Looking in to the Crystal Ball…
Welcome to 2016.
Everyone’s got some predictions this year.
You can check out some of them here:
MSPMentor
ChannelEyes
Channel E2E
The Var Guy
Datto
So, I’m going to hop on the bandwagon here. Let’s talk trends for 2016. And I’m not going to talk IoT, wearables, or the cloud. I want to talk about the elephant in the room.
The writing is on the wall, guys. The market is about to eat you alive. The big players are getting even bigger, they’ve got their shit together, and they’re about to begin taking advantage of their economies of scale to scoop up your clients. They’re going to advertise, they’re going to use all the fancy marketing tools that big companies use, and they’re going to get even bigger. Then, they’re going to start charging less than you do – they can do that and still maintain their margins. They’re going to be Wal-Mart, and you’re going to be that store that went out of business when Wal-Mart opened up shop across the street.
That’s MY prediction. Pretty grim, huh?
But wait! All is not lost! It doesn’t have to end like this.
Client retention – and the right client base – is going to save you. Now is the time when you need to become the type of business the boutique customer wants to work with. There are ALWAYS going to be people who shop at Wal-Mart. And there will always be customers who forfeit cost savings because they like to be greeted by name when they walk into a shop. They want a boutique experience, and they will pay a premium for it. Find those customers, sign those customers and KEEP those customers, and you’ll do just fine as the market continues to amalgamate. Make your relationships with your new premium clients completely poach-proof, so when BIG LESS EXPENSIVE FANCY LOGO MSP comes a-knocking (and I know they’re coming knocking, because we’re doing some of the knocking for them) your clients quickly say “Thanks, but no thanks!”
Here at Managed Sales Pros we make thousands of calls into the market every day, and we know exactly how to drive a wedge between a client and a solution provider. It’s why MSPs hire us, and we get better at it every day. More often than not, any company we call for a client will already be engaged with a solution provider, and it’s our job to create doubt and position OUR client, not their current provider, as the best option for that prospect.
So how do you ensure that when BIG MSP (or Managed Sales Pros or any other competitor) calls on YOUR clients, your clients don’t give us the time of day? Let me tell you what we do on our calls to displace incumbent service providers. None of it is proprietary, or even sneaky — it’s just prospecting 101. You can do it too, and you can protect your client base from poachers by being proactive.
1. Provide an Exceptional On-boarding Experience
The foundation for your relationship is built in the on-board. Mess up at this critical juncture and your client will never 100% trust you. You can’t recover. And when I call into that client 6 months in to your engagement for one of your competitors, I’ll begin gently reminding them of all the mistakes you made. Better to lose the deal being honest about a timeline you can’t commit to than lose the client quickly after they are bitter and you’ve done a lot of work. The MSP model is only profitable if you can keep your clients long term.
2. Check in Regularly
Dig in with your clients to find and solve the problems they aren’t telling you about. MSP clients become hugely profitable after the 3 year mark, and most of your clients start shopping around in year 2. I know this because my team is scooping them up and that’s where they become most willing to talk. We build entire campaigns around contract end dates, and that’s where the rubber hits the road. More than 50% of these clients were counting down the days to the end of their agreements, waiting for their opportunity to leave their current provider without a financial penalty. The others aren’t necessarily unhappy, but they aren’t delighted, either. We’ll create just enough doubt for them to agree to meet with your competitor. No news isn’t good news. How are you engaging with and delighting your clients?
3. Make it Right
You’re going to make mistakes. Things happen. Own it, apologize; and make it right. Maybe you’re going to have to give them some money back or make some other concession. Do it. Don’t be pound foolish. The lifetime value of this MSP contract is worth a free month here and free site visit there. Think long term, and don’t necessarily think “How would I want to be treated in this situation?” You’re not your client. Ask them what would make it right. Resentments live a long time, and they fester. That thing you thought they forgot about? They didn’t. They told me all about it when I called them. I’ll spin it just right and rip that band-aid right off. Do you want that mistake costing you a renewal? Make it right even if it stings.
4. Provide a Level of Service that Your Competitors Can’t or Won’t
And charge accordingly. Be the Ritz Carlton, not the Residence Inn. Automate less, personalize more. Don’t send your premium clients to an off-shore call center answering service or into voicemail no-man’s-land – have someone who can resolve the issue answer the phone and fix the problem right now. Proactively evaluate their networks and provide suggestions. Show them what their business means to you. Meet with them quarterly to review and plan. Work with them to create a five year plan for their business. Provide proprietary tools they will use daily, so that working with you is going to be critical to their long-term success. Make them feel so confident in their relationship with you that when we call them, they tell us to take a hike.
Delighted clients don’t make price decisions, and they don’t talk to competitors. When a client is unhappy, every time your bill comes they will hate you a little more and question the value you provide. When they are happy? They don’t even look at the invoice, they just forward it right to accounting. That’s the relationship you want to have with your clients when BIG MSP comes in to your town guns-a-blazing. And mark my words, channel: they’re coming.