Pax8 Academy

James Steel: Hey everyone, thank you so much for joining me again for this episode of Harvest. We've got a great one here today. I'm with Maria Armstrong who not only is headed up one of the biggest communities, if not the biggest community in the APAC region for MSPs, but is also now head of the Pax8 Academy in the region. So Maria spends all of her time working with MSPs and helping them be more profitable. She's been very kind in offering some time to talk to us today about some of the practical, tactical ways that we can help MSPs generate more revenue and be more successful with their existing client base.

So Maria, one of the things that's been on my mind is how we work out what it is we should be selling. There's so much today that an MSP can do for products and services and things, and you're helping MSPs all the time with their portfolio. Where do you start talking to them? Where's the advice? What are the best practices?

Maria Armstrong: So my first question is always what do you sell? Can you clearly define what you sell to your clients? And that's not just a marketing question because we can have a pretty marketing brochure, but what do you sell? And scarily, the answer more often than not isn't clear. If you can't define what you sell clearly enough, then how are your clients supposed to understand?

James Steel: So some of the best performing MSPs then, what are some ideas around a good sort of portfolio setup and understanding what it is you sell?

Maria Armstrong: So the first step is figure out what we sell today. Put it down, write it on paper, the old fashioned, put it on a spreadsheet. Write down what you sell today, every single thing you sell.

James Steel: Literally products and services. We talk about professional services here as well.

Maria Armstrong: Absolutely, products, services, everything you do sell, everything you could sell. Where are the gaps? Why aren't you selling them? And is that because you don't have the skills within your business? What would it take to upskill your team to sell those things, to deliver those services?

If we're looking at a gap analysis there, is it simply, well, I need to send my engineer on that training course and then I can deliver that professional service. How much of a difference would that make financially to you if you could sell a particular service to every single one of your clients or 50% of your clients because you took an engineer and sent them on three-day training course.

So these are all things that if you don't know exactly what you're selling and not selling today, you're not going to be able to do that forward planning to then go and sell it to your existing client base.

James Steel: So help me understand that then, so that makes a lot of sense. We also talk a lot about the importance of being focused on the things that really generate you the money. How do you whittle it down to what makes sense for the business and the course of customer base?

Maria Armstrong: You need to know who your customers are. Do we actually know the businesses? Do we know who we're selling to?

James Steel: How do you get to, how do you do that? Because that sounds like a lovely concept. How do you dive deeper and actually understand where, how you start aligning services with that?

Maria Armstrong: So the first part would be segment them. Let's say that we look at it and we say, well, actually some of our clients are making a lot more phone calls than we think. So they're costing us money because they're costing us a lot of time. They shouldn't be because logistically, should be the same as the other client who has the same number of staff. Their price is the same way. What's going on there? There's obviously an issue there. But if we don't know what we're selling and who we're selling to, we're not going to understand that there might be an issue in their business.

And that's the first step is ranking the clients just on paper. Are they profitable? Are they not profitable? We've segmented them based on vertical, based on size, and we've had a look at them. The next step's a little trickier because we have to find out what drives the business owner, and we can't do that on paper.

James Steel: Okay, so it's time for some human contact essentially, I'm guessing here. This is the point at which you dive in and have a deeper conversation with them. If I'm an MSP and that's not an area that I really excel at, what should I be doing to really get down to the sort of the real understanding?

Maria Armstrong: Most MSP business owners I speak to think I love technology and I love helping people. That's the driver behind an MSP business owner more often than not. What is the driver behind your client? And the driver can't be money. The driver isn't money.

So is there a key business driver that they want to help people? Is it that they are problem solvers? Are they really risk averse? Are they really risk averse business owners? Because that's going to make a difference to how you position a new product as well. If you say, I've got this great new product that's gonna help you scale your business and grow your business and da da da da, and they're really risk averse, that's not going to land very well.

James Steel: That's a fascinating area, isn't it? The whole mindset of your customers because you're right, if you go in there with the wrong message, you're going to miss the mark completely.

Maria Armstrong: I did a presentation last year to a room full of MSPs and I asked, who here thinks you're a salesperson? And I think three people out of 100 put their hand up.

James Steel: I am shocked and stunned, Brian.

Maria Armstrong: And I said to them, I'm not supposed to tell you you're wrong, but I'm going to do this right now. You're all wrong. As business owners, their job is to sell the concept of their business. As business owners, that is your job to be constantly selling, even if you're not salespeople. MSPs are problem solvers. And that's all this is. We're just asking questions to find out more information so we can solve a problem.

James Steel: This is good. So I think we've really set the scene nicely then. So we're sort of understanding what we sell and who we sell it to. So do you have any examples of maybe companies that you've worked with perhaps that have done this particularly well that we could talk about? Is there any that I'm thinking maybe that have gone through that process of like, okay, what potential revenue streams could I add to my portfolio?

Maria Armstrong: Working with an MSP, we've recently done an analysis of everything they sell and everything they don't sell, where their gaps are. In the industry it's commonly called the white space analysis. Basically where the gaps are is your white space.

We did this analysis and because I'd originally said, what do you sell? They couldn't come up with an accurate picture. So we did the full white space analysis. And there were a lot more gaps than was expected. I was informed before the analysis was done, that of course, everybody had all the products or most of the products. And then once the analysis was done, it appeared that there was, in fact, most customers were missing at least two or three items, product or service that could be upsold to them.

And so the process has started. And the really great thing now is that's become the process. Now we've taken from the white space, we've looked at that, we've segmented the clients based on risk of how the messaging will land. And we've started by the MSP now contacting every single client to either increase their prices where price increases were needed, or sell them new products or services. And at this stage, 100% success rate.

James Steel: So in terms of the best ones that you've worked with, and these are good examples, when you think what good looks like, how are they sort of structuring their portfolios? How does a good portfolio in your mind look, if you had a blank sheet of paper and an MSP, for example, how would you sort of structure that?

Maria Armstrong: I wouldn't want anyone to be buying anything from anybody else, from my competitors. So if they're considering and going, I could get voice services from somebody over here... and so they might be buying managed services from me as an MSP. And then they could buy security services from somebody else and they could buy voice from another provider. I'm finding that everybody's kind of dipping into all sorts of areas. What's to say that the security provider doesn't sell them a managed service and I just lose a client?

James Steel: Are you seeing a trend at the moment of other types of companies moving into the managed services space?

Maria Armstrong: Yes. Now that's not happening with every type of company and it's not happening with every company. But if you're not controlling the client, the stickier the client, the less likely they are to walk out the door. So now I'm not saying you necessarily need to provide that security service if you don't have the scope, desire, capability to do it, but you need to control the relationship with the client.

So for example, you might have a partnership agreement with the security provider. You control the relationship with the client and outsource the security services. But the partnership is between you and the security provider rather than between your client and the security provider. So have a think about that. Partner, partner for success because the MSP industry is small, we should all work together, and you can't deliver everything.

James Steel: I think that's a really important point, isn't it? I think that's it. But like you say, it's owning the line of communication and the relationship there.

Maria Armstrong: Your skillset is in knowing the client, knowing what they need, understanding their business, understanding the technology landscape, where it's going and how you can support your client and advise your client to what comes next.

James Steel: Yeah, that sounds like absolutely solid advice. Listen, I'd like to switch up very slightly and talk about sales process for a second, because I know you've got extensive experience in the sales arena as well. So, what does a bad sales process look like? You don't have to name names, but are there any particular MSPs that you've worked with where you've got in and you've just thought, well, this is less than ideal?

Maria Armstrong: What does a bad sales process look like? Often I will go to an MSP or I will be chatting with somebody and I'll talk about, say something along the lines of, oh, what does your sales opportunity board look like? And I'll just get a blank look. This comes back to what are you selling? Their sales opportunity board they're not using in any format. So if they have a PSA, they're not using the opportunity board in their PSA. If they don't have a PSA, they're not using an opportunity management of any sort, even in a spreadsheet to keep track of who they're selling to, what they're selling.

James Steel: Why is that so important?

Maria Armstrong: So if you think about this, I go out and I see a client today and have a great chat. Fabulous chat with the clients, really good. Client says, do you know what? This is brilliant, Maria. Send me a proposal and I send the proposal. And then I get really busy and I go off and I do a whole lot of other things. Not keeping track of that in one central place and being able to report on that really easily means that it can get missed.

The other thing that's really important with the opportunities board is knowing at what point are we losing with the sale. At what point is there a delay in my sales cycle? If we can look at that, we can then start to say, what can we fix in our sales process? There's something falling over.

I mean, if you're looking at your existing clients, so we're not even looking at prospects at this point, we're looking at our existing clients, I'm going out to see my existing client, and I want to talk to them about the fact that they were going to be putting their prices up, or we talked to them about the fact that I really love to sell them this new security service we're selling. We start to go through the process. At what point are we getting stuck? Do I send them the proposal and then they sit on it for a while? We need to know, is it our pricing? Is it their decision making? Knowing where the delay is, wins by knowing at what point our sales process is falling over.

James Steel: Where do most MSPs get stuck with their sales process? When you go into an MSP and you're looking to help them out, are there some commonalities there with some quick wins that you know you're probably going to be able to make just from the experience that you have?

Maria Armstrong: Where they're getting stuck. So most of them don't have their opportunities in one place. So if they have an opportunities board, will often hear the, I'll say, right, show me your opportunities. And they go, okay, cool. So we've got some over here and we've got some over here and we've got some over here. And I go, is there one single pipeline of opportunities? And they go, yeah, we've got them in multiple locations depending on what we're selling.

So very often I'll see, if it's an upgrade or a new piece of hardware for an existing client, it will sit in the PSA. But if it's a proposal for a new client, it'll sit in a CRM system or a quoting tool outside of the PSA. So it won't be in the same place. But it means that they're tracking things differently and they lose focus because they're keeping, or they're not focusing on the one spot. They're splitting their focus. So that automatically causes a problem.

James Steel: How often should we be looking at that opportunities board and who should be involved in that process in an ideal world, would you say?

Maria Armstrong: There's a number of people who can actually get involved in looking at a sales opportunities board. It's not just used for sales. I mentioned earlier, you know, would we send our engineer off on a training course to upskill them so we can deliver a certain new set of projects? What if our sales team got really enthusiastic and sold a whole lot of projects and we only have one Azure engineer and they want to go on a long holiday?

What if our pipeline shows that we're going to close all of those projects between now and the end of March? This becomes a problem. So that can impact the whole business. That doesn't just impact dollars in the bank because that then impacts the clients and how they feel about us. And that's where we potentially lose clients because they have a poor experience.

So the owner should be looking at this, even if they've got a sales manager who's managing all of this, that should be looked at and then shared with the service manager, with the project manager. We should be looking at filtering out through the business.

James Steel: Yeah, that's such an important resource for the whole team, isn't it? It's interesting to see it framed like that. In terms of other revenue opportunities, are there any other areas where MSPs potentially could be being more profitable, would you say, or generating more business, being more efficient with their existing customer base that you see as a kind of quick win?

Maria Armstrong: Have you analyzed whether you've raised your prices recently? Have you checked that that price rise that came from a vendor recently or something along those lines actually got passed through? Because if you haven't, you're the one wearing the cost. We did an analysis with one of the MSPs we worked with and found that they had missed doing a price rise for over a year and been wearing the quite hefty price rise from the vendor.

James Steel: And is that just case of not tracking when the costs are increasing? Or is it just a case of knowing and not wanting to face it?

Maria Armstrong: Usually it's not tracking. What we find is that five years ago, four or five years ago, bundling was all the rage. We're going to bundle everything and we're going to sell everything as a bundle, which is great. Don't get me wrong, I'm not arguing with bundling. It makes it easy for our clients to understand. Here's how many dollars you're going to pay.

So from a marketing perspective, absolutely sell it as a bundle. But when we come to the agreements and our line items, we need to split it out because the vendors might change their prices. Or if you're not based in the country that the vendor comes from, we've got fluctuations with exchange rates.

So somebody has to wear it. And unfortunately, the MSP often ends up wearing it if they haven't written it into their agreement with their client. So that's an easy way that they can very quickly make themselves more profitable by assessing all their agreements.

James Steel: That's a lovely tip, isn't it? Because just that concept of making sure you've split out your bundle at the back end, I think that's really, yeah, that's critical, isn't it?

Okay Maria, so at this stage of the episode we'd like to have a segment which we call Industry Manure. So this is all about industry advice that you personally think is kind of really a crock of shit. Anything you'd like to dispel, what have you got to share with us?

Maria Armstrong: I work a lot in the cyber governance space. And so I hear a lot about cyber that isn't accurate. I'm not going to go into that tonight because so much of it is a mess. And I'd rather people didn't talk about cyber if they didn't understand it.

But the one I actually want to talk about is sales, because we've been talking about sales tonight. The myth that I'd like to dispel is you can only grow your business through new customer acquisition. And it's a load of rubbish. I had a stand-up argument at an industry event with a business development manager, and I have said that you can grow your business at a very rapid rate using account management strategies. And they have said, you absolutely cannot. You have to use BDM strategies. So I'm calling it out. It's a load of rubbish.

James Steel: I love that one. That couldn't have been any better for this podcast really. So thank you very much for that. Excellent. Listen, we've also got another segment, it's our Pass the Pitch Pork, which is basically a guest asks our other guests a question. And this is Juan Fernandez's question. So he was asking, MSP 5.0. And we've got no clarification around what that actually is, but just MSP 5.0 - what does it look like?

Maria Armstrong: I don't have my crystal ball, but I imagine that we are moving towards being advisors, less hands-on technology providers. The robots are going to come, the robots are going to take our jobs as technology solution providers.

But they can't come for the advice. They can't come for the account management. They can't come for the human to human interaction where we work with the clients and we help them plan their business around the technology that can support and help grow their business, and maintain the business and secure the business. That's where we come in. It's still problem solving. It's using technology. It's still understanding the technology, but it's advising the clients.

James Steel: Yeah, certainly I think in the short to medium term there will always be that layer, won't there? Who knows where it's going in the future, as you say. Do you have a question for our next guest?

Maria Armstrong: Yes, I do. I'd like to hear how the next guest thinks AI is going to impact sales. How it's going to impact salespeople, how it's going to impact the sales process. Is AI going to impact us as sales people, positively, negatively, is it going to impact at all?

James Steel: Wow, you've opened a massive can of worms there. Thank you for that one. Maria, thank you so much. You've given us loads of gold there, loads of tactical tips that we can implement in our businesses tomorrow. So I really appreciate it. Thanks for spending some time with us and we'll see you very soon.

Maria Armstrong: Thanks, James.

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