EP136 – The Secret to Building a Pipeline of Profit Part 1 with Ian Luckett and Stuart Warwick

INTRO

In this episode of the IT Experts Podcast, we are. Going to help you build a pipeline of profit in your MSP.

Welcome to the IT Experts Podcast, the only podcast to help MSP scale to 1,000,000, and if already there get to 5 and go fast 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. I've wheeled out the big guns today. We've got Mr. Warwick in the house. How you doing, Stuart?

STUART

Right

IAN

OK. We're going to get straight to it. This is actually the first of a really exciting bit of a trilogy, three-part series, whatever you want to call it. We felt compelled to put this together, because we just, o ver the last couple of months, we working really hard with our clients on our profit amplifier system and we wanted to share it with you basically, didn't we?

STUART

We did, we did.

IAN

And the reason for that is because, number one, they've been getting so many great results from using it and it's all about account management. Which is one of these subjects that you see and hear on LinkedIn and in all the forms and everything like that. But there's a certain process that you need to go through to do this, and so I thought. You know what? Let's get Stuart on the podcast. Let's have a nice little three-part series where we're going to help you understand what it is and why it's, you know what it’s kind of all about. And then we're going to give you some tactics. To give you some ideas and some things that you need to actually do. And then the last one is going to be to help you kind of keep that cadence together and help you to structure and maximize the opportunities within your existing client. Right.

Stuart, account management, talk to me about it. What is it? This is, this is your wonderful phrase. Low hanging fruit, isn't it? Why is this such a massive opportunity for so many MSP?

STUART

Is I love it because low hanging fruit is a term I came up with some years ago because it just epitomises exactly what account management, TBR, QBR, whatever you want call it represents to MSP's and the MSP business model is such a powerful business model because it's a compounding one. If you've, if you're successfully able to hang on to your clients, which most MSP's do every time you add a client, or you add more services, the revenue, and particularly the profit. Compounds and if you're already running a profitable MSP, every new client or every new service drops to the bottom line. And who doesn't want, Compounding profit?

IAN

The craziest thing about this Stuart is, is that everybody that we talked to in the channel when they're looking to grow and scale their MSP all want sales and marketing all want new leads, all needs move away from referrals, bring in the bring in the fresh new leads. Marketing does work amazingly. That's a whole another podcast, and that's in fact why we've got a three-part on that, we did a little while ago. I should drop the link to that in the show notes. But the thing about account management is that you've already got the clients they already know, like and trust you. They already have this relationship with you, but this is something that we just forget to, put a process around because we're too busy hunting, hunting, hunting. Aren't we looking for the for the fresh new lead when an actual fact building our client retention, even though it's really good, it's just something that just doesn't get focused on the net.

STUART

It doesn't and it's kind of the thing that's lying in plain sight, yet hidden well hidden in plain sight and the issue here is that, actually, MSP business owners get in their own way. They have a set of beliefs around the fact that they can't talk to their existing clients because if they do, it feels a bit uncomfortable, a bit icky because they feel like they're selling to them and say, hey, do you want some, you know? You know you want to buy some other services, which obviously isn't the way you phrase the conversation, but most MSPs are scared of having a regular conversation because it feels like they're selling. The point is, if you change the way you have a conversation with your clients, they will start to value in a different way.

IAN

Big Thunder over Luton. If you heard that on the microphones.

STUART

Wow, that's a big thunderstorm. Given we're in a sound room.

IAN

Let's keep going.

STUART

Here, let's keep going before the roof leaks.

STUART

Yeah, it's the Jewel in the Crown account management piece. If you've done the hard work of setting up your MSP, you've got through that survive phase and you're in the driving phase. You're building a team, you've got a team already. Optimizing your existing clients is the key to compounding profit in your business and it's also the key to building what we call is like a Moat around your business. You know, full of water, that makes it really difficult for other businesses MSPs to scale into your castle, into your fortress, and so you become a fortress of security and productivity and efficiency for your clients. Your clients get to value you, so the opportunity is massive because you get to proactively sit at the boardroom table or at the head table with clients because they say, hey, hey Steve, what do I do? We're about to add another 50 people or another five people. How do we best set this up? I've heard this going on. They start to seek your advice instead of you just being that transactional supplier and again sound bites you've heard many times. But the thing that gets in the way of MSPs optimizing the account management relationship side is themselves. The fear of having the conversation because it feels like they're selling and as a result you're the last to find out when a client is unhappy. The minute you find out is when they're saying hey, actually, we've decided to go with someone else because you're not giving us this or you're not doing that or we're unhappy with this or we think we've outgrown you. And suddenly that puts you into, you know, right on the back foot. So when you go account management process is in place and you're having regular conversations, but in a certain way. It's great for both Pipe becomes a win win.

IAN

Let me just pick up on something on you. Something you just said there and you know we. You know, our strap line is we help you build your MSP, grow your MSP with confidence because many are accidental business owners and their technical and you know this isn't just about selling to existing clients. So sales, sales and MSP's like scary, dirty word. Anyway, they don't like to do it. They like to build relationships. But this is actually about building relationships. So it's a bit. Of a it's a bit of a, ironic tragedy that the one thing that they're really good at, which is building relationships for stickiness and attention, is actually one that, if they went a bit deeper and this is what we're going to be covering off on the next three podcasts, then you'll be amazed at about the level that you'll then be able to take that relationship cause this is actually just about building deeper relationships, isn't it?

STUART

It is. Because people buy people and your clients originally bought you for who you are and what you represented to them. Now it's in the case of maintaining that positioning, because if you're not talking to your clients regularly and you know let's boil it down, account management is just a regular, valuable conversation between two parties to maintain the relationship and in this case a business relationship that is a financial relationship as well.

So if you are not talking to your clients regularly and being relevant, then somebody else is very likely to start that conversation. Because the thing that is going on in business all the time, well, life all the time is this change. Your clients businesses are changing all the time. Your businesses are changing all the time. Technology is changing all the time. The business landscape is changing all the time. The financial environment is changing all the time. The economic, you know, everything is changing microscopically or a lot all the time. And so if you are not regularly checking in with your clients and adding value in terms of what you have to. Offer, you know, strategic business advice around protecting their business and optimizing their business, looking for ways of offering value proposition of how you can, how they can invest to actually save money or make more money through technology. Instead of just turning up and thinking well, do you need some more laptops and being transactional. And so when you change the type of conversation you're having and you have a regular frequency to that conversation which is relevant for both parties, you and them, it becomes something that you both value. And if it's valuable, you keep doing it, and if you do it for 10 to 15 years, think about the compounding return on investment to that one client, to your business over that period of time, because the most the biggest cost to acquiring customers is acquiring them in the first place. You know the marketing, the sales, the effort, the emotional effort that goes into landing those clients once you've got them, yhe biggest return comes from retaining them.

IAN

So this isn't just about doing QBR. QBR just have a little chat with them and that sort of thing. It's much more than that, isn't it?

STUART

No, it is it is.

IAN

In terms of in terms. So what, what is it, what is what? What's the detail? Well, not necessarily the detail behind it, but what's the, you know, why is it different than just having a QBR every three months or something like that?

Speaker 2

Because it's about positioning and value. A value exchange between the two of you, and if you're not clear about and, and this comes back to the whole point I said earlier is that MSP's get in their own way, so if you're not clear about your value and about what you bring to the party other than IT support which the client bought from you a few years ago, how have things changed? Why are you still relevant? And unless you become clear and confident about your value and what you do for your clients on a consistent basis and the world is changing, you know, with AI and technology and the access the Internet originally the access to information, we all know that service environments are becoming commoditized. You know the bit that was magic before is now becoming transactional because of technology. So you've got to find the advisory positioning, the advice position, the consulting positioning within your business to remain valuable. And then on the back end come the products and services that support the kind of the transactional piece that you're experts in delivering and clients need because they can't do it themselves because they're not IT experts, so it's all about positioning your value to the client in in context to where they are and where they're going in their business.

IAN

And it doesn't make you laugh. Because when you look at the amount of events that goes on networking that goes on, you know business development, personal development, all of these different things that every MSP is doing to try and get them to have the next shiny ball, the next bit of tech, the next is your platform, whatever it might be these are the things that you can then reverse engineer into. Hey, by the way Mr. customer, I was at an event the other day and I was learning about the new way to do the service desk or install this or reset password or whatever it might be. And it's like they've been really, really deliberate on working out what it is you need to do and working out. How you're then gonna put that back into your offering Isn't it. Because it's about not only telling them what your you know packages and pricing and that what that looks like. But how are you then enhancing that and how are you then building that. So, where do we start with this? You know we, we've kind of talked about why you need to do it. It's going to help you to build up a profitable pipeline. It's going to help you to, you know, get that climate sense.

STUART

And Ian, let's just quantify what a profitable pipeline looks like

IAN

OK.

STUART

Because every client that we get under the hood with has got in the first year anything between 40 and 100 grand worth of additional.

STUART

I never believed you when I first met you.

Speaker 2

No, I I know you didn't. And when I say 40, I don't mean 40 pounds. I mean 40 grams.

IAN

Yeah.

STUART

Anything between 40 and 100 gram, if not more, depending on their size of low hanging fruit that is being ignored, overlooked, lying, lying hidden in their existing clients. And literally this is proven on, you know, dozens and dozens and dozens of clients. And they are in denial themselves when we have this. We have this constant and we say there is at least 40 to 50 gram lying there.

IAN

They don’t believe us.

Speaker 2

They don’t. But once you then go through the strategic thinking that we teach them, and then they apply it in a tactical basis, and the hardest thing is that actually them doing it and getting their head round that they're not selling and they're starting a valuable conversation with their with their clients. The hardest piece is getting over themselves, getting out of their own way, and actually scaling confidently in MSP is all about the business owner getting out of their own way and we deal with this. So many different areas, not just in this whole account management area. But as they start to get the confidence and the insight of how to start getting out of their own way and have these better conversations, they start to tap into this 405060 grand a year's worth of. And because most are profitable to a point, even if they're break even. Yeah, all of this is dropping to the bottom line now. It doesn't change their net profit necessarily in the short term because they're reinvesting it, they're reinvesting it in additional staff additional premises because they're expanding...

IAN

Yeah.

STUART

However, it's lying there and it's giving them the capacity and infrastructure to then accelerate their scaling in the very near future.

IAN

So getting out your own way and you know we've talked about this before, what's the kind of the first step we're not going to trample too much on the next two episodes of the of this particular three-part series, but what's the fundaments behind it, what do they need to get in place to make sure that this is successful.

STUART

They need to look at. What they've got. Look at your existing client base. Look at what they're currently buying from you or not buying from you and work out how to have a different conversation with them or start the conversation that you're not having with them already. And the awareness of what the gap is between what your clients are currently buying from you and what they ought to be buying from you for them to optimise the security and efficiency and effectiveness of their use of technology and their businesses through you. That is the key starting point. Stop and the thing here again, Ian is where all MSPs go wrong is they don't understand the numbers. So actually you say this and it's like, oh, yeah, yeah. Look at clients and what are what are they? What are they worth to you from a revenue and a gross profit point of view? And many clients have not got their PSA set up appropriate to be able to pull this information out. So therefore it ends up in the difficult box because there's work to be done and spreadsheets to extract. And so it doesn't get done because you get busy back onto the whatever is screaming at you today or next or this week.

IAN

So back and you might notice it's a little bit quieter in Luton on sea this afternoon. There seem to be an absolute tsunami of rain coming down, so it should be a little bit quiet in the background there, but we're just going to wrap this one up, Stuart, for the average MSP out there today, how big an opportunity is this once we get these three episodes out of the way and they embrace the process of the system that we're talking about.

STUART

It it's enormous because MSPs that haven't got a consistent account management QBR, DBR process in place is leaving masses of profit, profit and revenue on the table in plain sight. And so the opportunities are enormous. But it's not just about build, you know, tapping into that profit pipeline that lies unhidden in your, in your business or hidden in your business, it's about positioning yourself as a valuable partner to your clients, not a supplier. And then builds a Moat. You know, it's one of the things that builds a huge big Moat around your business and their business from anybody else, being able to muscle in on that business. And so without it, you're at risk. You know, it's a specific risk to your business because you are only seen as transactional and you're only there when you know you're out of sight, out of mind. And so this opportunity builds profit, builds relationship, keeps you visible, and protects long term profitability which year on year can compound if you get this right.

IAN

Lovely, thanks Stuart. And what I just want to do just before we say cheerio on this one is justwant toa get you to listen back to episode 101 Where we interviewed our great friend Paul Crocker around why do I need a VCIO as a service in my MSP. And the reason I want you to listen to this episode is I want you to kind of wet your whistle whatever you want to say it to think about the other things that you could be saying in as a value spec as value opportunities, you know it's something a little bit different from the from the normal MSPs. You know your competition as it would be, go and have a listen to that one from Paul. It's a great episode. He's a great guy and it's really, really valuable for you as an MSP to listen to, let alone for you to adopt that approach as well. And you know, just kind of wrapping up just before we. Say thank you to you Stuart is go and have a look and go and take the MSP mastery quiz. So many people say to us well. How does it work? How do I scale? What are the things I need to do in my business? Cause every MSP's different but what the quiz does Lucy takes 4 minutes absolutely free and it identifies if you've got all the right ingredients to scale, you get a personalized report and it helps you to work out what you need to focus on next in your MSP to get you to a million and if you're already there, help you get to 5 and go faster.

So, Stuart, thanks for your time today with the first of the trilogy on a pipeline of profit building a pipeline and profit in your MSP. I'm going to catch up with you on the next show.

STUART

Fabulous. Look forward to it.

OUTRO

So I hope you enjoyed the show. If you did, I'd love it if you could leave a rating and review on your favorite podcast platform. If you want to learn more about how to take your MSP to a million, or if you're already there, go faster then come and join Stuart Warwick and myself in the Scale of Confidence. Facebook group. Link’s on the Show Notes. You go and enjoy the rest of your day and. I look forward to connecting with you soon.