Are you leaving money on the table?
This year more than any other, MSPs are facing pressures to be flexible with clients and adjust to economic uncertainty. But the line between being customer friendly and doing yourself a disservice can get blurry in a hurry, and all too often MSPs find themselves giving away too much.
In this installment of our MSP Live Chat series at NinjaOne, we teamed up with MSP growth expert Chris Wiser to dive into the trends he’s been seeing and the key things that have separated those MSPs that are booming from those that aren’t.
In this recap, we’ll share the full recording and transcript along with easy-to-skim highlights, including:
- The best way to avoid a pricing race to the bottom
- One of the worst habits that good-intentioned MSPs need to break
- Whether or not to give free assessments
- How to shift client focus away from cost and onto risk
- And more…
What Are MSP Live Chats?
We launched the MSP Live Chats series to give our partners a forum to connect directly with each other and top experts in the channel. These sessions aren’t about being talked at or presented to — they’re fully interactive and built around active participation. So come join the discussion!
You can also see the full list of past chats and upcoming ones here.
Recording
Hosts and Guests
Jonathan Crowe
Director of Content and Community at NinjaOne
Tom Watson
Channel Chief Advisor at NinjaOne
Chris Wiser
Founder and CEO of The Wiser Agency and 7 Figure MSP
Highlights
- Welcoming Chris Wiser of The Wiser Agency to his first-ever MSP Live Chat
- Video: 00:36
- Transcript jump
- To avoid being commoditized, MSPs have to sell on reducing risk
- Video: 2:48
- Transcript jump
- Story time: On avoiding putting your business at risk by letting clients dictate what’s included in a package
- Video: 11:37
- Transcript jump
- A detour into why you should stop selling F.U.D. (fear, uncertainty, doubt) and start selling a solution
- Video: 14:10
- Transcript jump
- Why giving things away for free sets a bad precedent — and how to make your managed services “sticky” instead
- Video: 18:53
- Transcript jump
- With security in the news, it’s the best time ever to be an MSP
- Video: 26:37
- Transcript jump
- Assessments — Should MSPs be giving these away?
- Video: 32:02
- Transcript jump
- Back to mitigating your own risk using insurance and MSAs
- Video: 38:15
- Transcript jump
- Setting your MSP up for success with long-term, auto-renewing contracts
- Video: 46:18
- Transcript jump
- Answering the big question: Is $600 per seat really possible? Plus, how to raise your price with clients
- Video: 50:58
- Transcript jump
- Wrapping up and ongoing resources
- Video: 59:02
- Transcript jump
Bonus materials
- Chat Agenda
- A free, four-hour sales training recording from The Wiser Agency
- Free MSP pricing calculator and MSA template
Transcript
Jonathan: All right. Hey, everybody. Welcome back to another NinjaOne MSP Live Chat. Great to have some familiar faces I’m already seeing in the chat. And also Tom, it’s good to have you back as always.
Tom: Thank you.Jonathan: Tom is our Channel Chief Adviser at NinjaOne. Special guest, guys, Chris Wiser, founder and CEO of The Wiser [Agency]. Thank you so much for joining us. It’s so good to see you here.
Welcoming Chris Wiser of The Wiser Agency to his first-ever MSP Live Chat
Chris: Emphasis on special, I think. Good to see you, guys. Thanks for having me so much today. A big fan of Ninja. A big fan of both of you guys. So, I’m looking forward to this. It should be a lot of fun.
Jonathan: Yeah, absolutely. And for those who aren’t familiar with Chris, which it’s hard to believe that’s the case now, he is super, super active in the community. You can find him over at the IT & MSP Business Owners Group on Facebook. That’s up to 10,000 members now, which is pretty insane. Chris and I were talking before the chat, earlier in the year it started around, like, maybe half that. So, awesome growth. Chris has a ton of videos there. Really impressed with everything that you do there.
I’m gonna back up a little bit. I’m Jonathan Crowe. I’m a Director of Content and Community here at NinjaOne. And for those of you who are joining us for the first time, who haven’t been in a live chat, pretty informal. We’d like to get in here, be very, very interactive. Please use the chat that you see over there on the right side of your screen. If you have a question that you want us to answer, make sure you use the “Ask a Question” there down at the bottom. You can always use the chat, but if you have a question, it could get lost in there. So, make sure you use that. We’ve got a poll section that will launch a couple of polls later. You’ll also see down here at the bottom we’ve got a special offer from Chris. He can talk about that in a little bit. I’m going to share one more time with you guys the link to our agenda doc. I see people are already jumping up in there. That’s great. This is going to be a doc that has links to various things we mention. It’s also gonna be a loose agenda doc. We’ll see where the conversation takes us.
Chris: Yeah. If you put me and Tom in a room, it’s gonna be a mess, probably.
Jonathan: Exactly. Exactly. And so I’m gonna back up and get out of the way from you two guys. I’ll give you a couple of prompts. One last housekeeping thing. Yes, this is being recorded. In fact, as soon as the session is over, you can just refresh. It’ll take a minute or two and you’ll have the recording right there. But thanks, everybody, again, for joining us. Now, to kick things off, Chris, like I mentioned, you’re super active in Facebook. You do recordings, live streams like a couple of times a week. That group has been building and building throughout the year. Walk us back a little bit. What’s been going on? What are the bigger trends and conversations you’ve been seeing play out kind of throughout this year? And where are we now?
To avoid being commoditized, MSPs have to sell on reducing risk
Chris: So, it’s kind of interesting because, you know, we see… And so you guys all know what I do. You see me, I got my life, that’s a 7 on my shirt that’s a #7figuresforlife mindset. One other thing… I owned an MSP for 10-plus years. I was up in Milwaukee, I live in Austin, Texas now. Got out of winters. It was really the whole reason that we came here.
Jonathan: Smart.
Chris: But one of the things that I saw in the MSP industry, as I was an MSP — I was a one-man shop, so, just like most of you that are watching, I was a tech guy in the trenches at some point. We watched the market kind of change over the last, I’m gonna say, even 15 years.
Going back 15 years ago all the way up to almost… Most MSPs are still selling this way. It’s very commoditized. When we talk about that, what does that mean? We’re selling on a price point with a specific product and it’s being decided on mostly by a price point. Now, we don’t want the clients to decide that way. But for the most part, that’s how the sales is being delivered, that’s how the product is being… That’s how it’s being communicated to the prospect. And when price is the lowest common denominator that they see, that’s what they usually choose.
So, one of the things that we’ve done in our 7 Figure MSP program is to help MSPs add cybersecurity to their stack, focus on moving away from that commoditized model into a risk model. And the biggest trend that we’ve seen over the last, I’m going to say, 12 months now going all the way back to… No, we’re almost to the end of 2020 right now, COVID year, almost the end of that. But we’ve seen a massive trend that the price point can almost be controlled. Like you can almost go into any client and… We have clients that are… I had a guy that was in Detroit, selling in Detroit, big major metro, selling at $25 per seat over $250 to $300 per seat now. And what’s the difference? It’s how he’s selling, it’s how he’s delivering. He’s making sure that he’s focusing on a risk metric and talking about those risks and communicating that to the prospect, versus just relying on “Here’s all my traditional IT stack, etc., etc.” and then letting that be the factor. So, that’s probably the biggest trend that we’ve seen. Cybersecurity is here to stay. It’s gonna be a massive piece, but you have to sell differently to communicate that to your prospect. Otherwise, they’re gonna buy the same old way.
Jonathan: And I see we’ve got a few people on the chat talking about how. they’re members of the group, so they’ve seen what you’ve been coaching them. They’ve had an awesome experience. That’s cool to see.
Yeah. I mean, you mentioned that price point. For those who have been following along with our Live Chat series for a while now, you guys will know that we had, a couple of sessions ago, we had George Bardissi from bvoip on. We talked all about pricing. And a lot of that conversation was around… For the folks who are down at a lower price point, you know, it’s one thing to hear, “Okay. Yeah, I should be charging more. I should be going after bigger clients.” But really finding that bridge of how do you make…how do you get from those two points? I mean, I think it’s still kind of a hard thing to really grapple with, especially if you’re not in a major metro area, you’re struggling to find clients.
Chris: Well, and I will say that’s actually probably the first misnomer.
My head sales trainer, Cindy Phillips, did a study a few years ago that we were able to see that there is zero impact between where you are in the United States. And I understand somewhere around the world, there are some impacts. I’m talking specifically about the states here. But, United States, no matter where you are, there’s no difference. The market doesn’t control what the price point is. It’s the belief here mostly, it’s also the MSP market, kind of, dictating that. And the biggest way to move past that is to stop selling your…stop selling your stuff, stop selling the stack, stop selling the tech gear. Your decision-makers don’t care about that. If you think about… And let’s just take a quick segue into insurance.
“Stop selling your stuff. Stop selling the stack. Stop selling the tech gear. Your decision-makers don’t care about that.”
Chris Wiser, Founder and CEO of The Wiser Agency
What’s the ROI on insurance, John? Zero into one. Zero into… Right? But still… But even with zero ROI, and the reason I say ROI is because almost every MSP goes back to their clients and says, “Well, I can get you ROI on this and I can do this.” That’s how they’ve sold for so long. But at the same time, all of these prospects, nationally — even in all North America, are buying liability insurance. It’s a line item that they have, number one, how many businesses out there that don’t have liability insurance, but what’s the ROI on it? But they still have it as a line item. Why? Risk.
So, having that discussion with your client, talking about risk and making sure that you’re analyzing what the risk looks like and showing them that that risk is real and what’s… It’s tough. I understand that it’s tough because of COVID, the pandemic, but the risk is real. We all know it’s real. Hackers are real. I have a… My wife’s 88-year-old grandfather lives with us and we have a caregiver that’s full-time with him. She got hacked literally yesterday while I was on a webinar and went to Walgreens and bought, like, $400 worth of gift cards because she thought that she was gonna be like… That stuff’s real. It’s happening to everyday people along with all their businesses. So, the risk factors are out there. You just have to take that and bring it in front of your clients so they understand it. And when that risk hits, emotion ties in, and they’re willing to pay more. That’s the biggest thing that we’ve seen. And that’s how you tie from that price point that you used to pay.
“The risk factors are out there. You just have to take that and bring it in front of your clients so they understand it. And when that risk hits, emotion ties in, and they’re willing to pay more.”
Chris Wiser, Founder and CEO of The Wiser Agency
And here’s one quick other thing. Jonathan, you can attest to this. Are the tools we’re using as MSPs the same tools now? Were they different six, seven years ago; or even six, seven months ago? They’re all different. Ninja has evolved massively in the last year because they’re having to move towards what are the threat vectors. That’s all stuff that has to be communicated down to your clients. It’s okay to tell them, “The times have changed. My tools have to change. I have to control this differently. AKA, we are gonna have to start charging a different rate.”
Jonathan: Yeah. I mean, really good point there. And Tom, if you wanna jump in and maybe bring things back to our last chat session, we talked with Ken Patterson from Pax8. And we were speaking all about building out your stack. And hitting this point of tools have changed has become increasingly… I mean, everyone’s stack is just growing, growing, growing. And what you’re having to invest in as an MSP to really compete and get out there is changing. So, yeah, why wouldn’t that change your price point with your clients? But Tom, do you wanna speak to that at all?
Tom: Yeah, absolutely, it has changed. And I think that Chris and I both have similar experience in terms of when we had our MSPs and we kind of exited that being, like, around four or five years ago. And it has changed. I mean, the stack looks different now. But I look at it and I go, “If I did it again,” which you all have heard me say many times, “What would I do?” And it wouldn’t be any different because I didn’t sell the stack. I sold my relationship that I was developing with that client that I was gonna be there, that my team was gonna be there, that we were on top of things, that we were monitoring things, and that when, you know, things went down that went bad that we’re gonna take care of it. I didn’t get into the particulars.
“I sold my relationship that I was developing with that client that I was gonna be there, that my team was gonna be there, that we were on top of things, that we were monitoring things, and that when, you know, things went down that went bad that we’re gonna take care of it. I didn’t get into the particulars.”
Tom Watson, Channel Chief Advisor at NinjaOne
We had a great discussion before this started. Chris and I, we were talking about how, you know, all these tools is not what you sell to these higher-ups. You’re gonna sell your overall solution and your relationship over anything else. And going back to what Chris said too, there’s been a lot of discussion on past chats in here about pricing where you are, and yeah, I’ll be honest with you, $25, $30 per seat is not okay. I mean, I don’t think it’s okay anywhere. And I don’t know, Chris, if you wanna talk about that a little more. But getting those prices up, realizing that no matter where you are, you need to be charging enough, one, that it’s serious business, that people take it seriously because if you’re charging a low amount, they’re probably not taking you seriously in the relationship and you’re probably not able to have the right tools and the right level of service you’re gonna provide.
“If you’re charging a low amount, they’re probably not taking you seriously in the relationship and you’re probably not able to have the right tools and the right level of service you’re gonna provide.”
Tom Watson, Channel Chief Advisor at NinjaOne
Chris: And I think, you know, one of the things I’ll say to that, and just so you guys know this, we had over 1,000 applications come into our program in 2020 so far. We take what their MRR is and we look at what their total average seat price is averaged around the world at $63 per seat, just so you guys…everyone knows that. We’re kind of where the average is. It’s mostly North America, but there’s still some Australian, some U.K in there as well. And what Tom said is very accurate there. And I think what you got to be careful on is when you start to talk about… And I understand that we’re talking about what does your seat cost or what are we charging for? But as we’re communicating that down to our prospects and our existing clients, you need to sell to the solution, sell to the problem you solve. Don’t worry about giving them per seat things, per line item things. My suggestion is analyze the whole deal, analyze the whole kit and caboodle, package that up, and sell that to them for a single flat rate.
“You need to sell to the solution, sell to the problem you solve. Don’t worry about giving them per seat things, per line item things. My suggestion is analyze the whole deal, analyze the whole kit and caboodle, package that up, and sell that to them for a single flat rate.”
Chris Wiser, Founder and CEO of The Wiser Agency
Story time: On avoiding putting your business at risk by letting clients dictate what’s included in a package
Chris: But another factor that MSPs do a lot, and Tom, I know you can relate to this, they get a price objection from their prospect. So, what do they wanna do immediately? Instead of dealing with and handling that price objection, “What can I pull out? What can I pull out? What can I pull out?”
Tom: What can I give you?
Chris: Correct. “What can I give away?” We’re gonna breach into that what to not give away. The biggest thing you cannot do anymore is you cannot sacrifice your stack. You cannot sacrifice your standard MSP offering and you surely cannot sacrifice your standard MSSP offering — your cybersecurity offering — because the second you do that, you’re opening up liability, you’re opening up all these variables, and we’re seeing real lawsuits coming down to MSPs right now.
“The biggest thing you cannot do anymore is you cannot sacrifice your stack. You cannot sacrifice your standard MSP offering and you surely cannot sacrifice your standard MSSP offering — your cybersecurity offering — because the second you do that, you’re opening up liability.”
Chris Wiser, Founder and CEO of The Wiser Agency
Jonathan, we were talking about some of the hacking groups and some of that stuff in our green room today. The MSP community is being actively targeted. So, you have to be super careful. And we’re seeing real lawsuits that are happening now from insurance companies. This is one that came to me. I’ll just tell a quick little story here. We had one that came into us as a prospect. He had come out of a recent client breach, and it really was no fault to the MSP. He sold them a firewall, a hardware firewall, sold them a firewall where they had a breach in a ransomware scenario. They filed an insurance claim. The insurance company came back to the MSP and said, “Yeah. Why did you… We found you negligent.” So, the insurance company from the client said, “We think you’re negligent.” Why? Because you knew better than to sell somebody like this just a plain firewall that’s not gonna be updated and it’s not gonna be managed. The liability is… And granted, are they gonna win that in court? No. But what does it take to sue an MSP to its knees? Not that much. So, it’s all those things you have to think about as you’re pricing this stuff out. It’s a major change and it’s also how you deliver that price point and that solution to your prospect.
Jonathan: Yeah. I mean, that’s a great point. And we’ve had Justin Reinmuth from techrug.
Chris: I know Justin very well. A great guy.
Jonathan: Yeah. Yeah. And so we had him on a previous chat, to talk about cyber insurance. And techrug is a great thing to check out if you guys or anyone on the chat is interested in finding out rates and things like that. But he brings up all the time. One way to talk about this is to move it away from you. This isn’t just your decision here as an MSP as a service provider to avoid liability. There are standards that you can point to. So, whether it’s pointing out NIST or other things, just say, “Listen, these are the things I need to provide in order to keep my license, in order to avoid liability.” So, it’s not just coming from you. It’s coming from, like, a higher power.
A detour into why you should stop selling F.U.D. (fear, uncertainty, doubt) and start selling a solution
Chris: Yeah. Yeah. I totally agree with that. I think you just have to be very careful. Moving this away from a… I like that mind… I’d never… He’s never… Justin has never said that to me, but moving away from a “me, me, me” thing onto a… And this also goes into that risk discussion. All those things come into play.
I saw somebody put into the chat about F.U.D. If you guys don’t know what F.U.D. means, it means fear, uncertainty, and doubt. And it kind of comes into that as well, but I think you gotta be very careful with that because I’m never a fan of selling on fear specifically. I like to show a prospect, here’s the real risk you have. This is real. It’s not fear. It’s not fear of the unknown, which is not tangible. You can’t equate to that. This is real risk that you have in your business. How do you wanna deal with it? What do you wanna do about it? Because the factor is, that client, more than likely, is assuming you’re protecting them from that already. I think every one of you, if you ask anybody that’s watching right now, we have hundreds of people watching, anyone that’s watching, if you go back to your prospect or your client and you say, “Hey, you guys have a ransomware outbreak. How do you wanna deal with it?” They’re gonna be like, “You tell me. You’re the IT guy.” They’re assuming you’re handling it already. So, what are you doing to talk to them about that and put those pieces into play so you can then charge them properly?
“I’m never a fan of selling on fear specifically. I like to show a prospect, here’s the real risk you have. This is real. It’s not fear.”
Chris Wiser, Founder and CEO of The Wiser Agency
Jonathan: I’m gonna bring up… Yeah, that’s great. I’m gonna bring up a couple of things.
So, you mentioned these attack groups. I’m gonna share my screen here, just a second. Make this the focus. So, not to get too…. I mean, we’ve mentioned fear, uncertainty, doubt here. Not to get too scary. But here’s a coo… I use the word cool, but it’s also just kind of a creepy article. This is an interview with one of the major ransomware attack groups that’s operational today.
This is REvil. They’re also referred to as Sodinokibi. Maybe you’ve heard of those guys. They were behind a lot of high-profile attacks, including attacks on MSPs maybe earlier last year. But they have this quote here. Look at this. They’re calling out MSPs by name. And so just to make sure that this is a real threat, not just on MSP clients but MSPs themselves. These groups know that MSPs are great targets. They’re actively looking at them. So, that’s just something else to make this real.
Now, going back to the point of fear, uncertainty, doubt, Chris and Tom, there’s a… Chris, you used insurance as another analogy, taking things out of our initial space. I, last year, sold my house. And as part of that process, I had to have an electrician come in to do some work. And I had a few different ones come in. The first guy who came in tried to put the fear of God into me. And for a while he did. He basically said like, “This is an old house built in 1900. There’s been tons of patchwork. This is a disaster in the making. Your house is gonna burn down tomorrow night with you and your wife and kids. You’re all gonna die.” basically. And he had an astronomical price. And what it did for me, though, I mean, it was somewhat effective, I was concerned, but it also made me step back and say, “I have to get a second opinion. This is just crazy. Is it really like this? I need to get, like, another voice to say, ‘Is this rational or not?’ ”
Chris: That right there is what F.U.D. does. That, literally that.
Jonathan: And so really, I mean, the result… I started associating that guy with the big scary problem, not the solution. And the guy we ended up going with was the guy who took a much more rational approach of, like, “Look, yes, here are the real concerns, but here’s the path forward into actually getting you into a good spot. We don’t have to do it right away. We can make things work depending on what your budget is, but here’s the clear plan.” I sort of associated that guy not with the big scary problem, but with the friendly, practical solution.
Chris: And he was the expert that, it sounds like, you trusted yourself with.
Jonathan: Absolutely.
Chris: Yeah. So, I think that’s a really big factor, and it’s huge here. Think back to how all of you are selling your MSP services right now. Half are sending rate cards. They’re literally, “I want this.” “Okay. Here’s our pricing.” That doesn’t help anything because you’re not being consultative. You see what Jonathan was just talking about there, he had a guy selling F.U.D. and then potentially giving him this astronomical price, but then in another guy, it was consultative. So, you need to bring in and actually show them that you’re an expert, sell them an assessment. And Tom, let’s get into the whole what to give away and what not to give away discussion, too, because giving away assessments are very risky. There’s all these other factors because it sets the tone for the rest of the relationship. When you’re giving away things for free, you’re legitimately making that the common point of the relationship. Do you agree with that? Thoughts on that?
Why giving things away for free sets a bad precedent — and how to make your managed services “sticky” instead
Tom: Yeah, absolutely. My big thing is, is using that word free, it’s not something I wanna get into with prospects or clients. It sets an expectation, it’s unrealistic because anything you give away for free has a cost for you, whether it be service, whether it be products.
And we had a great discussion before this. We talked about how do you and when do you do that? And, Chris, you had a great point that it’s about bundling. And this goes back, I think, to what you’re saying about, you know, your stack, what you provide those in clients, those assurances, how you sell it, that you need to be strategic with how you place things that may be a cost to you that you give away in order to get something later on.
Chris: Yeah. And I think one of the things that’s really key with this… And one of the challenges I know that you as MSPs are thinking about, you’re sitting on the other side of the screen saying, “Okay, but I can’t say no to clients. I have to use this as a way to get in.” This is part of the reason… I kind of call this the MSP wheel of death. That’s what I call it.
What happens is MSPs start out their… In the beginning, you wanna get as much business as you can so you take on clients. You don’t have a lot of avenue. You’re also a new client, so you use pricing as a way to get in. Then you get clients, you get clients. And you get to about 100 seats, 150, 200 seats, maybe. And you’re still the guy doing all the work. And it becomes this point where you have too much work, but you’ve not charged properly, so you can’t hire somebody. And then you have to find more people and you’re desperate, so you’re doing all the work, and it’s this giant wheel. And so if we go all the way back to making sure that you charge properly, don’t give things away on the launch, be really careful about that.
And I understand you may be in a place where you already have clients, you’re kind of at that 100, 200, even 500, 1,000-seat range, but you’re still not making proper cash flow. So, you have to be careful about how you’re doing this.
And when we talk about the term bundling, this is what Tom was mentioning, instead of saying, “Hey, I’m gonna give you this free network assessment,” you can do ways to make it so it’s chargeable. If you’re charging properly, you can make sure that it’s chargeable. You can also take that off of the onboarding fee as they sign, but it gives you reputability as a real business.
Every professional service that we go to… if we go to have a consult with an attorney, they don’t give… Almost no attorney, especially if we’re going to them, gives us a free consult out of the box. The traffic guys do. The personal injury guys do because you know they’re gonna take a percentage and they care about that. But the guys that are real litigation attorneys, every minute is billable. They bill in 10-minute increments, right? That’s how they think. The only professional services industry out there that bills or that gives stuff away and doesn’t bill is MSPs. Why? Because we’re kind of desperate and we’re selling on a commoditized path.
“But the guys that are real litigation attorneys, every minute is billable. They bill in 10-minute increments, right? That’s how they think. The only professional services industry out there that…gives stuff away and doesn’t bill is MSPs. Why? Because we’re kind of desperate and we’re selling on a commoditized path.”
Chris Wiser, Founder and CEO of The Wiser Agency
Tom: Yeah. Chris, I was gonna point out earlier that I would never call it free to the client, but I would bundle things in. And I’d look at things like, “Wow. I’ve got this, you know, potential prospect and we’re looking at a lot of work on the frontend to get them up to speed. But hey, they need a new server too.” And so I would do things like rolling a server and I would keep… I might roll a server in, but I put it under the agreement and I call it hardware as a service and I’d include it, but I’d tell them, “Hey, listen, to get you through this, I know you don’t have the money for a server, but what we’re gonna do is up it monthly a little bit.” And I would give those things to get the deal signed.
But I would make sure that I can always tie an end-profitability to whatever I gave up on the frontend. And that’s the key thing. But I look at… And I’m sure, Chris, you can remember this, too. My first two years of business, I just wanted to get clients. And I would be like… They would be like, “Well, I can’t afford this and this,” and so I’d be discounting services, I’d be giving them hours away for free. I wouldn’t even be recording things. And that’s where I say, you know, “You’ve gotta look at those things,” because you give away things like that on the frontend, it might be years until you make that contract profitable.
Chris: And the other factor with that is if you’re not bundling in and making it a line item that you just talked about, what does the client think about it? They don’t even appreciate it because they don’t see a cost associated with it.
Tom: Yeah.
Chris: So, even if I was going to bundle something in or show any of these things, we would surely…or if we were gonna give a nonprofit discount or any of these different things, we’d show them on the invoice, “Here’s what our monthly cost is for this,” then we reverse out the nonprofit discount to show what it is. So, you have to make sure that you tie… And Tom, I agree with everything you’re saying there. You have to make sure that you tie all of those things back to a cost and a price that your prospect and client can see.
Tom: You know what I would do? Chris, what I would do is often I had these low-cost servers, and I had a lot of, you know, clients at right around $1,500 a month. But I would have a server that I picked up for, like, $700 bucks that would fit the need of, like, a very small network under 10 users. And what I would do is I would figure out, if I gave them that server and I charged them $1,500 bucks a month, how would I look at when that server was paid off? And what would that profitability look like if I try to assume all of that cost to that server in the first six months? And then when does that contract become profitable? And what I shot for was every contract, if I was giving things up on the frontend, I need to make sure that contract became profitable after about six months in.
“What I shot for was every contract, if I was giving things up on the frontend, I need to make sure that contract became profitable after about six months in.”
Tom Watson, Channel Chief Advisor at NinjaOne
And I base this on something I had learned early on. I don’t know if you all remember, but when Verizon started putting fiber optic cable everywhere, I knew — I had talked to people that worked for Verizon — I knew that they were losing money in the first two years of that, but they were getting people hooked by providing this high-speed service and fiber optic and the associated hardware. And I didn’t have the ability to take things that long in two years. But if I could get a contract profitable that maybe is hard to get into at first, but I gave up some things on the front end, but it became profitable over time and more profitable and tied that client to me. That’s the other thing, if I’m giving things up on the frontend, does it tie that client closer to me? Does it make it stickier? Does it make them harder for them to leave? Does it make them consider what they have to go through or what they deal with if there’s a problem with the service? I wanna make sure that we are tied, they’re gonna talk to me if there’s problems, and that we’re gonna have renewals and keep that going.
Chris: Yeah. I think you said a really key word there, which is the stickier factor. That is a really important thing because when you stay sticky and you stay… And what’s really important with this is, instead of you having to say, “I’m gonna make it so they have to stay,” you are gonna make it so they don’t wanna leave. That’s a really big factor. And Tom, it’s crazy that you say these things. I had a six-month factor in mind as well. Everything that we had was a baseline 36-month agreement with a 6-month to profitability factor, making an 80% margin. And that’s where the numbers that we were at.
“Instead of you having to say, ‘I’m going to make it so they have to stay,’ you are going to make it so they don’t want to leave.”
Chris Wiser, Founder and CEO of The Wiser Agency
Tom: Chris, we’re exactly on. And we’ve never even talked about this.
Chris: We’ve never talked about that. Yeah, that’s crazy.
Tom: Yeah. It’s exactly the same thing because I looked at it as if, I didn’t believe that, you know, growing my MSP, I didn’t believe everything had to be profitable right at the beginning. Now, I will say, when I first started out, I kind of needed it to. I didn’t have the cash flow. I didn’t have the capital to do these things. But as soon as I did, I realized that I needed to give contracts a time to age and that became more profitable over time.
Chris: Yeah. And my guess is you probably were meeting with your clients on a regular basis, too. The QBRs are a huge factor. We actually have shifted them now from a QBR to something that we came up inside of my program to now we are doing QSRs, Quarterly Security Reviews, which makes them a lot more mandat… And we make them mandatory as part of your agreements now. But as you’re meeting with your client every quarter, you’re reviewing these things and your goal should be to keep them on a long-term agreement all the time, revising your pricing, revising the things that you’re offering.
QSRs: Quarterly Security Reviews
Mandatory client meetings that give you an opportunity to review your offerings, revise your pricing, and continue your agreement
With security in the news, it’s the best time ever to be an MSP
Chris: Note that it’s the best time ever to be an MSP. Take COVID and throw it away right now. I understand that it’s there and it’s a factor, but there’s this thing out there called hackers, ransomware, cybersecurity that are making it the best time ever to be an MSP. Why? Because, finally, we’re at this point where your client has to recognize they need IT.
It’s not just a convenience. It’s not even just a nuisance. It’s not all these different things that they don’t care about and can’t equate to, but it’s really happening where their competitors, their peers, all these other people are literally getting shut down for days or weeks or having money stolen. That’s where you can put into this risk factor and have these things and you can have this discussion with them. And you can go back to your existing clients with a process or with a system.
And if you guys notice in that green button below this window where my free sales training that Cindy Philips, my head of sales trainer and I, did, we did this literally last Monday. And it’s a recording, you can go back and watch it. But we talked about all these different things in that. So, I’d encourage you to do that. It’s free. It doesn’t cost you anything. It’s just a bonus for being on today. But all that comes into play with having a sales process and selling properly. So, Tom, you and I are 100% on the same page. And it’s funny because we’ve never talked about this at all.
Tom: Chris, you know, one thing I was thinking about, you were talking about… And this move… I mean, since you and I were kind of active as MSPs, this move to security. And I’ll tell you one thing is that I would look at the security stuff and I would be… As you mentioned, MSPs are a target. I would not discount or give anything away on the security front. I would beef that up. I would sell to that risk, to some degree. I wouldn’t try to scare people with it, but I would have that bundling very set and I would really watch out on what I skimped on when it came to that.
Chris: Yeah. I think you’re spot-on with that whole thing. I think you have to be ahead of that curve. And the thing that we get a lot from MSPs is, “Yeah, I have 20 to 30 to 50 existing clients. They’re the last people that I wanna convert into cybersecurity. I don’t wanna go back and have a conversation with them that I need to put different things in, or I’m not charging properly and I don’t know how, blah, blah, blah.” So, they just skip their existing clients. First of all, they have to be the first people you’re talking to and that you’re upgrading into your cybersecurity stack. Don’t just give it away. Go in there and educate them. Show them the right things to do. We teach you how to do a lot of that in that four-hour sales training that’s below. But have that conversation with them. And I know it’s a hard conversation. I get that it’s a hard conversation. But you know what’s a harder conversation? “Hey, Mr. MSP, we just had an employee… our payroll girl just sent $40,000 to Afghanistan. I thought you were protecting us.” That’s a way harder conversation to have. So, you’re spot on there too, Tom.
Jonathan: Well, I don’t wanna go too far down the rabbit hole here, but I can’t help but ask. So, you’re mentioning, Chris, a security stack. But what are some of the things that are kind of above and beyond or separating that from a standard for your clients or who you’re working with?
Chris: Yeah. So, we had… And you guys, I think… I saw something in the chat there, Brian said, “Why do they call it a stack?” Basically, a stack is a stack of pancakes. It’s stuff in a pile, right? That’s kind of where… That’s where the stack term comes from.
But we had our traditional MSP stack which is what? Your helpdesk, your RMM, anti-virus, anti-spam, on-site work, etc. I used to sell an all-inclusive service. It was all you can eat helpdesk, all you can eat on-site, business hours only, patch, you know, all that standard MSP stuff that we’ve been selling for… I’ve been selling that since 2005. Okay?
But then as we move into cybersecurity, I think there’s two levels of cybersecurity. There’s your standard cybersecurity offerings, which are your endpoint security, your high-level threat monitoring, your threat prevention, your application monitoring, your application prevention, etc. There’s all these different pieces. And there’s also the add-on pieces. And I’m not gonna go through all that stuff because this is a sales discussion today, not all this. But then there’s the add-on pieces, which are the high-level things like SOC/SIEM. I like to actually include SOC, probably the standard one, by going to an actual SIEM, that’s your security information, event monitoring, and potentially vulnerability scanning, and a couple of other things that are higher-level that not every client needs — your penetration testing, etc., that kind of stuff. So, that’s kind of where I… But your standard stack now should be… Every one of your clients should have your standard MSP stack that I talked about initially, and then your basic cybersecurity stack. You should have that. And if you don’t know how to do that yet, we can help you with that, or, you know, Ninja can help you with that, too. But those are the things that you need to be standard offering to every client you have. And if you’re not charging for it, that just means it eats into your cost.
Jonathan: Well, thank you for clarifying that, Chris. That’s really helpful.
Chris: Do you want more clarity from that? I can get deeper. I just don’t wanna get… It gets real deep real fast.
Jonathan: No, absolutely. And we can certainly come back to it. Let us know in the chat, do you wanna hear more about that? Do you wanna dig into it? One area I think we should go back into… And so I do see a comment, “Need help with the stack creation.” So, let’s come back to the stack in just a minute. Before we do, though… Absolutely right, Michael, there’s so many products. It’s crazy. And Michael, I’m gonna follow up with the link to our last session, which is really a deep dive into building out your stack. But for right now…
Assessments — Should MSPs be giving these away?
Jonathan: Chris and Tom — assessments. We talked about it a little bit, but let’s go back to that stage. And I’m curious, everyone in the chat, too. We launched a poll and it looks like we got not too many answers, so if you can put down in the chat right now, in the polls, feel free to add some more answers to this. But right now the answers that we do have, three out of four people are saying yes, they offer free assessments. And we have some other people saying, “Okay, they’re free if the prospect signs.” So, I’m just kind of curious, like, do you have any advice? How did you guys handle this when you were active MSPs? And how do you recommend people handle this now?
Chris: Tom, you or me?
Tom: I can tell you how I did it. Yes, I did… If it was a basic assessment, I was contacted, you know, someone wanted IT services. I did a rather basic assessment. It would generally be myself and a technician, maybe a couple of hours total between us, a checklist we’re going through, a basic report. It was different than what I would call an evaluation. So, that assessment, I did them for free. I didn’t do anything. I know a lot of people out there would charge for it if they didn’t sign up and included it. I didn’t do that. I just did it. I provided it. I provided a limited amount of information back to them if they didn’t sign. There’s a lot of changes in that now and some people charge for it. I’m interested in what Chris has to say about it.
Chris: Yeah. So, one of the things that we do… First of all, one of the really important things is to make sure that you have a strong sales process. You need to make sure that you actually have it documented. And even if… I say the word “strong,” but write down what you’re doing. One of the things that I… And I’m just gonna give you kind of a baseline of what we recommend for all of our prospects and clients that we do. Have an introductory discussion with them. That should be a sales discovery call. Find out if they’re a good fit for you. Find out if you’re a good fit for them. Those things should go into that together. Make sure you understand their decision-making process, make sure you understand all of that. Don’t rush to do that assessment on that first call. That’s the biggest thing that I see MSPs do, is they’re trying to rush in, like, “Okay, we’ll meet with you right now. We’ll do an assessment immediately.” Take your time. Make sure that they’re a fit. This also shows that you have some consultative approach and you have a process. People like to see structure. Just imagine if you went to the doctor and you didn’t have any structure around it and you just walked in the door and they saw you in a back room and a back alley. It doesn’t feel very good.
“Have an introductory discussion with [the prospect]. That should be a sales discovery call. Find out if they’re a good fit for you. Find out if you’re a good fit for them. Those things should go into that together. Make sure you understand their decision-making process, make sure you understand all of that. Don’t rush to do that assessment on that first call.”
Chris Wiser, Founder and CEO of The Wiser Agency
So, you have to make sure you have some structure along that. Make sure you have some discovery questions to determine. Make sure you research ahead of time. Make sure they’re a good fit for you. Make sure you understand their vertical, their niche, where they sit, all the different pain points that they might have. Make sure you ask them questions and shut up. Let them tell you their problems.
Just imagine, you know, going on a first date and never stopping talking. What did the date end up like? They’re like, “See you later. We don’t want anything to do with you.” It’s the same concept here. So, make sure you have a good discovery discussion. Second of all, turn that into, “We’d like to do an assessment, but we have a lot of levels that we want this to be.” This is where we, actually, I recommend charging for this. And tell them that if they’re a good fit, coming out of it, we usually see about a $2,500 and up assessment fee. All of our clients are charging for assessments, I will tell you that, first of all. They’re getting this done because they have a sales process and it’s consultative, they show them all the different things that they’re going to attack, all the things they’re gonna look at, and they’re giving them real things. When we say real things, they’re coming back…they’re doing this assessment and they’re coming back with a risk assessment. Here’s how much cybersecurity risk your business actually has.
And, Tom, if we go back to the assessment that you and I did, we both sold our MSPs in 2015, I think. I sold mine in June 2015. We were just doing a network discovery, technical. That stuff is important, yes, but that’s valuable to who? Surely not to the client. They already know for the most part what they have. That stuff is valuable to us. So, if you’re leading with that, there’s not much value in that for your client. But if you actually lead in — here’s what your network all has, here’s what the data all has. We also tested all your staff. We fake phished your staff. We looked at all these different things. It turns this into a professional services consultative approach.
Now, do you have to have training, planning, structure, process around all these different things to make that happen? Without question. So, that’s my recommendation is go in, doing those different things. Now, can you do that with an existing client? I recommend going into your existing clients and doing them absolutely free. I totally agree with that 100%. You can’t go in and sell a network assessment to somebody that you’ve already sold to. It’s very difficult. Now, if they come to you and say, “Hey, we’re a wealth management firm and we want to add a bunch of different compliance pieces,” that’s a different animal. But if you’re going in to try and upsell them on cybersecurity, then I would recommend a freebie.
Tom: Chris, I’m glad you pointed that out because I was thinking the same thing. Five years ago, we might cover security to some degree, but it was kind of, like, looking at the firewall.
Chris: That’s all it was, right?
Tom: Yeah. And antivirus, that kind of thing. It wasn’t what we have to do now. And if you’re probably really doing security well at your MSP, which is a whole ‘nother topic, but you’re probably gonna have to subscribe to tools and use things to really find out… I really want to assign a value to that because you want them to see that and pay for that what they’re getting because whether or not they’re with you, that’s value that you’re really adding to their business.
And so I would tell you, once… I would almost separate out this network eval assessment from the security assessment and have those be two different things and figure out a real cost associated with that in value and pass that on to whoever you’re dealing with in a prospect. And if it’s an existing client, I will tell you, if you had a client for years, you may wanna look at that and say, “Hey, maybe it is time for a risk security evaluation,” and figure out an offering centered around that.
Back to mitigating your own risk using insurance and MSAs
Chris: Yeah. And I think, you know, a couple of things you mentioned there is, you know, potentially separating it. I’m totally fine with that. But also the one thing that we’re not talking about here, and I see some stuff going on in the chat here about break-fix and managed services, you gotta be very careful now because if you’re even selling a single point solution… What’s a point solution? Managed spam. If you’re selling managed spam into a client, you are assuming some liability. You have to be very, very careful of that. Times in this industry are changing. And we are seeing massive holes in MSPs open up. Jonathan, we talked about this earlier with MSPs being an active target. Also, their clients are active targets. Their high-value clients are active targets. CPAs are probably the number one, wealth managers number two, right? They’re active targets. So, you have to be careful what you’re taking on.
My clients, as a whole, for the most part, they’re either managing everything or they’re selling break-fix and they’re managing no point… there’s no point solution. So, it’s either we’re gonna manage your whole deal or you’re gonna be break-fix or we’re not at all, because there’s too much liability that goes along with it.
And let’s not forget. Tom, I’d like to get your opinion on this. We’re going to be seeing some type of code or compliance or something that comes into this industry in the next two to five years without question. The government is gonna come in and regulate this without question. “So, which side of it do you wanna be on?” is really the question.
“We’re going to be seeing some type of code or compliance or something that comes into this industry in the next two to five years without question. The government is gonna come in and regulate this without question.”
Chris Wiser, Founder and CEO of The Wiser Agency
The side of it… I never have done anything to make sure that my clients are in order. I don’t have MSAs. We have a lot of guys that we talk to, I’d say 50% of the prospects that we talked to, don’t have MSA signed with their clients. That then becomes to, you’re not even insurable from a cybersecurity insurance firm insuring your… There’s all these variables. So, Tom, I’d like to get your opinion on that too.
Tom: Yeah, that’s a really good point. I mean, we have been living, you know, in an industry where it’s amazing what we’re doing, the power that you have, the control over networks, the liability, the security issues — and there’s not licensing, there’s not compliance. That is certainly coming. And I would say, that’s one of the important things we talk about. And we’ve done other sessions in here, Jonathan, where we’ve shared MSAs and pricing calculators and about protecting yourself and insurance.
You really wanna make sure you’re on the right side of this because it is coming. And even if it doesn’t come from the government, if it doesn’t come from that way, it’s gonna come in lawsuits that you’re gonna deal with as Chris was talking about. About, you know, not being insurable or an insurance company deciding that you were at fault because you didn’t have the right router firewall in there. You’ve got to protect yourself and be sure that you’re charging for those things, you’re getting paid up front for them, and that you’re contracting for those services.
Chris: And think about the discussion that’s had with that potential ins… Because insurance companies don’t really care. They want their money back. That’s what they care. They wanna limit their risk and they wanna limit their liability. So, they’re gonna come after any low-hanging fruit that they can go after.
Think about the conversation difference that is, “Hey, client A got breached. What do you guys have to say about it?” “Well, we sat down with them for the last three quarters, showed them that they have a large amount of risk. They refused. We had them sign this liability release letter.” Whether that stands up or not, it doesn’t matter, realistically, because we’re showing that we had best practice in order. We tried. They said no. They didn’t wanna pay the money. They didn’t have these things in order. We told them that they needed it. They said no. They didn’t wanna pay the money. Here’s where we sit. That’s a lot harder to come after than, “Oh, shoot. Yeah, we probably should have told them about that,” because that’s a real thing. Think about your own clients. I’m not… And understand, I see a lot of stuff going on in the chat. This isn’t just a blanket statement that we throw over everybody in the world. But I’m gonna tell you based on, Jonathan, you came in asking me about trends. Based on trends, I’m gonna tell you, 90% of MSPs that we see, I don’t know about everybody, but 90% of the MSPs that we see, their house is not in order. I’ll tell you that. Ninety percent coming into our program, their house is not in order.
Tom: Even the threat of a lawsuit would take them down.
Chris: Exactly. And it doesn’t take much for a billion-dollar insurance company to sue your million-dollar-a-year MSP to its knees. They don’t have to win.
Tom: They even say it. You’re probably gonna be in a situation about your business. It’s probably not gonna even go as far as a lawsuit.
Chris: Yeah. And it doesn’t take much at all, because… And the other factor is, what if you… And let’s assume that you have your house in order and you just don’t go talk to your prospects about this and they still sue you, and your insurance company then pays the claim, how many times are you gonna get insured? You’re gonna get insured probably once. It’s just like malpractice insurance for the most part. You have one claim like that for negligence or gross negligence or anything like that, you’re gonna be done.
So, a lot of… And it’s just… It’s different stuff to think about. And I’m not trying to scare everybody, but it’s something that you have to think about. And if you don’t have these conversations with your clients… It’s way better to do it ahead of time, it’s what I’m telling you.
Jonathan: Yeah. Yeah, absolutely. I mean, we have Kristen here who mentions in the chat. It was kind of cool when we had Justin from techrug on and we were talking about cyber-insurance. Kristen was like, “Hey, I’m actually going through this process right now.” And she shared a little bit about that.
But yeah, I mean, one of the unfortunate takeaways from that conversation was, it’s getting more difficult. Rates are going up and insurance providers are getting a little bit more iffy around ensuring MSPs, specifically around cyber. And so it’s definitely something to look into now versus later. And of course, we can provide some other resources for folks in the chat and in that doc.
Chris: Yeah. And I think a couple of things I’ll say to that, we are definitely seeing rates going up. We’re definitely seeing MSPs getting not renewed because they don’t have their house in order. We definitely have MSPs being… I think Kristen mentioned in the chat here that her insurance company requested to see a copy of her master service agreement. Those things are happening. And the real reason is because MSPs are being targeted and there’s certain ones that are getting hit. And what’s happening? They’re becoming… They are like the jackpot for a hacking firm. It is what it is. Right? So, you gotta be careful.
Jonathan: Yeah. And I mean, maybe this just to go back to today’s topic of what to give away, not to give away for free. Maybe this goes back to the larger point of, don’t let clients really kind of push you around and being firm with what you’re willing to do and what you’re providing.
Chris: We say inside of… Well, there’s two things I say inside of my program. One is don’t sacrifice your stack and stop letting clients dictate the path of support. And for so long… And I totally acknowledge this is the case because for the most part MSPs, for the last 20 years, had no real leverage. You really didn’t, because it was, “Well, we wanna protect… We’re gonna keep you efficient. We want to make sure you’re patched. We wanna make sure that in case of a disaster you don’t lose all your stuff.” And usually the disaster was a server failure or a hardware failure. So, there was really, like, no real leverage.
Now we’re in this world where those hackers are actually holding those clients accountable. I mean, it’s, like I said, it’s the best time ever to be an MSP. The big question you have to ask yourself about your own business and your sales process, and are you charging for that?
Stop feeling bad about charging a proper amount for money or for services. Stop charging… Stop feeling bad about money. There’s a stigma about money that people have, that they’re like, “I’m afraid to charge. I don’t…” No. You are a professional services industry, you should be charging properly. And we see clients actively… We had a client get $600 a seat for a 10-seat deal a couple of weeks ago. That’s unheard of to most people on this call. And they’re like afraid of it, but it’s real stuff that’s happening. And that allows you to properly staff, it allows you to properly market, to properly sell, to actually have cash flow to run your business. That’s what that does.
“Stop feeling bad about charging a proper amount for money or for services. … We had a client get $600 a seat for a 10-seat deal a couple of weeks ago. … And that allows you to properly staff, it allows you to properly market, to properly sell, to actually have cash flow to run your business. That’s what that does.”
Chris Wiser, Founder and CEO of The Wiser Agency
Setting your MSP up for success with long-term, auto-renewing contracts
Jonathan: Well, what about… Let’s go back a little bit to Tom. You bring up this point a lot. And Chris, it sounds like you had something similar. With your agreements and contract terms, so, maybe this doesn’t directly apply to what you’re giving away for free and what you’re not, but I know, Tom, you prefer to have multi-year agreements. Chris, do you have any thoughts there, too?
Chris: Our standard that we recommend is a… The industry standard now is basically a 36-month agreement. If you look at all of the big guys: Dell, Enterprise… Dell, Lenovo, HP, enterprise-level stuff, the standard is a 36-month agreement. And what we recommend is if your client wants it shorter, that’s fine. We can do it shorter. If you want a shorter car lease, what happens to the price? The price goes up. If you want the price cheaper, we don’t pull away from the stack, we don’t pull things out. We extend the term. And the other… So, that’s the answer to that. And the thing that I get back from MSPs is, “Well, I don’t wanna tie myself to a client for five years.” That’s fine. That’s why you do your QBRs and your QSR. You wanna lock that deal in, and then you modify the price over time. Things are gonna change. They’re changing every couple of weeks right now. Things are going to change. You’re going to be able to charge more down the road and you need to have a sales process and a quarterly review process and a system so you’re comfortable having those discussions. Tom?
Tom: Yeah. I think, once again, me and Chris are on the same page. First of all, sorry about me moving around. I’m trying to stay out of the light here from the windows. But…
Chris: You look good in the light, I’ll tell you that.
Tom: I got a sun half of my face. But yeah, once again, three-year, auto-renewing, auto-escalation clauses at the end of each year is how I did it.
Now, I did the auto-escalation clauses because what I found was, I’d have a hard time keeping up on all the ones that are renewing, so I wanted something to increase on that contract yearly, but I left it open to negotiate if I had to. But we’re exactly the same. I would get away from… Now, in reality… And Kevin pointed out here, too. I did three-year contracts, but the reality was these things were month-to-month. Because while it was a three-year contract, that’s what they’re gonna pay and that had the escalation increases in there. But if people weren’t happy, it was actually really a month-to-month, I would let them out. I’m not gonna hold anyone and everyone to court with anyone over a managed service contract But, you know, hopefully, in most cases, I only had a few clients over the years that wanted to get out, but might be a cultural difference, but also the reality of these things are. Are you really gonna sue someone over $1,000 or $2,000 or $3,000 a month contract? Probably not.
Chris: Yeah. And there’s a lot of variables that come into that. The one thing I want you guys to think about, you got two guys on this call that have both exited their MSPs. I was able to exit my MSP because I built long-term value that also did not have me as part of the day-to-day tech services operation. When I started my business, yes, I was a tech guy, but I went into this with a mindset of I want to exit this company and do something different. That was my goal. I wanted to exit the company. And my recommendation for everybody is to have that mindset because the same mindset that you have that leads you to exit also leads you to extreme profitability. Those are the same good habits. And note that you have to have good business habits to sell a firm, period. You’re not gonna sell the firm… And understand some of the stuff going on with the chat and talk about month-to-month. There’s no business that’s gonna come in and buy your firm with month-to-month contracts. They’ll buy it, but it’s gonna be a single-month payout. That’s what you’re getting.
“I went into this with a mindset of I want to exit this company and do something different. That was my goal. I wanted to exit the company. And my recommendation for everybody is to have that mindset because the same mindset that you have that leads you to exit also leads you to extreme profitability. Those are the same good habits.”
Chris Wiser, Founder and CEO of The Wiser Agency
Tom: Exactly.
Chris: Right? So, they’re gonna get the steal and you’re gonna potentially walk away with a minimal buyout. And even if your goal isn’t to exit, that’s fine. But the same best practices for buyout lead you towards a good lifestyle, a good business. And if you… And understand, hey, there’s an anomaly in everyone, but I will tell you, majority of my clients, if I asked them, if they were to work for the next five years and they sold their business for $5 million, would they say no to that? Would they say, “I wanna be in a server room working on cabling”? Very few. Maybe 1 out of 100. So, think about all of that and think about your own goals. All those best practice things lead towards a good life. I surely didn’t start a business just because I wanna live month-to-month either. It’s just stuff to think about and it’s good business practice. And the same stuff that I see working in the States… I see some people from U.K. and the EU in there. Same stuff we’re doing works in the EU, works in Australia, it’s working across the world.
Answering the big question: Is $600 per seat really possible? Plus, how to raise your price with clients
Jonathan: Yeah. Great points, Chris. And I wanna point out, we’ve got about 10 minutes left. I wanna give everybody a chance to ask some questions before we sign off. We also have a few things we wanna call out.
Well, actually, let’s answer this one. So, what’s included in a $600 per month, per seat? I mean, great question. Chris, any thoughts on that? I mean, $600, I’m sure, as you pointed out, price sounds astronomical to a lot of people.
Chris: So, I think, you know, a couple of things with that. First of all, selling in a very consultative way, not going in there talking about commoditized pieces, not talking about selling individual products, not showing them price line items; but going in there and showing them real risk. For a long time, the MSP industry has been the one that set out this number of $50 to $75 to $100 a seat. There was this mindset of silver, gold, platinum; or bronze, gold, silver, whatever different levels, that we’re all like those different pieces. Throw all of that away for a little bit and think about what’s the factor that manages most of this. Now, what’s… And it’s risk, is what it comes down to, that, you know, if you wanna call it F.U.D., risk, whatever you wanna call it. But the bottom line, what should be included, your standard managed services offering and your standard cybersecurity offering that we talked about earlier. All-inclusive is what I recommend because it’s easy to manage, it’s easy to control. That’s eight to five helpdesks, eight to five rolled trucks, everything managed on your helpdesk with a remote-first mindset. How many tickets come into your helpdesk that really require a truck roll? One out of 50, probably, give or take.
If you’re managing that in your helpdesk and managing and all with a remote-first mindset with service level agreements and all these different things in place and proper escalation. If you’re managing it right, it should be easy to do and very profitable. And if you include your standard stack, MSP, along with your standard cybersecurity stack, not including your penetration testing, your vulnerability assessments, or your vulnerability testing, and your SIEM, you should come out really good. And where the numbers come into play and where this $500, $600 a seat comes in, it’s about 80% margin on all of that toolset.
And certain things… There’s different variables that come into apply. We had a guy yesterday that I was talking to, his name is Chris. He’s from Mississippi. He told me that he joined our program about a month ago. Went to his clients and he was basically all over the place. He was selling about $75 bucks a seat. I think it was $70, $75 bucks a seat. He went into them and signed a new 3-year deal at $180 a seat with this to an existing client. I’m perfectly fine with that. Look what he did with his MRR. It was a month-to-month deal and he changed everything. And he does that across 25 clients, i’s a game-changer. So, I think that’s the biggest factor I would have around that.
Jonathan: And Chris, I just wanna tee up this one other comment we have from Jim here in the chat, I’m sure you’re reading it, too. And this is bringing up… Okay, he does see some large MSPs who are charging a price like that. He’s saying he knows that they don’t actually have the real backing behind it to back up what they’re marketing. I mean, I guess, like, of course, and Kevin points out, you’re gonna see this all over the place. Right? And it’s just a matter of time, really, before maybe you get caught and burned with that. But any other response to that kind of comment?
Chris: Well, there’s bad apples in every industry. We know that. And I agree with what Kevin said coming out of that, that there’s a lot of bad MSPs. Part of that is because this industry has been left unregulated. I mean, it is what it is. That’s part of the beast. It is what it is. We’re gonna have to deal with that. But what I will tell you, Bruce, to answer your question, you just said, “If customers have been paying $50 a month per seat without any significant issues, how can you sell them at twice the price?” First of all, make sure your house is in order, obviously. And that takes care of Jim’s question. But make sure that you have a sales process and you’re showing them a consulta… This all comes back to showing them value and showing them that they really have risk. We can all… Everyone on this call can agree that the risks are different now than they were six months ago. The hackers are escalating. They’re getting better. Do we have to edit and change different tools to manage all of this all the time? Yes, without question. We can explain that to our clients and show them that they have real risk and ask them how they wanna manage it. You’re going to have clients that are gonna say, “Okay, I don’t wanna deal with it.” Okay. That’s fine. But then you’re gonna sign off on all your liability. Period. That’s how it’s gonna be. Or I’m not gonna be a client. You have to be comfortable having that conversation.
And you have to be communicating with your clients on a regular basis showing them the things you’re doing, not just sending them ticket reports. Ticket reports don’t really matter. And the significant issues factor isn’t something there anymore. Go back to that insurance discussion. I’ve been paying this insurance without any major storms, so I’m just gonna cancel my insurance now. No fire, flood, or hurricane has hit me, so I guess I’ll cancel my insurance. Nobody thinks that way. But it’s a different mindset. We’re not talking about servicing things by an insurance company. We’re talking about, we are protecting your risk and helping you manage it. It’s a different conversation. It’s a totally… Trust me, it’s a different conversation. And I’m gonna give you a run… And Tom, I didn’t mean to cut you off there.
One really good case study. Got another guy in our program named George. Came into our program in May, had 24 existing clients. He went back, met with all 24, 23 of 24 signed on with him at a new rate over $100 per seat higher. That’s a… He over doubled his MRR. And one said no and he kicked them out. That’s the kind of stuff that’s happening and it’s real. This is real stuff that’s happening. Go ahead, Tom, I didn’t mean to cut you off there. Sorry.
Tom: What I was gonna say, going off what’s in the chat is that I had to, at a point, once I really figured out my pricing and my stack, what it was gonna cost me, and to provide adequate service to the clients; I had a number of contracts that just didn’t work. And I had to go to each one of those clients and I literally had to tell them, “I can’t provide you the things you need and I’m not making money. And that’s a problem. And this needs to be good for both of us.” And those are hard conversations to have. And they didn’t always go well. And there were clients that I had to let go under these circumstances because they just couldn’t swallow the idea of paying more than what they were right now, even if they were getting more because they felt it was adequate. But, of course, they don’t understand what they need in many cases. But that is a conversation you might have to break down. And, Chris, I’m sure you’ve got tactics for that of where you have to step into a client and go over the fact that you’ve been charging them $50 per month per user and you really need to charge them $100 or $200.
Chris: Well, a lot of this comes down to that conversation thing. How many conversations are you having with your client? And are they seeing that they really have risk? Are they seeing that they really have value? Those things are real things. There’s nobody on this call… We can debate about pricing and who’s gonna buy water. We can debate all that stuff all day long. But nobody on this call can say, “My client has less risk than they had six months ago.” You can’t. It’s not true. Your client has way more risk. There’s way more factors out there that are hitting them. Do they know that, though? Do they understand that? Do they understand that all it takes is one person on their team clicking an email phish and their entire world could go down the drain without protection? They don’t understand that. It’s your job to tell them that. Now, are you just gonna give it away? That’s your choice. Or are you gonna go in there, do a proper assessment for them, work with them, show them that they have risk, and let them make the choice, let them make a hard choice? It’s a big factor. And somebody said earlier today in the chat here that it’s our job to go in there and show them all this stuff. And maybe I misread this. It’s a while ago. It’s an hour ago now. But it’s our job to put this in front of them and let them make the choice. But usually, MSPs are just like, “Here’s what you need,” and they don’t give them a choice to handle the risk or mitigate or manage their risk. Real stuff.
“Do they understand that all it takes is one person on their team clicking an email phish and their entire world could go down the drain — without protection? They don’t understand that. It’s your job to tell them that. Now, are you just gonna give it away? That’s your choice. Or are you gonna go in there, do a proper assessment for them, work with them, show them that they have risk, and let them make the choice — let them make a hard choice?”
Chris Wiser, Founder and CEO of The Wiser Agency
Wrapping up and ongoing resources
Jonathan: Yeah. This is great. This is a really good conversation to have, a lot to think about. We’re running right up on the hour here. Before we run out of time, I just wanna give an opportunity for us to run through a couple of last things.
I’m gonna bring up the doc screen again. Again, this agenda doc is something that you guys can keep. I’m gonna be editing this a little bit after we get done with this call to add some other links or resources that we’ve mentioned here. But a couple of things to bring up.
The first one, I forgot to mention this, we started a Slack group for this series. So, everyone who’s on this call now, there’s a link to join. I’m gonna grab that link too and dump it in here. Everyone, come and join this. This is actually an idea that was brought up probably a couple of months ago in one of our previous sessions of, like, “Hey, why don’t you start up a group where we can, like, continue this conversation?” So, that’s a place where you guys can jump in there. You’ll see that there’s some different channels. It’s another place to keep these conversations going. You can also connect with one another. So, that’s a resource I wanted to call out.
Also, I just wanted to bring up one more time. You’ll also see some additional things that we’ve got going from Ninja. So, we’ve got the cost calculator, the MSA template that came up during the chat. We’ve got links to that. A bunch of free stuff here. And then, of course, we’ve got the link to the sales training that Chris had mentioned. So, Chris, you wanna describe this one more time before we go?
Chris: And just so you know, as I’m sitting here, I just got a message from one of my clients, Huey. He’s up in upper Northwest. He just said, “Signed my first deal this morning. Three years, $1,620 MRR (that’s monthly recurring revenue, $1,620 U.S. MRR) $5,000 onboarding fee.” I said, “How many seats?” He said five. That’s 270%… He just closed that deal. That literally just came to me at 12:55. So, that was six minutes ago. So, this stuff is really happening. And we talk about this. So, in the sales training that you guys see here, there’s a link below us. And coincidentally, those arrows on the screen point nicely to that blue bar at the bottom. Or you can register for that.
Jonathan: Yeah, yeah, exactly.
Chris: Cindy Phillips, my head sales trainer, and I did this. This was actually a four-hour workshop that we did as part of IT Nation last week, Monday, I think it was. Yeah, last week, Monday. But this is the recording and you can go in there and watch it. There’s a workbook. There’s no obligation to this other than your email address and your first name and your last name. It’s a four-hour training and a workbook and access to our dashboard. Go watch it. See what you think out of it. If you have questions, we’d love to help you guys out, for sure.
Jonathan: That’s great. And thank you so much again, Chris, for taking time. I wanna call it one more time before we leave. There’s also… Everyone should go over and join the Facebook group. If you’re on Facebook…
Chris: I hate that picture of me, by the way.
Jonathan: Well, there you go. That’s a to-do for you. But, yeah, I mean, this group, 10,000 people talking about common experiences, having conversations like we just had, and getting into more details, too. So, that’s a great resource for everybody.
Thanks, again, everybody, for hopping in. Thank you, everybody in the chat. Kelvin, you want me to talk about MSP Bento really quickly, so I’ll do that. MSP Bento is an email that I put together every week. I send it out on Mondays, sometimes Tuesdays, and it’s got five free resources. It’s free to subscribe. I’ll drop the link for that in here too. But yeah, these are resources not just limited to what Ninja is doing and our free stuff, but things like blogs from Kelvin. Kelvin is the author of cyberdrain.com. He provides a ton of free scripts that he’s developed. So, if you’re looking for help on automation, there’s a good stuff there. I share tons of stuff there all the time. Kelvin is bragging. He gets featured regularly. Well, it’s true. But yeah, thank you, again, everybody. Thank you, Chris. Thanks, Tom.
Chris: I’m glad to have Kelvin in the chat…
Jonathan: I know. It’s always a pleasure to have Kelvin here. And Tom, we’ll let you go before the sun melts your face.
Tom: I know. Yeah. It’s happening.
Jonathan: But one last shout out. Sorry. There’s so many shout outs to have. But one last one for join us again in two weeks’ time, I think it’s gonna be December 3rd, we’re going to go back to a Thursday time slot. And we’re actually going to, I think, have another person we saw in this chat here, Matt Fox from Valiant Technology, to talk about branding. I’m pretty sure I’ve talked with him about that. He’s on the hook now, we’ll confirm, but we’re gonna talk about branding your MSP, really trying to differentiate yourself that way, too. So, that’ll be a great chat. We’ll give you more info on that. But logging off now. Chris, final word.
Chris: I’m gonna join your Slack group, so I’ll be in there.
Jonathan: Nice.
Chris: Feel free to talk to me. If you guys have any questions, any issues, feel free to add me on Facebook. I’m active on my email, active on messenger. Don’t be a stranger. If you guys have questions, and if you doubt me, I challenge you. Let’s go.
Jonathan: Thanks so much, Chris. You’re the man. Thank you for taking the time. And thank you, everybody on the chat. We’ll see you next time.
Chris: All right. Take care.
Don’t miss our next MSP Live Chat!
We’re talking with Heather Johnson, COO of Gozynta, to find out how MSP owners and technicians can battle burnout, be more productive, and get physically and mentally healthier with proactive self-care. After a year like 2020, it’s a discussion many of us need to have.
Don’t miss it! Register and add the chat to your calendar here.
