EP276 - Why Most MSPs Are Sitting on Easy Money -Breakfix Edition with Ian Luckett

IAN: In this episode of The IT Experts Podcast, we share with you why most MSPs are sitting on easy money.

INTRO: Welcome to The IT Experts Podcast, the only podcast to help MSPs scale to 1 million, and if already there, get to five and go faster. At the end of the day, isn't it all about building a business that works for you rather than you for it? I hope you enjoy the show.

IAN: So good morning, good afternoon, good evening. Welcome to The IT Experts Podcast. This is a little bit of a break fix edition here. It might be a little bit longer than the normal 10 minutes, but we just hear so many times and we get so many great results inside the Growth Hub of helping our clients uncover the opportunity of really good account management, but sometimes people just want to know, Ian, tell me what I need to do. And that is exactly what we are going to do. What I'm going to do for you today is going to give you a jab in the ribs, a poke in the eye, whatever you want to receive it into the top 10 things you need to do to extract some money straight from your clients, straight off the bat.

Now the problems that normally happen when people think about this type of thing is that there's a fear of upsetting their clients. You know, with a commercial conversation, you've had a really good technical relationship with these people so far. Your clients so far, and all of a sudden you're now talking about money. Well, you know, we can overcome that because it needs to be really around a conversation around how you can add value to them. You know, some people sort of think they're going to come across as being salesy, rather that trusted advisor. You know, are you all of a sudden going to start getting a contract out and start hitting me with that? I don't really want to open up those conversations. One of the other worries we, we also see is the fact that, you might think they're going to say, no, I don't want to improve my IT landscape and update this new antivirus or put in this new system or bring in some AI or whatever and they might kind of shop around. And also it's like you don't really know kind of like what's inside these individual accounts. The upshot is, there's easy revenue left on the table, and we were only just talking to one of our brand new clients who's great. He hasn't even been in two and a half months yet, and they have uncovered 100 a thousand pounds monthly recurring revenue that was just sitting there because they never kind of knew the process that they needed to go through.

Now, that's not clickbait, that's following a process, that's having that structure, that's being disciplined and accountable to kind of show up and do exactly what you need to do with everybody on this call. If you're an ambitious MSP have got the exact opportunity to do just that. You know, you might have some clients where they're buying services elsewhere. You know, hopefully you've got everything, you know, the Microsoft stack's all coming from you, but they might be buying some other bits and pieces elsewhere. You've got flat and shrinking margins, if you are not putting up your prices, having proper account management conversations with your client, you know, you'd be running a pretty irresponsible MSP because you know, as a business owner, as a director, you are legally obliged to make a profit. That's kind of the whole point of being in business. So we need to make sure that we've got that all in place. Some people also worry about the fact that, you know, it is all a bit reactive. We're not a strategic partner. We'll become a strategic partner because if you don't become a strategic partner of your clients, somebody else will believe you, me. And, you know, the last thing really in this bit is that, is it's all around, you know, is it going to be burning out from volume LED growth. You know, you are just hunting and hunting and hunting. You know, small numbers of people, small numbers of seats within an MSP or it could be large, you know, high volume, but low profit margin.

You know, we had one client came through the Growth Hub and he was turning about 2.2 million pound 35 clients. Wouldn't you love a business like that? The reason that that was the case he was super deliberate on who his target market was. We've talked about it before. We've bleeded on about it before. We've moaned about it before. And it's all around that whole niching thing.

So if you need to get money, have quick growth, you know, put up with, you know, some of the, things that been pressed on us from Rachel in accounts, we need to make sure that we are always on top of this. This is the golden goose, as Stuart says, that keeps on giving all of the time. Clients already paying you already. You don't have to do any marketing. You know, and let's just go through these 10 steps, right? Let's just cut to the chase, right?

Number one, action number one. Make a list of every single client that you've got, okay? Put them in a list. There's no assumptions, there's no favorites. You can't grow what you don't know, right? So we start to review these and making sure that you know who they are and kind of can grade them into an A, B, and a C client. You know, make sure, obviously you are looking at your MSP clients. All of the project work is amazing. It's part of the MSP model, but it's not going to grow monthly recurring revenue and transferable value. It will help you get over a bit of a hump in the cash flow, but we need to make sure we're looking at those MSPs.

So action two, whitespace selling. Let's review exactly what each current, each client currently buys. What do they actually pay for? What's your margin on this service, you know, what services do you have that they don't have, you know, and are there any obvious gaps? That's, you know, might seem a little bit obvious, but this is, you know, it's a reminder and if you're thinking about it, then if you're doing it or you are just ticking your box, go to the next section.

Action three. Do an audit on their security, their business risk. Right, let's just pause there for a second, business risk. Let's make sure we're having proper risk conversations with your prospects and about how your IT can help them overcome and mitigate those risks. I was talking to someone recently. You know who you are because I know you listened to the podcast. Thank you very much, my friend, who has had some amazing results on going in, doing the risk register with his clients and his prospects, and then assigning the risks to various people in their organisation and by Christ, people do not like it, risks being assigned to them. There's be more on that podcast as and when it comes, but we need to be having a proper risk conversation exposing the gaps. Is it in the backup, the MFA compliance? Are users just kind of like sprawling around doing whatever they want? Where's the vulnerabilities? You know, where's the bits that the clients can't fix and the risks that they don't see? Most important, we really understand what that looks like.

Action four. Let's do some pricing hygiene with legacy contracts. You know. Lots of people don't like putting their prices up. You need to put your prices up to stay ahead of the game, even if it's just through inflation, because guess what? Your vendors are going to be doing the same. So when was the last time your pricing was reviewed? Are you undercharging your long-term clients? You know, you don't have to smash in with a wall, you know, with a hat, with a sledgehammer and go, I've got to put your fee up three times over in, you know, this period. Do it gently, but explain to them about how the business models work and explain the value that you are adding the additional services, how much they cost. So once you have that conversation, guess what happens? The rapport gets reinstated, you rebuild that rapport and they see that the value you are getting, and then all of a sudden you then start to get, you know, in a bit of a stronger position in terms of that profitability. Old agreements, if you haven't put your prices up, you're not making any money, and you'd actually be better off without those clients working for you, working with you, to be honest with you.

STUART INTERRUPT: Hold that thought for a moment. Ian, it's Stuart here. I just got a quick pit stop here for everyone that could really move the needle. If growing your MSP is on your radar, but it feels somehow a bit foggy, a bit difficult to get your arms round the concept, then download our ultimate MSP growth guide because it lays out all of the best support options that are out there in the channel so you can fast track what really works for you and make a clear decision. Alternatively, you may be the kind of person that likes to see things up real for yourself in action physically. So why not come to one of our events where you can do exactly that? And we'd love to meet you, so there's just a head up for you down in the show notes that you'll find the links to be able to take the next step. But otherwise, let's get back to the good stuff and back to the show.

IAN: Cheers.

Action five. Let's look at some quick blend. Have we got license optimisation? You know, a lot of people talking about AI readiness right now. You know, security bundles, small, changing that, small changes that can add fast value really quickly, but low friction. So start off with some of the clients, you know, are just going to, they know that the prices are going up or they know that they need these new services and you can just go in there really super quick. Nice and friendly, you know, professional and, you know, have that conversation about what that needs to look like. And also if you are not making any money, tell them, you know, by the way, it would be, you know, if you left, it would actually, you know, help me out. Maybe you'd rephrase this a little bit differently. But, you know, there is not a point of me having you as a client because I'm not making any money. So either we need to have a conversation about the commercials or we're going to, you know, we're going to, we're going to, we're going to part ways.

Action six. Booking a proper six-month review. You know, a proper conversation, not a ticket review, not a rush call. A scheduled business conversation at least, well, I'm going to say at least three times a year to be quite honest with you and making sure, or three to four times a year to make sure that you're doing those quarterly business reviews. Hence the name. But you are adding some value. You are not just selling to them. You are learning about their business. As their business is growing or what's happening in their business. Then you are identifying the challenges that they're having and then you're overcoming those challenges with your solutions that, so it just kind of like makes a buying decision rather than a selling situation, which we know a lot of MSPs do not like.

So action seven. What is going on in their world? Get super deep, you know, what's happening with their business plans? What's your strategy? What's your three to five year growth plan? You know, what new hires have you got? You know, are you moving office? Are you expanding? Are you bringing in some new technologies? You know, find out exactly what's going on. You know, their growth should trigger your growth at the end of the day. And guess what happens if you start doing this with lots of clients and your growth will start to happen as well. And no sales and marketing insight in this. Well, there is a bit because we don't want to get your messaging clear and we want to make sure that you, you are having your, having a really good quality conversation if you are in a niche with why you can help them specifically. But anyway, that's for another podcast.

Action eight. Let's educate them on everything you actually offer. Everything that you do. You know, the clients might see you as just doing IT support or a bit security, but show them what you do in advisory CTO. We've got a lot of clients who are doing CTO work right now and because they love it, and guess how much managed service work that generates? Quite a bit, you know, show the compliance strategy. Do they need to do things in their business for enable for them to enable to operate? So, you know, data compliance in the legal sectors and professional services and that sort of stuff. And share with them what you've got. Currently, you know, where they're at, what you've got currently, and also what you are looking at and what you are going to be coming and doing. You know, innovatively as the IT experts as it would be, you know, moving forwards. Your clients can't buy what they can't see. They're not going to ring you up and say, Hey Steve, John, would you mind just selling me some more stuff, because I don't think I've got enough here. No, it's up to you to do this thing, you know, to, to, to do this activity, this account management thing, so nearly there now don't fret.

Action nine. Clear, confident recommendations. You know, don't hint to them. Tell them this is what the business outcome's going to be when they have this problem done. You know, don't suggest that they have it, you know, recommend it. Clearly you are the technical expert. The reason that they're your client, is because you are helping them out overcome their technical issues. You know, and if it was my business, I would do this. Then ports and then have a really, you know, be confident, I guess what we're trying to say here under action nine in the way that you approach it, you know, don't go in there, you know, meek and mild go in there strong and, you know, positive and professional in helping them out.

Action 10 last, but by no means lease systemise the entire process you guys build your businesses on SOP so let's build one more just for luck. It's a QBR process. Not everybody or everybody should be involved in this in terms of account management from when they onboard to when they've been serviced to when they're having their QBR, to when you are reviewing it, create a checklist. Build it in your PSA, make it repeatable. You know, mature MSPs rely on structure and not memory.

So that was just a quick break fix edition on how to unearth, how to unlock, how to open up the tin and get yourself a bit more revenue from your existing clients. And also it helps you build that longevity. It helps you build that client retention and that relationship because you're getting further and further into helping them out as you and your business grows. You know, faster revenue growth without any new leads, higher margins through your, you know, better packaging, you know, stronger trust led client relationships.

And it's going to be more predictable because you've got more monthly recurring revenue coming in and there's going to be less pressure on you, you know, the business owner and your sales and marketing team, which means that they can do a better job, you know, rather than having to panic.

So these are your fastest growth lever, you know, growth through value. It builds transferable value. One of the key, you know areas that we need to focus on, you know, in your value multiplier. You know, be the MD, not the technician. Squeeze that lemon. Go and get yourself some lemon juice. Go and get yourself some new business through your existing clients. Follow this 10 step process. Share it with whoever you need to in your team, and if you need a hand with it, you know where we are. We should also help you out. Enjoy the rest of your day. I look forward to catching up with you soon. Take care now.

NEXT WEEK TEASER:  And in next week's show, we've got a real treat for you. We've got Julie, our leadership coach back in the house, and we are going to be talking about what to do when good teams go wrong. So if you've got a good team, but you want a great team in your MSP, then do not miss next week's show. See you then.

OUTRO: Just before you go, and if you're curious about how this episode links with the ability to scale your MSP to a million or, or if you are already there, accelerate to five, then we want to invite you to come and take the MSP Mastery quiz, and in just three minutes, you're going to get a 360 degrees scan of your business where you can identify the one or two tactics that can help you find more time, engage in, align your people and help generate more leads in your MSP. It's really simple. Just click on the link in the show notes and if you have enjoyed this episode, we'd love to get some feedback from you by means of a rating review on Spotify or iTunes, or your podcast platform of choice. We really appreciate every single one of them. Now, you can go and enjoy the rest of your day and we look forward to catching up and connecting with you soon. All the best.