How To Know Which Clients Your MSP Should Walk away from

Speaker A: Welcome back to the podcast and great to have you with me for another week. So this week we're going to talk about something I think is a really, really critical part of not just selling, but also probably business. And that's um, how to know which client, your MSP business or your business should walk away from. And the reason I put this, uh, up here is because there's a really important conversation, uh, I think that needs to be had around. Not all business is good business. And one of the things that, um, I did recently actually was to um. And I don't run an MSP business, but I have, uh, in the past run an MSP business and I've made decisions to walk away from certain clients. Uh, and in my own business, I made a decision to walk away from a client only about a week and a half, two weeks ago, actually. Uh, an organization that I felt just didn't respect and value what we did and how we operated. And I felt was probably gonna get in, make the team feel negative. And I didn't want that to be the case. And I also remember when I ran my software business, um, we had a person on the phone who was incredibly rude to one of my top customer, um, service people. I remember thinking at the time, actually, um, why should. I should have done this? But he was incredibly rude. He, he basically swore at Richard, the guy that worked with me in my customer success team, who was a lovely. Richard was a lovely guy, still is a lovely guy. And uh, I heard him, I overheard this guy shouting so loudly about a support career. And we ran a SaaS software business, um, that uh, got serviced clients and um, with, you know, with their requirements. And basically he, um, yeah, he basically, you know, couldn't dislike, couldn't get over the fact there was a bit of downtime, an issue we had and was really abusive on the phone to Richard. And then, long story short, I picked up the phone and said, thanks very much, Steve. Um, I appreciate you being a little customer for a while. These things happen. It's the nature of the technology, what we do. But, um, I'm afraid to say I'm gonna have to cancel your account. And he remember him m saying to me, oh, that's ridiculous. You can't do that. I can. I will. I'm not having you talking to a member of staff like that. So I want to talk about some of the reasons as to why, um, you want to walk away from certain clients. And there's a phrase that I always use actually, which I think is a really good phrase to think about using when it comes to, um, when it comes to looking after the clients that you work with. And that's to think about BMWs. And everyone might think BMWs what you're on about. But there's a phrase that, um, my good friend Matt Garman shared with me, which was, no one wants BMW clients. And the client, the phrase that he referred to that was bitches, moaners and whiners. And when I think about it and I think about that phrase, it always makes me laugh, actually. Who are the clients that are BMWs that you have that are bitches, moaners and whiners that you can say, do you know what? This isn't actually good for us as a business. So I wanted to talk about how you can know which clients you should walk away from. And one of the things that I think is the starting point of that is actually the way they treat your team. M. Um, and the way in which they engage with you as a person, as a business person, but also the way in which they talk to people you work with. And there are some people that will say, oh, it's okay, it's fine. I'm just going to let people talk to my team like that. But you've got to remember that there is a potential impact for that person. I remember Richard, he was a great guy and he wasn't necessarily going to leave me, but I felt it was important that I stood up for him to say, actually, these are the standards that we set. And as a leader, if you've got people doing that and treating your team like dirt, uh, then ultimately it sets an example. And, um, so the first thing I'd say to you is, know the way in which certain clients, you know, talk to your team. And some people might say, oh, it's fine, it's just what it is. But just be aware that for every action there's a reaction. And if you've got someone that's talking to your team in a very negative way, that's basically, um, you know, really just, you know, making your team feel uncomfortable, then that's going to have a negative reaction on them. And something. Especially in the current climate, recruitment and finding great people is a challenge. And so do you really want your team going, do you know what? I can't be bothered with this. I can't be bothered to be treated that way or to have. Be shouted out or to have the abuse that has been given to me there. So the first thing I would say to you is just be careful about how people Treat your team and the people that you have and uh, look out for that, look out for this also. Sometimes you can hear on phone calls, but sometimes you can also see it on tickets and the way in which people interact and the way in which people engage. Um, and so that's my first thing I think you should look out for. The second thing to look out for when it is a client to walk away from is to look how profitable that client is. Um, and one of the clients I'm working with at the moment has a very large organization they work with who is responsible for a very large figure per year. They probably do, I don't know, 150 grand a year plus with that company. But that client does a huge amount of support and requirements from that organization. So the amount of tickets and queries and questions that they have from that individual customer is probably, you know, worth a significant amount per month. And one of the questions and decisions that we've been, I've been helping that organization with is to really actually look and see, you know, is that client profitable after accounting for this, the support costs that you have in place. And uh, look at that. You know, be in a position where you can record details down of how many tickets they've had per month. And then if you attribute, you know, the cost of a support engineer to be able to tackle that and work out a uh, cost of what an hour or 15 minutes of time is, it's worth actually looking up and saying actually okay, well we had 100 tickets and the support cost is, you know, cost to the business is £30 an hour. So that customer's costing you £3,000 per month. And actually if you're only earning £2,000amonth off that client or whatever, then you might worthwhile spend some time looking at your um, customer base in that way. And there's a really, really great um, way in which you can do this. The guys that um, I was at a presentation in Lond where Dave Sutton from Wingman Marking, um, presented an outline I thought which was really good, which was around um, high paying and high profit basically. So you know, we, you know, had an access that we were, he was able to attribute for low pain and low profit. And then obviously, you know, low profit, high paying and high paying, um, uh, high profit, low paying. Obviously everyone wants the customers that are highly profitable and lower impact. You know, don't cause challenge m But just really have a look at being able to assess that in the clients you've got. It's worthwhile again something I do with organizations can come in and help you do that. It's worthwhile to take that step back and to have a look and just to see actually what is it this customer's given us. And I'm not saying you should change that company overnight. You might need to migrate and find some other companies or to find businesses to sort of then be in a position to maybe make a decision to say to that customer, look, thanks very much, but this isn't working. Or you can go to them and say, look, here's the outline of what we've done over the course of the last month. Three months, six months, and here's how much time that's taken. Here's what we charge you guys per month. We need to look at an arrangement that puts that product, that price up. Otherwise we're going to have to, um, make some other decisions. And having those honest conversations with clients is important because it may well be that the client owner doesn't realize actually what's happening. It may well be their team's frustrated. It may well be there's some stuff in those tickets or those issues that you can deal with and handle. So definitely look at, um, how much, you know, how profitable the client is. So, as I mentioned, the other thing you should also look at doing is how much time and emotional energy the account consumes. Um, there are some clients, going back to that BMW analogy, there are some clients where, you know, and a great way to test it, I always think, is even on your mobile phone or if you've got an automated call system, uh, when that client rings, what do most of your team feel and think? Do they go, oh, it's so and so, looking forward to speaking to them, or do they go, oh, so and so again, oh, we've got to deal with them. And I think it's worthwhile considering what that reaction is and having a conversation with your team, maybe look at your top 20 customers and just have that conversation. Say to people, look, how do you feel when number four rings in? What do you think? And you get, oh, they're a pain in the backside. They always want to do this. Oh, they're nice people. I enjoy with them. So have a little think about, you know, which of the people that are, you know, take management time. Who are the people your management team, where you are always discussing the. Who you've always got. There's a query or a challenge or maybe they've got. They don't want to take your advice on board. They are keen to just do things their own way and don't want to take on board what you say. So just have a little look at how much time and energy as well as looking at profitability, just have a look how much time and energy is involved in those customers as well. Uh, and that's what leads me onto my next point around. Another great way to think about whether you should clients to walk away from is are they following your security or technology recommendations? You know, again, uh, with one of my clients at the moment, there's a organization who basically just doesn't do what they, they're asked to do. And we actually talked to them and said, you know, is, there comes a point in time when you actually need to stand up for yourself here and say, look, you have to do this in this way, otherwise we can't provide you the service. And they were really unsure about doing that. But I've said, you know, the implications unfortunately, of people not taking advice from experts is that there is then a repercussion after. And in the cyber security space, if someone's saying, oh, no, I don't want to do it that way, I don't want to implement, um, you know, what you suggest I should do. If they get hacked, um, or if they get, you know, on their systems, two things gonna happen. A, they're gonna come and talk to you and say, oh, you know, you were supposed to protect us, um, for that. And B, it's gonna create a huge amount of stress for them, um, and stress for you. And C, actually that it's gonna have an implication on your reputation. So I think it's actually important. And the challenge, it's important to be able to make sure that clients sort of follow that. Now the challenge is if those conversations and recommendations are always done in a sales situation, then clients will always feel like you're just trying to. They'll feel like you're just trying to basically, um, you know, you're trying to basically push them down a path and they'll feel like they don't want to do that. But, but if it comes, you know, maybe, you know, from your technology team or where you can actually even draw a red line, and maybe in a review session you have with them and say, look, if you don't do this, we're not going to be able to support you, or we're not going to provide the service for you, or we're going to ask you to sign a disclaimer that says you respect the fact that if there's something happens, we are not responsible. What that does Is it means that the clients then go, wow, you're really serious about that. It shows it, you know, and you can say, yes, I'm so serious about it that I can't, you know, continue to deliver a service to you in all good faith, thinking that everything's okay, when the reality is there's. There's something not quite right there. So, you know, if you've got a client that's continually not wanting to take your technology, you know, ideas or security suggestions on board, then have a think about whether that's someone you want to work with. Um, is that someone that, you know is really, you know, part of your team and want to be part of your setup, or is that someone you think, do you know what? Everything I say, they're always picking holes in it, they're always picking fault in it. And actually why is that? And one of the things I encourage people to do and MSP owners to do is to go and have a very honest cards on the table discussion with that company and to say to them, look, be honest with me. Every time we suggest something, you poo poo the idea you don't want to do. Some of the things that we talk about that we know are critical and there are some gaps and some issues in the systems and setup that you've got. Guys, what are we missing here and how do we go forward? Because at the moment, I appreciate you don't want to pay lots of money for new services or for other things or for things to happen, but on the other hand, if you ended up having a cyber attack, you feel like we were responsible. So what do we need to do to fix it and how can we fix it? How can we move m forward that great question, how questions are so important. How can we solve this issue? So make them responsible for it and say to them, m, in order for us to provide support to you, we need to resolve this issue. How do we do that in a way that feels good for you and good for us, and bring them into the conversation and show them the evidence, provide the evidence and say the reason we've recommended these five things here, uh, is because of, statistically this thing happens when, you know, this happens here and this happens here and give them indications as to why what you're suggesting needs to be, needs to be taken on board. So I think that, you know, I think that's a really important thing to make sure that you are, you are doing and having a look at, you know, again, one of the organizations I work with, we are putting in place, um, a disclaimer that says, you know, we, we respect the fact you don't want to take our advice on board, but you need to sign this. That basically says we are not responsible in the event of a problem. And if you do have a problem, we're going the charge for that to get that repaired will not be covered as part of your support package. And um, we've had a couple of conversations with a couple of people and there's a few people that have gone a bit. Okay, well is it really that bad? Yes, it's pretty key. You know, we'd rather, you know, even if you didn't work with us, you should fix that issue. And people then go, ah, okay, okay, I get it. Okay. I guess you're trying to protect us. Okay, well let's have a look at how we can make that happen. So really um, encourage you to make sure that they are ah, following that for you. And one of the things to think about when it comes to clients and security and upgrades and different systems is don't expect clients to pick up and run with things straight away. What happens in lots of cases is that uh, people take time to absorb things. So if you have got a specific inquiry or an issue that you think you want, you know, you want them to fix, then don't just do one email or one communication, just remain m over a period of time, communicate again. John, as I mentioned in our last meeting, I'm really concerned about this issue. We need to fix this. And then, you know, two weeks later an email. John, as we talked about, this issue is still out there and here's the implications of this issue, here's the outcomes that could happen as a result of not doing this again. One of my other clients at the moment has got ah, from a server perspective has an organization that basically is providing um, ah, servers to them and they don't want to upgrade the server even though the servers are capacity. So we've sort of said to them, look, here's what could happen as a result of not going down this path. Um, you've got 19 people in your business that use this system every day. That would stop. What would be the implications that what would be the productivity changes what would happen? And we're trying to make sure they've got some outcomes that they can then go, okay, yeah, I can see what that could do for us and enable them to sort of go down that path. So have a little think about that but also have a little think around um, clients. Another thing to think about clients you should maybe walk away from are people that repeatedly pay you late, um, or always expect you to jump through hoops, uh, unreasonable times. So have a look out for repeated late payments. Who are the people that always you having to chase for and never want to, you know, to pay you on time? I think that's an example of someone that's been a little bit disrespectful. It's an example of someone that, you know, again, organisations that I generally don't like to work with. If people are continually uh, wanting to pay me and my organization late, then I bit like, well, you know, you don't value what we do, um, and it gives me concern for them. So yeah, have a little think about those that are late payments or like I say that, you know, expect you to do things at an unreasonable space. You know, I've had organizations that want us to respond at 12 at night. Even though this is when we had my SaaS software business, we had people who wanted to respond at 12 at night even though our support ticketing system was available from 8 till 8. And I was like, well, okay, do you want to pay extra for that or no, but we still expect it. I was like, it's a bit unreasonable. Who else in the market is offering that? No one else is doing that or no one else is doing it for the fee that we charge. And sometimes you have to have an honest conversation with people about that. Um, so one of the other things I think you should also have a look at in terms of which clients to walk away from is who are the people that also no longer match the model or the service model that you want to move forward with as an msp. So it may well be that you've got some clients who previously they were with you from the start, they got started with you when you started up. But actually the direction that you're moving in now is just a different direction to where they're at. And um, again, you know, an organization I'm working with at the moment has got about 20 clients that are in this position where they basically just had um, software purchase with the provider and expected the provider to then manage and help them with that software. And even though they move into a model around protections and making sure people are covered in a different way to prevent from cyber incidents, this 20 organizations are basically just want to pay the minimum. And I'm like, actually the model of where you're going is different to these people. We've got to have a plan that says, okay, where we're going is here. And the reason we're going this way is because of these reasons. And what we're doing at the moment together is probably not a good fit for that. It's important to give clients and people you work with a chance to not so much change. But if we say, actually I'm going to end the relationship is you might want to have an honest conversation with them and say, look, based upon where we're at at the moment, this isn't going to work for us anymore. Or we can't do what we did before for that figure. Or this is, you know, we' change in what we're doing now because of the, um, threats coming down the line. So let's have a conversation about how we can get you to that position. What information can I share with you that will be helpful for you to understand why that's so key? And, um, really just have a look at how you can try and see which clients fit that model. One of the, again, the great exercises to do is to look at your top 10 clients and try and work out the top three or five of those who are the people who do, who do match the model that you're looking to get to, who do invest in your services. You value the work that you do. So who are the people that you want to replicate and actually who are the people at the other scale of that that don't want to do that and which are the people that don't match that model and always are wanting to penny pinch or do things in the right way? Just have a little think around, um, who those people could be and give them a chance to have a conversation. And by the way, that conversation should be done, I think ideally face to face. If it's not done face to face, then obviously VI is fine. But, uh, face to face. And the way to do this is do something what I would call an accusation order that Chris Voss in his book Never Split a Difference talked about. And that's to come to the meeting m with a clear look. You know, you're going to probably think I'm here to sell you something and that I'm just here to get you to spend more. I'm, um, not. But here's the challenge that I've got and then talk through that with them and openly and be clear about what your red lines are. If you're ready. If they say to you, no, I'm not going to do that. I don't to want to work in that way. Is your red line to say look, thanks very much, but I appreciate that, but I can't now provide you with that service. And it may well be that is the case, and in which case then you have to then say, well, thanks very much and be true to your word. Uh, obviously, if you go into that conversation and then still continue to work with the client, you sort of, they're never going to sort of, they're never going to work, you know, trust you, trust you again, they're never going to think you're serious. So if you really do think those things are important enough issues to stand to die on a hill for, then say that to them. And if they then don't change, then you can actually say, look, thanks very much, but, um, I've decided that we're no longer able to provide you with the service. What I'd like to suggest is that we transition that out for a period of one month, three months, six months, whatever, and, um, we'll help you find a provider that can do that well, and, um, get you to a place where you want to get to. And sometimes I think customers in that situation then are a bit surprised that you've even done that. I've had people say to me, you know, in organizations before, oh, right, you're really going to do this. It's like, yeah, it's that serious to us. And in some cases they then back down and go, okay, okay, fair enough. We don't want to have to go down that route. We don't want to do it. Or you also have in other situations where they'll go, okay, stuff you, we're going to go our separate ways. And then what you then find is that three months, six months later, they come back to you, said, actually the company that we went to wasn't as good as you or didn't do things in the way you did. So, um, you know, we're going to have a conversation and sometimes they will. That's then up for you to decide if they want to come back at higher level or higher rate. So just have that honest conversation with people and say to them, look, this isn't just about price. This is about a number of things where we're going, where we're trying to see and what we're trying to help people with. And we want you to be in that position and we want you to value what we do. And if that doesn't work for you, then totally respect that. We respect the choice that you've got to make. Um, but give people the chance to. And if they've got, then obviously you can work on a handover with them and their team to put some, something new in place. So look, and, you know, I think these are things that I think are just, um, you know, ideas and elements of things I've used in working with my own business, but also with clients that work with, you know, you've always got to remember that, uh, sometimes, you know, people will say, oh, I better the devil that I know. But sometimes actually you're not. It's not the case. The organization actually. So again, the work that my company does is works with msps. We do a lot of work with msps. The organization I let go, uh, just recently wasn't an msp. And the reason, uh, being I let them go is because I felt that they were distracting from my marketing team from doing the work they want to do and should do every, every month. And this, uh, organization wasn't in that space. And it made me feel actually that I was probably creating a challenge for that team for them to have to work in different industries, whereas. And also there was a few other things that, that weren't quite right. So I've been able to step back and say, thanks very much guys, but we're gonna, you know, finish off. I freed up my team to then focus on doing more work for the industry, the MSPs that we work with, to deliver better results for them. So again, sometimes there's an opportunity cost here for you and your team to do better work with your chosen marketplace by letting other people go as well. But I appreciate this is a tough decision to make. It's not an easy thing to do. It, um, has to be done with care and with attention like I've shared. And obviously you've got to understand the revenue implications if you lose four grand a month or three grand or 100 quid or a thousand quid a month, sorry, of income, then that's got to come from somewhere else. Um, but sometimes you can find solutions when you free yourself up in those ways. And certainly going back to what I said at the start, having BMWs, bitches, moaners, whiners that are always moaning and wanting to do things isn't a good way for you and your business to be. So, uh, those are my thoughts on which clients to walk away from. Let me know your thoughts. What are the things that you think work for you? Is there a time when you've never walked away from a customer? Do you think I'm talking absolute toss? Do you think you'd never, you know, all customers just have to take it on the chin and grin and bear it. That may well be your viewpoint. If so, let me know. Um, it's always useful to know what people feel and in these situations, um, if that is the case, then talk to me and let me know. But as I do, I always like to finish the podcast on a inspirational story and I'm going to share the story of a young lady called Michaela Beams from Oxfordshire. And Michaela was diagnosed with a brain tumor, uh, a number of years back and ah, um, sadly, you know, was told she didn't have huge amount m of long time to live. But instead of being negative about that, she basically set up a charity that helps other kids that have a brain tumor, um, lead best lives and do the things that they like to do and you know, that they wanted to do before they pass on. And I thought to myself, what great way of, you know, inspiring other people, um, someone that's going through tragedy themselves that come out to the other side and said, no, I'm just going to make it better for other people and still do do a great thing. So my inspirational story is Michaela Beams, um, definitely feel it. You know, even in darkest times, um, you can put yourself in the shoes of others and help other people. Um, people will remember you and you have an impact on the world, which is hopefully what you want to do. So that's it for this week of the podcast. Hope you've enjoyed. As ever, please, if you have, um, I'd love to hear from you, please reach out to me. James White, sales, uh, or at LinkedIn. We'll put some links in the podcast links below. But as ever, it's great to share some ideas. Tell me what you think. I'd love to hear your thoughts. Um, I've run um, a software business for um, well, nearly 14 years. Um, raised money in 2013, grew it, um, but also had my challenges with that as well as well as helping other msp. So I know the work and the challenges you're facing. I know what it's like to be in that position as a business owner but want to help you achieve what you want to achieve. So, um, as ever, um, the goal was here to support you and to help you to get great sales results but also greater business success. So, um, if I can do that, reach out to me. I'd love to hear from you. But until next week, thanks so much for listening as ever and um, see you really soon. Stay safe, take care and remember, eat obese. You have a choice. See you later.