Podcast #130 Why Most MSPs Struggle to Sell Value

Welcome to the MSP Corner podcast. Before we kick off our show, we would like to share what our main objective is at the MSP Corner. Our main goal is to help CEOs build profitable and self-sustainable IT service firms. We are not just providing tools for IT firms.

We will be sitting in meetings with you to ensure your IT firm stays on track. The first area we are focused on, strategic sales. IT firms are stuck selling technology or IT support. We will provide you with the blueprint so you position your firm as an added value to your prospects.

We will have framework on how to sell value so you influence the prospect into selecting your firm. The second area we see many IT firms struggle in is marketing. 90 plus percent of businesses rely on antiquated marketing methods. The most popular choice, word of mouth.

We have proven methods on how to attract the ideal prospect. Our framework will include how to become the online authority and be the business influencer for an industry. The third component to our package, scaling. IT firms walk away from opportunities because they lack the bandwidth or skill set to scale.

We have lined up reputable businesses so our members can hire on-demand resources that will allow them to scale their business. The fourth area we will offer help in, selecting the right tools. In order to deliver value, you need the right tech stack. Our platform will offer information on products that are the ideal choice for MSPs.

The fifth area we will offer help in is with documentation. Templates are a critical component when building an MSP. We will have contracts, proposals, SOWs, collateral, and much more in the template section. You will have every document you need to start up your managed IT service business.

Thank you for tuning in. Let's go to our next podcast. Hello, everyone. Thank you for tuning in to the MSP Corner podcast.

I am your host, Fernando Leona, and I'm joined by my co-host, Gregory Moraviec. And the title of today's show is Why Most MSPs Struggle to Sell Value. So before we get started, we always have an agenda. So let me quickly go over that.

And we always lead off with an introduction on what we'll be discussing. And then we're going to discuss, what, six topics today. The lie MSPs tell themselves about selling value. Why MSP proposals destroy differentiation.

The hidden sales problem inside MSP firms. Why prospects compare MSP prices. What high growth MSPs do differently? The leadership shift MSP CEOs must make.

Then a quick plug on the MSP Corner and my final thoughts. All right, so let me just start this off with our intro like we always do. And again, welcome. Welcome to everybody to the MSP Corner podcast.

the channel where we have honest conversations about what it really takes to build and grow a successful IT service firm because it's challenging. It's challenging to generate leads. It's challenging to sell. It's challenging to qualify.

It's challenging to even come up with an ideal client profile because many of you do not have it in place. Your website screams it. But that's a whole other conversation. But today we're going to be tackling a topic every MSP owner believes they've mastered, they've conquered, they believe they are the best at selling value.

Yet, many firms still lose deals to, how would I say it, cheaper providers. The commodity, you fail to rip off that commodity label. So what happens? You lose to cheaper providers.

So we're going to discuss why that happens. And obviously, I already made the introduction to Gregory. He's joining us to explore why MSP sales conversations often fall short and what disciplined firms do differently. So first up is the topic, the lie MSPs tell themselves after selling or sorry, tell themselves about selling value.

So I don't know if you're in this pack, but most MSP owners confidently say they sell value instead of tech services or IT support. But if we examine many proposals, and all of you can look at yours today, they almost are identical to other providers. So what is on that? What is in that proposal?

List of tools, support hours, security platforms. That's what dominates the conversation. And when services look similar, the buyer or the prospect only has one way to compare providers, price. Because if you guys all blend in together into one giant matzo ball, there's only one thing they can do is compare the price.

So you have a huge challenge ahead of you is, yeah, you can say all the nice things you can at a meeting and a presentation, but your proposal is going to really help you stand out. But I digress. Now the real issue is not the service quality because all of you guys deliver great service I sure but how value is framed during the sales process And you got to have a sales process And before you even dive into the sales process, you have to have a qualification process, right? You got a qualification process, you have a sales process, you have an assessment process, you have a closing process.

There's a lot of processes you have to consider. So the qualification process, let's just touch on that real quick. You have to determine if you're going to work with a niche. Maybe it's one, maybe it's two, maybe it's three, but you have to make up your mind.

You cannot have a generic message or you're just going to be, again, a commodity. Will you win opportunities being generic? Well, you have to start measuring those success rates. It's really up to you.

But we see more success when you pick your niche and you can make up the price you want to charge. So my first question to Gregory is, Is there more of a sales issue, Greg, or a leadership issue inside MSP firms when it comes to, obviously, the selling process? What are your thoughts there? Well, your selling process is something you're going to have to formulate on your own.

You're going to have to use a selling model or a selling best practice or whatever. But that's something you're going to have to come up with to be a sales to integrate into your sales environment. Definitely, definitely. Definitely.

And I think that. During your sales process, and this is this is. Something that. Needs to be.

Obviously. Scripted. With. out any type of technology terms, right?

You've got to really focus more on what their challenges are, what their business risk is, what outcomes are they looking for? Because you're not meeting with prospects because they're happy, right? You're not meeting with somebody because, oh, I'm happy with my MSP, but I still want to talk to you. I would immediately end the conversation.

I'd say, why are we going to talk? If you're happy, you're not going to want to make a change. It's like, why are you going to get a divorce from your wife that you're happy with? Right.

It's like it doesn't make any sense. You need to clearly qualify the opportunity before you even dive into that sales process. So that first step of qualification needs to be clearly defined before you go to that next step, because that's a big step. You have to sit down and determine a list of questions you need to ask that is going to expose the risk they're encountering, the challenges they're encountering, the outcomes they currently have.

What do they want? What do they want? Do they need to be compliant? Oh, you're not compliant today?

Okay, so what happens if you're not compliant? And this was a conversation we had with that maritime organization. And this is something that I really emphasized during the sales process. was, yes, we want a security audit.

Why do you want a security audit? Well, we need to be compliant by a certain date. I go, oh, so this is urgent for you. What happens if you're not compliant by this date?

Well, they're going to shut us down. Oh, what happens if you're shut down? Well, everyone's going to have to be let go. So they don't want to shut down their business.

And I'm sure they can get an extension for the compliance and all that. But they don't want to get to that point. They want to get to a point where they've completed the audit and now they have their roadmap. They want a technology roadmap to be compliant.

So I think that outcomes are something that needs to be exposed and exploited. because it's a huge selling point for organizations like us because if you're talking to all these other IT service firms and the prospect is hearing the same pitch and the same tools and the same approach, and you come in there and you say, look, we're here to solve your problems. What are your biggest challenges? What outcome do you want for your business?

Well, we need to be secure and we need to be compliant. Those are going to be one of the biggest talking points, I think, especially with the regulated industry. And obviously, everybody wants to be productive. Everybody doesn't want to have downtime or any disruptions to the network.

But, yeah, I think that regulated industries are a great target to go after. But that is definitely a talking point for during the sales process. It's like, what is the biggest hurdle your current, you know, your client, your network has today? So let me talk about why MSP proposals destroy.

They will obliterate differentiation. Because many MSP sales processes tend to move a little too quickly towards solutions, right? Most MSP providers explain that they monitor, they have these monitoring tools, they have cybersecurity stacks, and they have customized service packages built specifically for them. But clients rarely make decisions based on technology alone.

They're not buying tools. They're buying security. They're buying eliminate risk. They want positive outcomes.

They invest to avoid downtime, to avoid security breaches. And obviously, operational disruption is the main goal. And operational disruption is tied to everything, security breaches, slow networks, blah, blah, blah. Now when the business risk isn clearly explained the proposal becomes a comparison document rather than a strategic recommendation So I working with other MSPs to clearly define that roadmap in their proposals.

It's like, it's like you've got to highlight, you got to talk very little about yourself. Obviously, you give an executive summary, but we highlight their challenges. We highlight the consequences if they don't solve these problems. And then we come up with a section that says, this is what we're going to do to get you compliant, to get you secure, to stabilize your network.

And then obviously pricing and all that. But, you know, one of the one of the I think so the next topic I want to hit on is the hidden sales problem inside most MSP firms, because many MSPs believe they have a sales process. But what they actually have is a timeline. And I've clearly clarified what that timeline looks like, because you obviously qualify.

And once you qualify, you then schedule the meeting. And then during the meeting, you discuss all their challenges. And then you say, okay, well, based on all your challenges and all the pains that you're going through, we're going to do an assessment. And then we're going to do a proposal.

And then we're going to come to a decision. A real sales process should clarify three huge topics. The problem, the risk, and the outcome. Without those steps, the proposal becomes the first time the buyer sees the true cost.

And when that happens, the conversation naturally shifts toward price instead of business impact. So let me ask you a question, Greg. Why do you think technical founders struggle with building, I would call, a sales discipline? because we didn't have one over here.

So I had to create one. But you're the founder. Why do you think other founders struggle with building a sales discipline? What would be your guess?

Well, you have to get buy-in from your salespeople. You do. You just can't make a sales discipline and then I tell you what it is and you go, no. That's not how I do it.

So where are you at at that point? You're not anywhere. But I think you're right. You know, you make a very great point.

You do have to get buy-in. But you also have to approach this in a very logical manner. You have to first let them fail. Look, okay, you think you have a great sales process?

Okay, let's see how many opportunities you close. Your next 10, we're going to monitor how many you close. And if you only close one out of 10, that's not a great number. So the next 10, we're going to try a different sales approach, sales process, a very structured questionnaire.

I don't agree with that at all. Oh, okay. You're negotiating with your employees over how they're going to do their jobs? Never.

Well, you get a lot of pushback. I do it with you, but it's not normal. Well, you get it from, okay, so in small organizations, I see that I can see people pushing back. Yeah.

You do. I agree. You would push back when you shouldn't be able to. You shouldn't be allowed to.

Now, if we were at IBM, they would have a, they would have. It would be rock solid. You couldn't do it. Yeah, you'd have a very structured, a very structured sales process.

And hold on. I have conversations with large sales organizations and they don't really follow the sales process. I see it very rarely, very rarely. I do not see it very much.

And that's with, you know, organizations that have been around. They have a structure. They have governance. They have skilled people, skilled management, skilled leaders.

And still, I still get a sales guy that is kind of half-assing it, to be honest with you. I feel like they're not doing their very best on qualification. and then they do okay presenting. They do okay.

They do okay. But yeah, qualification and putting through a sales process, I can see still. But like I said, IBMs, the Oracles of the world, the Facebooks of the world, Googles of the world, the Apples of the world, I'm sure they have very strict, structured processes. Would you think?

Yeah. I wouldn't allow any employee of mine to go against what my sales process was ever. I would tell them, if I had to do it again, I would never allow it. Yeah.

I wouldn't let the person fail on their own. Yeah. No way. I would completely control it all.

And if they try to do it themselves, I'd fire them immediately. Oh, yeah. I would terminate them with extreme prejudice. yeah yeah yeah because you don't want an employee who's gonna question your methods maybe if you don't know them they can question them but if you know the methods that work i would never never allow it never yeah yeah yeah yeah no i agree i agree i agree i agree yeah they're in the beginning when i wasn't sure what a sales process was and how it worked i just went, you're right.

You're going to go and say, okay, well, what's working? And you're going to try to iterate off of that. But in reality, there are already working sales processes out there that should have been used versus anything else. Yeah.

All right. I got three more topics here First let me get to why prospects compare MSP prices because we all experienced it I still experience it But it based on past conversations with with with former prospects who have chosen other MSPs. And they'll come back and I'm like, why are we talking? Well, I'm not happy with the MSP I chose.

I go, why? Well, they they're doing, you know they're they're just failing or whatever they're not getting back to us they're not whatever they have their complaints but you know most of the time they're like well we chose them because of price and i'm like uh okay i don't you know i think that even you can have the best sales process in place you're still going to come across that it just it's not nothing is ever 100 so nobody should ever have this feeling of oh this is the silver bullet to winning winning 100 of the deals.

No. Oh gosh, you're in one, you're in, you're in a la la land if you think that. So let me, let's get to this next topic because when risk, when risk is unclear, every investment becomes what I would say optional. That's why buyers often compare multiple providers that, that it's all based on cost, right?

High performing MSPs take a very different approach. They spend more time clarifying operational risk before discussing services. Now, once the consequences of downtime or, let's say, security failures become crystal clear to the prospect, the solution carries much more weight. Now, what high-growth MSPs are doing differently?

So successful MSPs structure conversations around outcomes instead of tools, instead of technical jargon or tech services. They focus on business continuity, operational resilience, and a solid security plan or strategy. Now, the technology stack will support those outcomes, but it's not the headline. Okay.

Yeah. Yeah. You do need the tools. And I've rarely ever heard, ever had a client ask me, well, tell me about your, your SIM product.

I've never had anybody ever asked me, asked me that. Now, these firms positions themselves, these high-growth MSPs, they position themselves as advisors, not vendors. They have ripped off that commodity label. They've done it because of the discipline.

Now, over time, that positioning attracts better clients and it will reduce that price pressure many of you feel during your conversations with prospective clients. All right. And my last topic is the leadership, the leadership shift CEOs need to make. And these are obviously CEOs at MSPs.

Selling value is not simply a sales technique. It's like I said, it's not that silver bullet. This is a leadership decision about how the firm positions itself in the market. MSP CEOs need to decide whether they want to compete on price or on expertise.

And I'll get Gregory's feedback on that because he thinks I'm in fantasy land there, I'm sure. But the shift often requires discipline, accountability, and outside perspective. You need outside perspective. And I talk about this on my next YouTube show that I'll be uploading probably by tomorrow.

But many successful leaders rely on mentors and peer groups to sharpen their thinking that keeps them accountable. It keeps them sticking to a very strong and strategic process. All right, before I wrap things up with my closing statement, here's a quick plug on the MSP Corner. We're obviously on a mission to deliver valuable content to our members.

And as founders of an MSP, we know the struggles many of you go through. And this platform we're developing will be designed to help guide you through your own challenges. And we're building frameworks that solve selling challenges, selling processes, answering marketing, providing marketing strategies and frameworks so you can get leads consistently. Plus, we're lining up resources to help you with outbound campaigns such as SEO, PPC, email marketing, cold calling, and much, much more.

So let me close out with this. Today's conversation really is highlighting a very important truth for MSP leaders. Selling value isn't about clever sales techniques. It's not a, it's not a, yeah, it's really, if I had to pinpoint it, it's really more about leadership, discipline.

It's about positioning and the ability to guide clients through meaningful business conversations, because that's what you should be having. Meaningful business discussions. And for MSP CEOs looking to sharpen those skills, you need to surround yourself with experienced peers and mentors who can make a powerful difference in your approach, in your day-to-day activity, in your, even your thinking, way of thinking. All right.

So, Greg, thanks for sharing your perspective. And thanks to everyone for listening to the MSP Corner podcast. If you want to sign up to be a member, go to www.mspcorner.

com. Please share our link with the CEO who will find our information beneficial to their business. Have a great day. Thank you for listening.

And don't forget to sign up to be a member on www.mspcorner.com. Please share our link with the CEO who will find our information beneficial to their business.

Have an awesome day.