How a Small MSP Lands Large Cloud Deals

Videology is an engineering firm that boasts one of the world’s largest video advertising platforms. The firm is headquartered in New York, with offices in Baltimore, Austin, Toronto, London, Paris, Madrid, Singapore, Sydney, and sales teams across North America.

Datasmith - Paul Smith

Paul Smith, Partner, Datasmith Network Solutions

Datasmith Network Solutions is an eight-employee MSP and Ingram Micro partner that’s based 30 minutes outside of Boston. In the traditional IT service world you wouldn’t likely see a company like Videology and Datasmith working together. But, Datasmith is not a traditional reseller.

“That’s what’s nice about the Web — it affords smaller businesses to look like larger companies,” says Paul Smith, a partner at Datasmith. “After we have a chance to engage with larger companies like [Videology], we can show them how we can provide them with everything they need to run their businesses more efficiently, and we’re very transparent regarding how we accomplish this. There’s something to be said for streamlining processes to improve workflow.”

But, getting a large client’s attention with a nice website isn’t the sole reason Datasmith wins deals with international firms — there are a few additional and equally important steps involved.  Find out what these are by reading “A Small MSP’s Secret To Landing International Cloud Deals.”

 

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Take “The E-Myth Revisited” Approach to Selling Cloud Services

The year 2012 marked several turning points for Jason Etheridge, president and CEO of IT service provider Logic Speak. It was during this period he was introduced to The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber. The author advises small business owners to be intentional about running their businesses, including determining eMyth Revisitedhow much profit they want to make.

“Most small business owners do what I used to do, which was to start with a revenue goal, then subtract employee expenses and other costs, and end with your profit margin,” says Etheridge. “The E-Myth flips this model on its head, challenging business owners to first decide how much profit they want to make and intentionally building a business model — including services, employee compensation, and all other costs — on top of that. This approach ends with a plan to accomplish the profit objectives set at the beginning.”

One of the first “intentional” changes Etheridge made to his company was retooling Logic Speak’s mission statement, something he says used to be long, overly wordy and formal, and above all else — inaccurate. “We originally created a mission statement because we had to put something on our website, not because we believed it,” he says. “Our mission statement now is: ‘To use our abilities and technology to have a positive impact on the lives of our clients and our employees.’ If we are doing that, we are succeeding. If not, we figure out why and change what we’re doing.”

Logic Speak’s new mission statement doesn’t say anything about shareholder value or profits. “If we accomplish our mission, I believe the rest takes care of itself,” he says. “That simplifying statement is hands down the biggest — and best — business decision I have ever made.”

After updating its mission statement, Logic Speak’s next move was to become a cloud services expert, which entailed engaging customers about their cloud fears and misconceptions via one-on-one lunch appointments and using this invaluable feedback to determine which cloud services it should sell.

Last year Logic speak achieved 15% revenue growth over 2012 and this year the eight-employee MSP is projecting 25% revenue growth over last year.

Be sure to check out the details of Logic Speak’s managed-services-to-cloud-services transition by reading, “Find Your Cloud Services Niche.”

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How a PSA Commitment Led to 150% Revenue Growth

In my last blog, I talked about some of the common pitfalls VARs and MSPs run into with PSA (professional service automation) tools. One of the biggest pitfalls identified was “Using 10% of the application.” I recently spoke with Kory Lindersmith and Lonnie Ladwig, cofounders of Dakota Retail Technologies, two guys who can closely identify with this pitfall.

Several years ago the VAR invested in ConnectWise’s PSA to track its helpdesk hours and serial numbers for its hardware sales — but that was about the extent of its PSA use for nearly three years.

Last year, after recognizing several inefficiencies in its sales and billing processes, the VAR made a commitment to use more of its PSA’s features. “We spent time watching training videos and becoming active on the ConnectWise user forums to learn how other IT service providers were using their products to run their businesses more effectively,” says Lindersmith.

Within a couple of months, the VAR started using the PSA tool to manage its service contracts and marketing initiatives. It also uses the tool to automate invoices and monthly credit card/ACH (automated clearing house) payment processing. “The PSA tool has even helped us be more proactive about selling professional services contracts,” says Ladwig. “Several months before a 12-month contract is up, we receive an email reminder, and the customer receives an email detailing the current service plan, the upcoming expiration date, and simple steps to continue the contract.”

The VAR’s efficiencies improved so drastically over a one-year period that it was able to hire another full-time salesperson to further capitalize on new growth opportunities. As a result, Dakota Retail Technologies is projecting 150% revenue growth this year over 2013. You can read the rest of the story, “Break Out of Paltry POS Sales,” on BSMinfo.com.

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Are You Guilty of these PSA Pitfalls?

As a follow-up to a product analysis I wrote last year on PSA (professional service automation) tools, I recently talked to representatives from Autotask, ConnectWise, and Tigerpaw Software to get an update on their products in the past 12 months. You can check out the details of their responses in my PSA Product Comparison Update.

During my interviews, I also asked each vendor the following two-part question: What are the biggest pitfalls you see among MSPs that shortchange their PSA benefits, and what’s your advice on how to avoid these pitfalls?

Following is a summary of the replies I received to this question:

According to Joe Rourke, director of product management at Autotask: “The biggest thing we see is MSPs making educated guesses instead of fact-based decisions because they’re not able to easily access the right data to make informed decisions. We also see them not fully taking advantage of the tools in their PSA system to be more efficient and use resources more effectively.”

Mark Sokol, ConnectWise’s director of marketing, had this to say: “Using 10% of the application, or fixing one problem within their company and not continuing to grow in their software utilization.  The most successful MSPs, VARs, and system integrators allow ConnectWise to automate a variety of tasks, manage projects, track sales, and complete their billing.  Underutilization is the biggest pitfall – that’s why we do so many things outside our software to promote using ConnectWise to its fullest potential.”

James Foxall, president and CEO of Tigerpaw Software had this to add: “Often it’s related to not owning the project and committing to moving their business forward with their PSA tool. This is especially challenging for smaller MSPs where the owner is wearing multiple hats. Once a purchase decision has been made, the MSP needs to commit to doing the things necessary to implement and take ownership of the end result. I’m always nervous when an MSP comes to Tigerpaw having run (unsuccessfully) our two competitors, as it makes me question their commitment to the solution they purchase.”

In my next blog, I’ll share insights from an MSP that was guilty of using only a small percentage of his PSA’s capabilities for years and the dramatic turnaround he experienced after he made the commitment to start taking this powerful tool more seriously.

 

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The Overlooked Caveat to Being a ‘Total Solutions Provider’

Most of the IT service providers I talk to aspire to selling multiple, complementary solutions to their customers, often describing themselves as one throat to choke or a one stop shop. That’s why I was initially taken aback when I first spoke with Jim Steinlage, president of Choice Solutions who made a decision to sell off five of his business technology practices so he could focus on becoming a virtualization expert.

I was further intrigued to learn that the service provider’s profitability doubled each year for three consecutive years, and I began to question: “Is this company the exception to the ‘total solutions provider’ rule?” By the end of the interview I had my answer: “No.”  And, here’s why: Choice Solutions still provides customers with total solutions, including: VoIP/unified communications solutions, CRM, MPS (managed print services), ECM (enterprise content management), or Web development. The caveat is that if a customer needs these IT solutions or services, Choice Solutions is no longer the company fulfilling every request; it works with one of its strategic partners — which is typically another IT specialist that doesn’t compete with Choice Solutions’ virtualization speciality — and the partner handles it.

So, just to clarify: Being a total solutions provider is absolutely what most of your customer’s want. And, it is the best way to avoid competitor creep (e.g. the copier dealer that’s vying for your customer’s network business; the telecommunications company that wants a piece of the network revenue). But, you don’t have to provide every IT solution yourself. Taking a few cues from Choice Solutions makes a lot of business sense, especially if you find yourself winning fewer than half of your prospective sales engagements and/or if your competitors are cherry picking your best talent — two challenges Choice Solutions was faced with a few years ago — but doesn’t face now.

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3 Tips For Beating Cloud Pricing Paralysis

You put a lot of thought, research, and training into selecting your latest cloud service and you know that coming up with an attractive price is very important. But, don’t fall into the trap of analysis paralysis, warns Jason Etheridge, president and CEO of Logic Speak, an MSP that’s projecting 25% revenue growth this year, following last year’s 15% revenue growth over 2012.

Etheridge offers the following three tips to those struggling with pricing their cloud/managed services:

1. Your Pricing Isn’t Etched in Stone. Unlike the 10 Commandments, which have remained unchanged for thousands of years, it’s okay to change your prices from time to time, says Etheridge. “Your clients will help you determine if you’re too expensive, and your net profit will tell you if you’re too cheap.  Don’t be afraid to raise your prices, and even better — don’t be afraid to lower them. Some of the nicest comments we’ve ever gotten were from a discount that we were able to pass along to our clients because we changed backup vendors.”

2. Evaluate Your Prices Yearly. Get in the habit of evaluating and setting your prices for the upcoming year in November, he advises. “This gives you a month to use your price increase to sell your holdout clients on a locked-in price for the following year.  They’ll feel like they “got in under the wire” and you got them off the fence!  Change your price any more often than that and you’ll create confusion and frustration (and more pain for whoever does your accounting).”

3. Offer Discounts (Just Not Forever). “Your client loves your cloud service.  They are really excited about implementing it as quickly as possible.  There’s just one thing.  It is just a little too expensive.  If only it were a little cheaper, they’d be ready to go!  Sound familiar?  Discounts are a part of sales.  Don’t be offended or discouraged — go ahead and offer that discount. But, here’s the trick: Expire the discount after a fixed amount of time.  “Sure Mr. Valued Client, because of our great relationship over the past several years, I’m happy to give you that cloud service for 15% off for a year!”  They will get all warm and fuzzy over having gotten a discount and you get the satisfaction of signing up another client.  After the discount expires, you’ll have them hooked.”

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The Smarter Way To Sell Profitable Cloud Services

At this year’s annual Cloud Summit in Florida, Ingram Micro announced the availability of its Cloud Marketplace, starting with U.S. channel partners in June, Canadian partners in July, an expected go-live date for Mexico-based partners in September, and wrapping-up with the UK and Europe in Q4. The goal of the Ingram Micro Marketplace is to ease Ingram Micro partners’ transition to the cloud by providing a number of white glove services, including technical sales, engineering, migration, remote infrastructure management, and service desk.

Jason Bystrak, Senior Director of The Americas, Ingram Micro

Jason Bystrak, Senior Director of The Americas, Ingram Micro

I recently spoke with Jason Bystrak, Senior Director of The Americas at Ingram Micro to learn more about the Ingram Micro Marketplace. He shared with me that hundreds of partners have already signed up for the US Marketplace, and hundreds more are expected to follow suit before the end of the year. Following are some additional highlights from our conversation:

What can a reseller do on the marketplace?
Jason Bystrak: The Ingram Micro Cloud Marketplace makes it easy for channel partners to browse, configure, purchase, provision, manage, and invoice multi-vendor solutions through a single portal on behalf of their clients.


So a reseller can spin up a mailbox or virtual private server,
or host a website with a few clicks of the mouse?
Jason Bystrak: Yes — it’s really that easy. Our customers made it clear that they cannot efficiently scale their cloud business by utilizing multiple vendor web portals, and we built the Ingram Micro Cloud Marketplace as a solution. We produced a video about Tech IT supporting Paul’s Pet Shop to demonstrate the challenges.

How does a reseller sign up to access the marketplace?
Jason Bystrak: If they are an existing Ingram Micro partner, they are already signed up! We’ve built single sign-on integration with the www.IngramMicro.com website or they can use their log in credentials to go directly to www.IngramMicroCloud.com. If a partner has not established a reseller account, they can also do this by visiting the website.

What is Ingram Micro doing to support partners
when learning to use the Cloud Marketplace?

Jason Bystrak: We have a dedicated Activation Team to help partners use the Marketplace. They can be reached at (800) 456-8000 x77942 or at cloud.activations@ingrammicro.com. We also produced a short video to demonstrate how easy it is to use the Marketplace.

We announced the Cloud Elevate program. One of the key benefits is that we are providing credits for free cloud infrastructure to make sure partners are able to get hands on with the Marketplace solutions. They can use the infrastructure to run their own business, conduct sales demonstrations, or have their technical teams provision a sandbox environment to test solutions. 

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