“ The customer is not a spreadsheet where we’ re adding 20 %. If we raise prices, we are going to add value for the customer.” – Larry Ward
Tommy Thornton, CEO of Automates, an MSP in National City, California. Pricing is especially important to smaller clients that operate on tighter budgets, he notes. The more mature businesses, Thornton says, tend to focus on the second most asked question:“ What is going to change?”
Customers also fear falling off the radar, with service suffering, as they become part of a larger customer base, says Paul Cissel, CEO of Growth Caddie and M & A Expert in Residence for TMT.“ What I explain to them is that we have more resources. We have a lot of certified people. We have a very bulletproof tech stack that’ s going to help them reduce risk and help them grow,” says Cissel, who has been involved with nearly 60 transactions, mostly on the buying side.
First Contact = First Impression
Because it’ s so prevalent in customers’ minds, pricing talk is inevitable during the first contact. So be prepared. Also, decide how to make that first contact— and what to convey. You get one chance to make a first impression.
Resist the temptation to overwhelm customers with too many details, advises Thornton. Use a gradual approach and start by addressing the questions foremost on customers’ minds.
Thornton makes it a point to directly reach out to customers on first contact.“ I want to get in front of it, introduce myself. Most of the clients are overwhelmed by that:‘ Wow, I can’ t believe the CEO is giving me a call.’”
During that call, Thornton tells customers if they are getting a new account manager or, for those who didn’ t have an account manager previously, whether they will be assigned one. He explains that Automates will have a dedicated team of tech and account managers for the customer, and details how the company works. He follows up the phone call quickly with an email recapping the conversation.
Whether to call or email customers for the first contact depends on the customer base, says Ward. It’ s easier to make calls with a smaller base but if the customers number in the hundreds, email is more expedient, he says.
Either Ward or one of his customer success managers makes the call. In addition, he says,“ We typically like to have the previous contact person involved in the call so we have a familiar face and voice for the customer.”
Cissel emphasizes the importance of direct communication.“ You probably won’ t have any more than 20 or 30 customers you have to directly communicate with,” he says.“ The larger ones and the ones with the largest account profitability, you want to meet directly if you can. You want to be able to press the flesh. You want to impress upon customers they’ re going to be in good or better hands.”
Take the Driver’ s Seat
Cissel makes no bones about who dictates how to communicate with customers— the acquirer. Let the customer or the acquired company decide, instead of following your tried-and-true playbook, and you’ re asking for trouble.“ Any time you do something special, you’ re going to screw it up,” he says. The same goes for which systems and tools to implement— the acquirer sets direction.
“ We have our preferred method of communications,” says Thornton.“ We are very communicative. We show that we are hyper-responsive on the phone and to their tickets.”
In some cases, customers aren’ t used to communicating with the MSP, says Ward. That was the case with the customers from a recent acquisition.“ There was no outreach from the company we acquired. Now they’ re getting a lot of information. I think they are a bit overwhelmed,” he says. Ward is looking to strike the right balance by providing enough information without drowning customers in it.
Prepare to Onboard
Once you establish lines of communication with customers, let them know what comes next. Typical next steps include network assessments and audits to determine what tools they are using and identifying technology and security gaps.
“ There may be tools from the MSP you acquire that you choose to keep and others you choose to get rid of,” says Thornton.“ It’ s definitely different per acquisition.”
If you migrate customers to your platform, typically you’ ll conduct a network audit. That’ s when gaps and vulnerabilities are identified, which will likely require a price increase to address them.“ We find them 100 % of the time,” says Thornton. Customers tend to react positively because they want to address the issues, he says.
While the acquired customers may not necessarily understand why audits are needed, they do appreciate it when something like
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