3
Things
That Have Changed In This New Economy
LETTER FROM THE EDITOR
Well , it ’ s not like we didn ’ t know an economic adjustment was coming — we just didn ’ t think it would happen this way or this fast . For a decade , we ’ ve had a “ money running uphill ” bull economy , with everyone overspending and overindulging . Pretty much anyone running a business could make a living ( not get rich , mind you , but earn a wage ). Now , we ’ ll see a rapid thinning of the herd .
Personally , this is not the first recession I ’ ve been through , and I ’ m sure it won ’ t be the last . Back in 2009 – 10 , we saw over 20 % of our client base disappear . Most folded and got a job . Some sold for pennies and went to work for the company that bought them . Some changed careers entirely , thinking there were greener pastures . ( I now wonder how they are faring since IT is one of the industries that has been the least impacted by COVID-19 shutdowns .)
Back then , I was not as prepared as I am today to deal with such a setback . I learned . One of the marks of intelligence is not making the same mistake twice . Sometimes you win , and sometimes you learn .
From my experience , three things will change for IT services businesses in this new economy . If you want to avoid a major loss of clients , income , profits , and personal wealth , then you need to know what these changes are and get ahead of the threats before you ’ re too far under to stay afloat .
1 . The Buyer : Some of the MSPs I ’ ve talked to that primarily serve retail , restaurants , and hospitality have been decimated , losing 70 %– 80 % of their income , and there won ’ t be a quick rebound for most . Others serving the medical or professional services businesses ( like CPAs and law firms ) have seen an increase in sales . So , the first thing you have to decide is what percentage of your client base is and / or will be no longer viable . If you find yourself on a sinking ship , then it ’ s better to jump in a dinghy and row to a safer port rather than play music like the band on the Titanic . Second , the power has shifted to the buyer , and they know it . The new buyer will be far less tolerant of sloppy , ordinary services . There will be hungry competitors out there willing to work for beans to steal your clients away , and they will . If you cannot defend your value right now , then you ’ re headed for trouble . Everyone is watching costs and reconsidering all vendors , asking themselves , “ Is this necessary ?” and “ Where might I get this cheaper ?” To be clear , I think it ’ s foolish to jump to discounting or take any client that can wave a dollar and fog a mirror , but selling to new buyers will require a much higher level of sales skills and knowledge as well as being more thoughtful and strategic about what you sell and to whom .
2 . The Cost Of Client Acquisition : Without a doubt , money will be parked for a while , and fewer opportunities will be available . That ’ s not to say there won ’ t be companies spending — there undoubtedly will be . But people will be more hesitant to invest in an upgrade or take on a new project unless they deem it essential . In our organization , we ’ ve NOT seen a dip in leads — just the opposite . But what we have seen is a dip in people deciding to buy now and / or take the higher-end ( more expensive ) services we offer , mostly out of fear and uncertainty . To combat this , we ’ ve tightened the qualifications of our leads and changed our programs to include services that are of interest right now ( for example , how to fuel leads with cheap digital marketing and advertising ). We ’ ve also increased the number of follow-up steps , webinars , touches , etc . In doing so , we ’ ve
Founder and CEO , Technology Marketing Toolkit , Inc .
been able to maintain margins and hit goals , but we ’ ve had to work a lot harder for it . You will too .
3 . The Need : The famous American bank robber Willie Sutton was once asked why he robbed banks . He replied , “ Because that ’ s where the money is .” You need to think like good ol ’ Willie . Where is the money now ? Who ’ s got money , and what will they want to buy ? To take another chapter from Willie ’ s book , the easiest way to close a sale is with a loaded gun in your hand . In IT , your “ loaded gun ” is compliance . According to Fred Voccola , CEO of Kaseya , approximately 78 % of SMBs expect to invest in compliance as a service in 2020 thanks to new regulations such as the Stop Hacks and Improve Electronic Data Security ( SHIELD ) Act in New York and the California Consumer Privacy Act that went into effect in January of this year . However , less than 10 % of MSPs even offer compliance as a service in their mix . Therefore , if you are not selling compliance services and solutions as well as the cybersecurity protections needed to be compliant , then you ’ re missing out . Further , you need to look at everything you ’ re selling and ask yourself , “ Is this considered essential ?” If not , then you better get busy selling something that is . Yes , IT services in general are essential , but if you can add on services , products , and solutions that help businesses make money , save money , retain clients , and provide a competitive edge , then you ’ ve got a winning mix .
To learn more about trends happening right now , go online to watch an excerpt from our annual IT Sales and Marketing Boot Camp about what I see as the biggest opportunities right now . Find this at MSPSuccessMagazine . com / trends . n
4 | MSPSUCCESSMAGAZINE . COM • VOLUME 1 ISSUE 8