSP business and getting more clients, you should consider working with Robin Robins and her Technology Marketing Toolkit. She doesn't just understand marketing, but the IT market you're all players in and what it means for your bottom line.
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