Are You Acquiring Too Many Profit-Draining Customers?

As a VAR/MSP you want to make all your customers happy and for some solution providers that means making concessions from time to time. In fact, some IT solution providers become so flexible with their solutions and services that it becomes difficult to discern what their standard offering really looks like. Eric Gray, CEO of managed services provider Convergence Networks doesn’t believe in making exceptions, and the way he avoids this profit-draining problem is by nipping it in the bud during the prospecting stage.

Dec BSM Cover ThumbnailLast year, Gray’s company acquired only four new customers and the reason wasn’t for a lack of leads. The truth is there were nearly 40 leads in its sales funnel and 80% of those were warm leads acquired through customer referrals. Plus, when this MSP presents a prospective customer with a contract, it closes the sale 50 percent of the time. All of that means that in 2013 Convergence Networks intentionally KO’d more than 30 prospects. Despite acquiring such a small number of new clients, the MSP experienced 9 percent revenue growth over 2012, and it maintained double-digit profit margins per customer.

The fact is that Gray strictly follows a few time-tested business processes when engaging prospects. For example, a prospect that wants to get into a debate about why its antivirus is better than Convergence Networks’ is likely not going to work out. If a prospect wants to “start out” as a break-fix client, that’s not happening, either. End users who want to challenge the MSP’s pricing are also candidates for the blacklist.

Gray is quick to point out that sticking to these strict standards isn’t based on a pompous, know-it-all attitude. “I’ve learned the hard way that every time I make an exception to these rules, it always comes back to haunt me,” he says. “Additionally, industry regulations in markets such as healthcare, financial services, and hospitality are no longer holding only end users liable for security breaches — IT service providers also are now culpable.”

Gray shared with me some additional insights into his company’s success, such as his company’s commitment to following ITIL standards, which you can read about in my latest feature story, “Say ‘No!’ to Unprofitable Customers,” which will be in the December print edition of Business Solutions magazine and is available online now at BSMinfo.com.

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Secrets of a Successful VAR and MSP Merger

Imagine merging your small managed services practice with a larger VAR business and being faced with the prospect of having 45 customers who are used to paying for IT solutions and services only when something breaks. That’s the situation Jason Brunt, CEO of e3 Technical Solutions, found himself in after joining forces with Rick Carpenter, owner of break-fix IT service company Beyond Development, last year.

Jason Brunt, CEO, and Rick Carpenter, CTO, e3 Technical Solutions

Jason Brunt (l), CEO, and Rick Carpenter, CTO, e3 Technical Solutions

After investing in a MAXfocus (formerly GFI MAX) managed services platform, e3 Technical Solutions was ready for the challenge. “The biggest reason some service providers get pushback when selling managed services is that they fail to explain the value they can deliver,” says Brunt. “Selling managed services requires a consultative sales approach, including conversations about the costs of downtime and lost productivity.”

For Brunt and Carpenter, having these conversations has been the easy part and they’ve been steadily converting customers to the managed services model each month. “Because this is a big change for so many of our customers, we’ve purposely restricted the number of customers we’re approaching and converting each month, to ensure we can fulfill our SLAs [service level agreements],” says Brunt.

Another move e3 Technical Solutions is making during its managed services ramp-up period is developing its help desk center, which now comprises five engineers. “It takes time to hire the right people, and Rick and I both agree that this process it too important to skimp on,” says Brunt. “For example, during our 20+ years of working in the IT business, we’ve come across a few IT personality types that we avoid. The first is the arrogant IT engineer who thinks he knows everything and always talks down to end users. You can’t have a person like that interacting with your clients, plus that type of person can easily poison your other employees.” The second type of person Brunt and Carpenter stay away from is someone who exhibits a self-entitlement complex. “A typical example of this is a person who completes a six-month IT training course at a community college and expects a $65,000 starting salary,” says Carpenter.

Brunt and Carpenter agree that the best way to find good engineers and technicians is through face-to-face interviews and asking questions that reveal people’s motives. “Our current group of employees have come to us through people we’ve had experience with in the past,” says Carpenter. “We have full confidence that, if any of these techs are on the phone or on location, they’re going to provide good customer service.”

Despite its recent growth, the two business partners believe finding the right partnering opportunities will provide additional benefits. “When we come across other IT service providers in our area that we feel have a culture and work ethic similar to ours, we talk to those companies about potential partnering opportunities,” says Brunt. “The truth is that no MSP possesses every IT skill in-house, and partnering is oftentimes the smarter way to acquire a new skill or service.”

To learn more about what e3 Technical Solutions is doing to achieve 100% sales revenue growth this year, check out “Merging Break-Fix And Managed Services” in the December issue of Business Solutions magazine and available online now at BSMinfo.com.

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Overcome Cloud Objections with Education

If there’s one recurring theme I’m noticing a lot more lately — especially with regard to VARs and MSPs who sell to the SMB market — it’s the fact that there are a lot of misconceptions, misinformation, and ignorance that must be overcome before the provider can talk about specific products and services. I recently came across a report released by the U.S. Fire Administration and FEMA on the topic of business continuity planning, for example, which revealed that while 94% of small U.S. businesses back up the financial information stored on their computer systems, 60% of these companies store their backups on-site only. It’s kind of shocking when you think about the risks these businesses are taking.

Jason Bystrak, Senior Director of The Americas, Ingram Micro

Jason Bystrak, Senior Director of The Americas, Ingram Micro

The cloud is another topic that, like the topic of data protection (and very much related to data protection), requires customer education as a prerequisite to selling it. Jason Bystrak, Senior Director — The Americas at Ingram Micro Cloud, addresses this subject this month in an article on SearchITChannel titled “Three principles for successfully selling cloud services.

Here’s a sneak preview of some of the great advice Bystrak shares in his article:

“One of the distinguishing features the MSP is able to talk about is the data encryption and security it provides — which many public cloud providers can’t — and the important role security plays in complying with industry regulations. Business availability is another distinguishing feature. Although many public cloud providers can boast about a cheaper cost per gigabyte, when business customers can’t recover their data in a timely manner, the high price of downtime adds up quickly. Selling a cloud service with a short recovery time guarantee, on the other hand, is a huge value and differentiator.”

 

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The Smart Way to Sell SaaS Email

Help your clients weigh the pros and cons of Exchange in the cloud with these two essential tools.

With Gartner’s forecast for 2011-2017 that cloud spending is expected to hit $250 billion by 2017, and the software-as-a-service (SaaS) market growing to $45.6 billion by 2017, it’s no wonder that everyone is now looking at the cloud for IT answers.

But does the cloud cater to the needs of every organization? And is the answer that simple?

Cost Savings + Efficiency = Exchange in the Cloud
IT research firm Computer Economics says that organizations fully utilizing cloud computing save on average more than 15% in IT spending, whether measured as a percentage of revenue or on a per-user basis. As a result of these economic efficiencies, cloud users are able to devote a higher percentage of their IT spending to new initiatives and less to ongoing support. The cost savings, combined with strategic benefits in speed, scalability, and agility, argue in favor of organizations moving aggressively to the cloud.

Email is a good example of a service that can be easily moved to the cloud. Most organizations tend to re-assess whether they should keep their Microsoft Exchange platform in-house or migrate to the cloud via a third-party service provider when their in-house infrastructure is reaching its end-of-life.

Rather than reinvest in costly servers and other hardware, a company can find a trusted hosting provider and deploy Exchange in the cloud—in addition to a whole suite of applications such as Lync, SharePoint, online backup and more—all for the same price of a new infrastructure (or even less).

Get a Head Start on Selling Exchange in the Cloud
Most businesses are already in the cloud to some degree. Or they’re looking at how to get there. But they’re also looking for providers who can help them leverage all of the cloud’s benefits without the hassle of managing an infrastructure. That means they need reliable and knowledgeable vendors who can offer a solution that’s tailored to their needs.

This opens a wide door for managed services providers to position themselves as the go-to solution for their customers. But to fully capitalize on the SaaS email market, you have to understand its potential, its limitations and common customer concerns. To help, we’ve created a No-Nonsense Guide to Weighing the Pros and Cons of Exchange in the Cloud. It comes with a Total Cost of Ownership Calculator so that you can help your customers easily compare the cost of various options based on their specific needs. These tools will also help you better understand the ROI of each option and scenario.

More importantly, these tools will help you identify the best option for your customers—whether they’re already in the cloud or still using traditional IT services.

Get a head start on your competitors. Download these tools today and position your business in the SaaS market. Latecomers risk missing out on a big chunk of potential revenue.

Interested in becoming a SherWeb Partner? Click here to sign up now.

information LogoFor more information, contact your Ingram Micro Services sales representative.
Call (800) 705-7057, option 5 or 
e-mail.

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The Smart Way to Avoid Cloud Storage Pricing Pitfalls

Cloud Summit 2014

One of the regularly recurring themes we cover on CloudTalk is overcoming price objections. Since this is an ongoing struggle for many MSPs, I thought it would be helpful also to share links to three previous articles that have appeared earlier this year on CloudTalk:

Last week, Rob Merklinger, VP of sales at cloud backup and business continuity vendor Intronis, shared some helpful tips on this topic (see 3 Ways Successful MSPs Avoid Selling ‘Just’ Storage)

While all three of his points were valuable, the one point MSPs can’t afford to miss is this: Selling business continuity services differentiates you from those selling ‘just’ storage. According to Merklinger:

“Many SMBs have learned the hard way that there is a big difference between storing data and recovering it. While the former costs almost nothing, the latter is where the real value is for the customer, and where MSPs should be focusing their attention. Equally important to selling business preparedness services is selling a BCDR (business continuity and disaster recovery) plan, which should include a corresponding SLA (service level agreement) that defines contractually what the MSP agrees to provide before, during, and after a disruptive incident.”

The SLA can (and should) address the following three BCDR-related topics:

RTO (recovery time objective) – This is how long the client can be without certain data/IT services before experiencing negative effects.

RPO (recovery point objective)
– This refers to the specific amount of data than can be lost during the RTO period before experiencing negative effects.

RGO (recovery granularity objective)
– As its name suggests, an RGO defines how granular within the storage architecture recovery needs to be, including file level, block level, or transaction level. Each client’s specific need will determine whether VTLs (virtual tape libraries), snapshots, or CDP (continuous data protection) is required to log each individual change.

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Expect Your Workday to be Ruled by the Internet of Things in 2020

by Rob Roache, VP Business Solutions – Northwest Region, CenturyLink

As technology continues to evolve to support and create uses of the Internet of Things, it’s not hard to imagine — even predict — how businesses and their workers will come to depend on this interconnection among devices, users, and the Internet in everyday life.

In homes, cars, offices, stores and more, connected devices — an estimated 26 billion worldwide by 2020, according to Gartner — will have a wider influence on what we do, and how we do it.

Thanks to this interconnection, data will become ubiquitous. And more and better information will make devices smarter, having a big impact on business.

Our new infographic, “How the Internet of Things Will Rule Your Workday in 2020,” explores this further, giving us a picture of the state of IoT, six years into the future. Take a look at a day in the life of “Charlie,” in the year 2020:

CenturyLink_Infographic

What other influences do you think the Internet of Things will have on business in 2020? Check out CenturyLinkVoice on Forbes for more about how your business can prepare for the future with advanced technologies.

Click here to learn more about CenturyLink and our business technology solutions

Rob Roache_VP Bus Dev_NW Region_CenturyLinkRob Roache Bio
Rob Roache leads the sales, engineering and sales support teams focused on serving global, enterprise, government and education customers across the Northwest. His teams are focused on solving the business challenges of customers using an extensive portfolio of network, hosting and managed services solutions.

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4 Can’t-Miss Updates from Ingram Micro

By Renee Bergeron, VP Managed Services and Cloud Computing, Ingram Micro

There are two major upcoming events and two very important announcements/opportunities that I wanted to let you, our valued partners, know about so you don’t miss out:

Renee Bergeron, VP Managed Services and Cloud Computing, Ingram Micro

Renee Bergeron, VP Managed Services and Cloud Computing, Ingram Micro

1 – See Us at IT Nation November 12-14
We’re less than two weeks away from IT Nation, one of the premier IT channel events of the year. Ingram Micro is a proud partner of PSA vendor ConnectWise, the host of the IT Nation event, and we will have a 20’ x 20’ booth (#509) at this year’s show. Joining us at our booth will be CenturyLink, SoftLayer, RingCentral, and VaultLogix just to name a few vendor partners. If you’re planning to attend, please be sure to stop by our booth so we can discuss how Ingram Micro can help you grow your reseller business. In fact, following are three topics I’d like to discuss with you further at the show.

2 – Be a Thought Leader, Generate Quality Leads
Nearly every IT service provider understands the value of educating the marketplace and being seen by customers and prospects as a thought leader. But, many of our partners have shared with us how difficult it is to come up with topics, procure the right resources, and pull off a quality educational event. Ingram Micro has come up with a solution to this challenge, and earlier this month we launched our Partner Enablement program, which is a regularly occurring, vendor-agnostic webcast that our partners can utilize to invite customers and prospects to. Ingram Micro will facilitate attendee registrations, and we’ll send each referring partner their registrants’ contact details to follow-up after the event.

Our first webcast, titled “What the Cloud can do for your Business!” was a Cloud 101 presentation hosted by Jason Lambert, Field Technical Consultant – Microsoft Azure, Ingram Micro. Jason explained the key benefits of the cloud, the different types of cloud offerings, and he clarified some of the biggest cloud misconceptions in simple, easy-to-understand terms. What’s nice about this presentation is that it’s a true resource for our partners: Nowhere is a cloud vendor promoted, and Ingram Micro’s name isn’t even mentioned in the presentation (Jason is introduced as a field technical consultant for a leading cloud service provider).

Other webcast topics include: business continuity and disaster recovery, VoIP, security, virtualization, RMM, and more. For more information and registration details, visit ingrammicroevents.webex.com.

3 – Cloud Summit 2015 Dates, Location Confirmed
The Ingram Micro annual Cloud Summit will be held May 11 to May 13, 2015 at the Arizona Grand Resort in Phoenix, AZ. This event is packed with industry best practices information and training from renowned analysts and business consultants, and it features all the leading cloud vendors under one roof. Make plans now to attend and check out IngramMicroCloud.com for updates as the date approaches.

4 – Cloud Elevate Reaches the 1,000-Partner Milestone!
Earlier this year, Ingram Micro announced the availability of its Cloud Marketplace, a platform for Ingram partners to browse, configure, purchase, provision, manage, and invoice multi-vendor solutions through a single portal on behalf of their clients.

To incentivize partner to try this new service, we developed the Cloud Elevate program, which includes financial incentives that could be used toward Ingram hosted services. I’m happy to announce that the program recently reached the 1,000-member milestone, and now we’re starting Phase 2 of Cloud Elevate. If you haven’t yet signed up, you can sign up for free at IngramMicroCloud.com, and just for signing up you’ll receive a $300 credit that can be used toward Ingram Micro hosted services. If you’re looking for a simpler way to sell (and invoice) bundled cloud solutions and services, this is it. Don’t take my word for it; sign up for the Cloud Elevate program and see for yourself how easy it is to purchase, provision, and manage multiple cloud services for all your customers – all from the same portal!

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