Here at Managed Sales Pros, we are successful when your MSP is successful.  We strive to provide you with the best quality sales appointments possible so that you can increase your top line revenue.

However, sales is just one part of an extremely complex puzzle for MSPs, and we can’t be experts at everything.  This month we have asked experts in other areas to share content that is not sales related, but is very important for the success of an MSP.

Previously, we asked Raj Goel from Brainlink to share on the importance of Standard Operating Procedures.

This week, Denes Purnhauser from Reframe Your Clients shares on the importance of offering your client base a Virtual CIO service, and identifies the 12 pitfalls you need to avoid when offering your clients vCIO.  Please let us know if you would like to see more content from Denes, or any other guest author featured on our site.

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12 Mistakes Most MSPs Make With Their vCIO Services

-Denes Purnhauser, CEO, Reframe Your Clients

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The phenomenon of virtual CIO is not new, however, the promises of the role have not been implemented well across the industry. Some mature MSPs state they have a vCIO practice, but if we look closely they have challenges with profitability, delivery and scalability.

 

We could spend hours trying to identify the root of these problems, but instead we’ll highlight the twelve most common areas MSPs go wrong with vCIO. At the end of this article, there is a poll where you can measure yourself against other MSPs.

 

vCIO Strategy and Transformation Planning:

Mistake #1. Packaging the MSP and vCIO contracts together

 

Selling the vCIO with the MSP contract means: “virtual CIO of the IT infrastructure.” There are two major flaws here.

 

First, the vCIO capacity does not scale with the size of the organization at all, like other MSP-related services do. It scales up with the complexity, change and developments of the clients. That means ball parking a user-based price for a virtual CIO cannot be accurate. It could be too high, so they do not buy it, or could be too low, so they do not make money.

 

Second, creating a solid offer on virtual CIO means time capacity for a very expensive resource. That makes the MSP offering more expensive than the competition. For the client, the results and benefits of the “vCIO of the infrastructure” do not make much sense. Customers are comparing prices between competing MSPs thinking it’s apples-to-apples but rarely are the service offerings the same.

 

Virtual CIO can give you a major competitive advantage so it should be a separate service offering with a distinct pricing strategy.

 

Mistake #2. Not creating the necessary budget to get results

 

Let’s say we have a 50 seat “sweet spot” client. The needed virtual CIO core services like: yearly, quarterly, monthly and weekly cycles. This could eat up 70-170 hours easily with automation. (We refer to the virtual CIO here as a general virtual CIO taking care of every IT-related business aspect: reporting, management systems, applications, budget, vendor management and so on.) If you use a base $150 hourly rate it could reach $2.000 service price per month or $40/user. Your MSP contract just does not contain that much for that reason.

 

Again, if you are not able to create the necessary budget for the monthly recurring service fee and communicate the value, either you do not make money or cannot sell the service.

 

The other problem is general: because you do not have the necessary processes or approach for that, and you cannot burn that much time, you just under deliver on your promise of virtual CIO. This ruins the concept and the possible outcomes of the service for the future.

 

Mistake #3. Not using a framework to develop the system

 

99% of the MSPs we have been fortunate to talk to just do not use any framework for their virtual-CIO-related activities. That means they just don’t have a system. They operate as “consultants” or high-level managerial resources for infrastructure-like projects.

 

First of all, that means they are not able to implement a standardized IT management structure with proper plans, documents or databases aligning the whole IT ecosystem. Secondly they are not able to streamline communication of the duties, tasks, deliverables and responsibilities of the virtual CIO correctly. This makes it hard to set the right expectation of the role to the client.

 

Demand Generation

 

Mistake #4. Not attracting the right audience

 

Demand generation needs to target the right audience. The virtual CIO job is best suited for companies with 50-150 office workers. If the MSP wants to target a 20-30 or even a ten-seat client, there will be a painful realization of the lack of interest and the lack of financial background. In the higher tiers, they must figure out some system for managing IT. We can go there, but with coaching and support, to compliment the CIO or the IT manager.

 

Mistake #5. The wrong content

 

The partner of the virtual CIO is not an office manager, not the CFO or COO. The partner of the virtual CIO is the president/director/CEO; the top-level manager of the company. We know it is a challenge to position the role that high for the average technology-oriented service provider, like most MSPs, but it needs to be done.

 

Most CEOs are not interested in backups, new MS Office versions or the cloud in general. They spend the whole day about increasing cash flow, boosting sales, organizing their companies, servicing their clients, developing the management team and so on. The MSPs marketing content has to reflect those problems and turn those problems into solutions supported by IT.

 

This content has to be consistent across website, emails, blogs, calls-to-action, in lead nurturing drip email campaigns, in LinkedIn and other social media communications and in marketing collaterals ebooks, guides and white papers.

 

Mistake #6. No clearly defined buyer’s journey

 

The buyer’s journey covers the process that a prospect goes through, from the first touch of content to becoming and remaining a customer.

Most MSPs have a decent website with a blog. 95% of the blogs lack a call to action. So no next steps for the prospective customer like downloading an e-book on the relevant topic. These websites talk about services instead of highlighting vision, possibilities or opportunities. The sales meetings are wired not to serve the clients and create instant value, but to “qualify” them and check our opportunities instead of theirs.

That means the buyer’s journey is not designed well. Without that they do not attract the right buyers (the CEO) to the website and make them feel sure that they will find the opportunities they are looking for there. The content needs to attract, engage and delight the prospect so they are eager to initiate contact and get a demo or a meeting with the MSP.

 

Sales

 

Mistake #7. Not using consultative sales

Consultative sales is all about solution selling. In solution selling we do not have a particular approach regarding “what to sell” to the client. However, we have a process to ask the thought-provoking questions to drive the conversation to lost opportunities and possible benefits. It is a process of discovering their opportunities in the context of business opportunities with the MSP’s solutions being able tohelp them to achieve that goal.

 

Virtual CIO is not a boxed product with just price and start. Deep understanding of a customer’s business is required before the solutions can be presented. Selling without context and understanding will put the virtual CIO in a very ineffective position, making it difficult to manage expectations.

 

This method is slower and takes more time, but it is necessary for engaging the client and crafting the offering in their business context. However solving business problems and supporting them with technology solutions will mean more, higher value sales.

 

Mistake #8. Not selling the vision with stories

 

The virtual CIO’s purpose is to make the customers business more competitive in its marketplace using technology to drive more revenue, cut costs and maximize the business continuity.

 

These general terms have to be in the context of the client and industry. Without selling the vision and competitiveness: being a better company, producing more revenue, and beating the competition, we cannot really engage the client.

To sell the vision we have to craft compelling stories that grab the imagination of the CEOs.

 

Mistake #9. Not confronting reality with numbers

 

The reality of the situation sets the tension of the proposition. This tension help make the buying decision. The reality is always hard, data of the current state of maturity, people, systems and business facts.

The score has to be quick and easy to create and understand so as to be compelling. That is why a business IT questionnaire that measures a companies competitiveness with IT is a must. Without it, the vision will be there, but without quantifiable difficulties to achieve it.

 

Imagine this: running a marathon is a vision, and a full physical examination would be a reality check. It makes it clear how hard you have to train and the time frame for accomplishing your goal. Ask your local trainer how much of a game-changer a fitness examination is in terms of the success rate of running the marathon instead of just dreaming about it.

 

Delivery

 

Mistake #10. Not using vCIO tools like automation or collaboration

 

Most MSPs are trying to use their existing PSA solutions like Connectwise or Autotask to manage the virtual CIO activities. It just does not work, period. (Again, the MSP 2.0 virtual CIO does not just focus on the infrastructure.

The virtual CIO has to manage people, processes and systems while communicating to the team, the vendors and the customers. Most virtual CIOs do not have an integrated approach to managing all their activities in one place.

In addition they need a system in which they can store all the IT management-related documents, memos, projects, databases, plans, budgets, and so on. Missing an integrated platform eats up a lot of valuable time for the virtual CIO.

 

Mistake #11. No clear differentiation between ongoing and project activities

 

Just as maintenance teams are separate from project teams because of utilizations, focus, experience reasons, so should the virtual CIO team.

One virtual CIO role has to manage the core virtual CIO cycles, like yearly planning, quarterly activities, monthly follow-ups, reports, weekly meetings, and so on. An average virtual CIO could manage 10-18 clients, depending on the complexity of that focus.

 

The other virtual CIO has to manage the individual projects separately. It needs a different personality, different skills, tools and different daily and weekly routines.

 

Mistake #12. IT-related service instead of business-related service

 

In a quarterly session, the questions should be around the client’s cash flow, marketing initiatives, sales performance, internal projects, and competitor’s moves first. Second, it has to be a session with reports on the execution of the IT strategy, the quarterly plan, and the plans for the next quarter.

 

It should not be focused on the technology roadmap or IT-related issues, problems, and challenges. It has to be focused on the business, processes, numbers, and business terms.

 

This can be hard as there are so many cool IT projects an MSP can propose to a customer, however the conversation needs to be about the business benefits and business accomplishments.

 

A successful CRM project is a great example. It highlights the improvements on sales collaboration, alignment, processes and results, instead of talking about the features of the technology solution.

 

Summary

 

Please check these possible flaws in your practice. To improve on those, we strongly suggest signing up for the MSP 2.0 Quickstarter Tool. It has the tools to market and deliver the virtual CIO role right. If you would like to know more about the modern vCIO approach, check this page.