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N-able Global Partner Summit 2013
Get Out of Your Trench…It’s Killing Your Business!
David Wilkeson, [email protected]
330-286-9070www.mspadvisor.net
www.linkedin.com/in/davewilkeson/
About David Wilkeson
• Serial technology entrepreneur• COO and Partner in DRS from 2005 – 2013– Went from a 9 person break-fix shop in Youngstown,
OH to an 85 person MSP and Cloud Provider with offices throughout Northern Ohio and Western PA
– Participated in many industry groups – VTN, True Profit Groups, TruMethods, Service Leadership
• Technical and sales background• Formed MSP Advisor, an MSP consultancy
The View From The Trenches
• Most owners spend too much time in the trenches
• The trenches are comfortable…unless they are on fire
• It’s dark in the trenches – you don’t have a good view of your business
Two Kinds of Owners
Sales BackgroundTechnical Background
Signs You’re in the Technical Owners Trench
• You believe the project/engagement isn't worth doing if it isn't technically sound (by your standards)
• You believe quality sells itself• You believe cost is secondary to design• You believe every customer is different, therefore every
design has to be different • Your new hires are predominately high end engineers• You are too light on true Management (after all,
managers are one of the reasons you went out on your own!)
• This works in a project-driven VAR organization• In an MSP, it impedes your growth
Signs You’re in the Sales Owners Trench
• You believe you can sell your way to prosperity• You believe revenue is king (vs. profit, costs, etc)• You believe all deals are good deals if the
customer is willing to pay a certain $$ amount• You believe you are just one sale or $X away
from solving all your problems• This works in VAR, Pro Services or Cloud sales• In an MSP, it impedes your growth
Problems with Sales Focus
• Revenue is not the ultimate KPI• Neither is Labor Loaded Gross Margin (LLGM) • Employees become overwhelmed by volume• Typically overpromise and under deliver• Constant fires• Forces everyone into a very reactive mode• Owners priority is to make more sales to fix the above
problems• Owner is so “100,000 foot view” that they can't see the
root causes of problems
Problems with Technical Focus
• Typically low profit and low growth• Consistent cash flow issues• No sales pipeline insight, sales are not predictable• Unwise spending/over spending on infrastructure
and tools• Labor numbers too high, LLGM is too low• Lots of chiefs, not many Indians – or no chief at all• Owner is so down in weeds that they can't see the
root causes of problems
Balance is the Key to Success!
Sales
Technical
Balance is the Key to Success!
Sales
Technical
Technical
Sales
How to Bring Balance
Sales
Technical
The Three P’s of Balance• Planning• Processes• Performance
Indicators (KPIs)
=Predictability!!
Planning
Sales
Technical
• Identify (or hire or partner with) the Yin to your Yang
• Commit to regularly leaving your trench
• Implementation of processes is a process!
• Set goals and deadlines in writing
Sales Processes
Sales
Managed Services is a Product• It includes specific services
and features• The tools like N-able are
features of your product, not the actual product
• Products are predictable• Describe your products in
writing
Sales Processes
Sales
Establish a Predictable Sales Process• Sales pipeline tracking
process• Deal close rate tracking• Activities to keep pipeline full• Simply answering the phone
is not a predictable sales process
Technical Processes
Establish an Onboarding Process• Who, what, where, when• Standard documentation is
key• Establish a standard project
plan for onboarding and stick to it
• Determine how many you can onboard per month
Technical
Technical Processes
Technical
Establish a Standardization Process• Goal should be 90% similarity
between customers• Customers expect “Best
Practices” from MSP’s• Standardization should be part
of all upgrade projects• Standardization improves
support
Technical Processes
Technical
Establish an Automation Process• Automate everything possible• Identifying automation targets
is key• Automation decreases labor
costs and improves support• Automation improves
customer satisfaction
Technical Processes
Technical
Establish a Detailed Ticket Handling Process• Must focus on SLA adherence
and predictability• Establish role based steps
rather than employee based steps
• Use ITIL “lite” as a basis• Consider a triage process
Technical Processes
Technical
Establish a Process Improvement Process• Processes must change as
your business grows• There’s always a better way!• Regular formal meetings
work well
Process Improvement Meeting
Technical KPI’s
Technical
Service Level Agreement (SLA) Adherence• Must be measurable in real-
time and readily viewable• Must be clear contractually• Should be the same across
the board for the same product
Technical KPI’s
Technical
Mean Time to Resolution (MTTR)• Should be broken down by ticket
severity and product• Trends are more important than
the number (if the number is within reason)
• Should not be used as an SLA measurement in Outsourced IT type Managed Services
Technical KPI’s
Technical
Open Ticket Count• Should be broken down by
ticket severity and product• Week to week trends are
more important than the number
• The trend is a good measure of the health of a support group
Technical KPI’s
Technical
Opened/Closed Ticket Ratio• Important number to know
on a daily basis• Critical number to know on a
rolling weekly basis• Consistent weekly ratio >1 is
bad news
Technical KPI’s in Action
Sales KPI’s
Sales
Sales Pipeline $$• Target amount varies by
company• Forecast value of deals in
process, adjusted for sales phase and close rate
• Good sales forecasting drives managed growth
Sales KPI’s
Sales
Deal Close Rate• Varies by company, sales
technique, and target market• Tracking close rates allows
you to analyze your sales process
• The more predictable your close rate, the tighter your sales process is
Sales KPI’s
Sales
Customer Retention Rate• Important to know what
contracts are in jeopardy and why
• This needs to be factored into your sales pipeline and forecasts
Sales KPI’s
Sales
Labor Loaded Gross Margin (LLGM)• MSP Revenue – Costs associated with
MSP (tools, licenses, travel, etc) – MSP Labor Costs / MSP Revenue
• Goal is > 70%• Ex: $150k MRR - $5k in costs -
$40k in labor / $150k = 70%• Goal is only attainable through
tight processes and correct pricing
Sales KPI’s
Sales
Effective Hourly Rate (EHR)• Customer Contract Revenue / Contract
Hours Used
• Goal is > $125• Ex: $5k MRR / 40 hours = $125 EHR
• Individual customer EHR is a good indicator of the health of that customer
• Bad average indicates bad customer fits, pricing too low, or bad processes
The Ultimate KPI
Sales
Technical
Predictable and Stable Bottom Line Profit
