Episode 44: 3 tier selling helps MSPs sell more

Episode 44: 3 tier selling helps MSPs sell more

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Episode 44: 3 tier selling helps MSPs sell more

 
 
00:00 / 00:24:22
 
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In this week’s episode

  • Of course you’ll agree, the best kind of selling… is when you don’t have to sell at all! This week on the show Paul dives deep into the 3-tier principle of selling. And how you can easily grow your MSP by actually letting your clients choose between good, better and best options
  • Plus a marketing expert joins Paul to explain what a brand really is, how you can make one for your MSP, and the huge benefits that await
  • Also listen this week to find out why you should change your MSP to thrive whether you’re actually there or not. And there’s a brilliant book recommendation that could help you see business in a completely new way

Show notes

Episode transcription

Voiceover:
Fresh every Tuesday for MSPs around the world. This is Paul Green’s MSP Marketing Podcast.

Paul Green:
Hello, and welcome to Episode 44. Here’s what we’ve got coming up in today’s show.

Heather Harlos:
If you do this, customers are going to be your biggest advertisers without you having to pay a penny for it.

Paul Green:
We’re also going to be looking at how you can sell more, both to your existing clients and to new prospects, by giving them the perception of choice. And we’ve got another book suggestion this week. It’s a classic book, and it’s the one which explains why you get so frustrated with your staff and with the way your business is running.

Voiceover:
Paul Green’s MSP Marketing Podcast.

Paul Green:
What I want to talk about now is inspired by the book suggestion that’s coming up towards the end of the podcast. And, well, I believe that the most important business activity of your MSP should be sales and marketing, because you’ve got to be constantly adding new clients and growing the business. It is of course also vital to ensure that the service meets and preferably exceeds your clients’ expectations, because a bad service means really chronic retention. And we just don’t see this, do we, in the MSP world? We see the vast majority of MSPs have great retention and that’s actually because they’re really good at servicing the clients. The challenge, I think, is continuing to do that as the business gets bigger and bigger.

Paul Green:
And certainly anyone who started off as a one-man band and help and has then moved forward into being a proper business where things happen in the business regardless of the owner directing them, moving forward from there, what you tend to find is that you move a little bit further away from the clients every time you add someone else into the mix. It’s an unfortunate thing of scaling a business is that you cannot continue to personally look after all the clients and ensure that they’re happy in the same way when you’ve got 10 or 15 staff compared to when you’ve got, say, two or three staff.

Paul Green:
So if you’ve got chronic retention or if your retention starts to be an issue as they grow the business, of course you’re going to struggle to get traction in the business. In fact, I’ve seen this happen. It’s where people add staff and add resources that the customer service goes down and the customers become unhappy. And you’re actually caught in a perfect storm, because you’ve added all of this overhead in the hope of being able to grow the business and take on more new clients. And yet at the same time, your existing clients are unhappy. They require more service. And ultimately the chances of them staying with you for another five years has just gone down a little bit. You can’t get traction in the business if you’re adding new clients just to replace those clients that you’ve lost.

Paul Green:
Now, the problem here is really mainly one of perception, not reality. So if your clients perceive that your business doesn’t know what it’s doing or that “things have changed”, and I’ve put that sentence in inverted commas, right down to something as simple as the way that you guys answer the phone has changed, it seems to take longer to get things done. “I don’t like Dave. I used to prefer it when Phil was answering the phone.” All of those things have an affect on the clients and what they think about your business.

Paul Green:
Now we know that most MSPs do offer a great service and will continue to offer that great service. But where many MSPs fall down is in the two, three or four weeks a year when the owner is away from that business. And when I’m analysing businesses, and sometimes when I get really deeply involved with an MSP, I do often see that the staff do act differently when the boss isn’t there. Now, I don’t mean extreme changes of behaviour. I just mean that attention to detail going out of the window. And yet, as we’ve just said, it’s that attention to detail that makes the real difference. It’s the little things that the clients spot, and it’s the little things that go awry when you’re on holiday.

Paul Green:
But you need holidays. In fact, you should be taking more holidays, because the more holidays you take… And a holiday these days, certainly in 2020, doesn’t have to mean physically going away, because that’s hard, but it certainly means having a break, not doing work stuff so that you can be away from the business. So how do you do this? How do you keep that level of attention to detail?

Paul Green:
Well, a lot of it comes down to your staff. You need the best possible staff that you can get. They need the ability to use their initiative. They need to be trained well and they need to be coached well. And that comes with a price. It’s a price of using up some of your time. But the pay-off from that is you can go on holiday and they will manage that for you without any major dramas.

Paul Green:
The other thing that you need is a Standard Operating Procedures Manual. This is simply your way of laying out how you want your business to run and why you want it to be run that way. Now I truly believe that an operations manual doesn’t hold your business back in any way whatsoever. In fact, on the contrary, I believe that it frees your business from its over-reliance on you and your decision-making abilities.

Paul Green:
A simple and clearly written operations manual acts like a rule book. So it lets your staff understand what’s expected of them and the business. And they’ll fill in the blanks, and often surprising you along the way by solving problems before you even knew that you had them. Doesn’t that sound like an exciting business? Doesn’t that sound like the kind of business that’ll let you go off on holiday? So where do you get started? Well, very simply you get started by writing one standard operating procedure.

Paul Green:
You do this already with your clients when you’re using IT Glue or stuff like that, but you should be doing it with your business as well. And if you sit down saying, “Right, I’ve got to write 30 standard operating procedures,” it’s just not going to happen. That’s too much work, too much hassle, and it just feels like this massive job hanging over you. Whereas if you write one, that’s easy. Then write another one. And then another one after that. And suddenly, before you know it you’ve written 10, 20, 30 standard operating procedures. Put them into OneNote or into your PSA or wherever is appropriate where all the right people can access them.

Paul Green:
But it’s not just about writing those standard operating procedures and creating your operations manual. It’s also about making sure your staff are engaged with them. Every time they ask you a question, “How should I do this?” “This has happened. What should I do?” Instead of giving them the answer, you direct them back to the standard operating procedure, and you say, “Hey, look, here it is in black and white. These are the instructions. Go and use that to guide you, please. And if you have any questions that haven’t been answered by it, come back and ask me and we’ll adjust the standard operating procedure.”

Paul Green:
What we’ve found while going through this process in standardising our business and pulling together our manual is that the best standard operating procedures consist of a list of written instructions, but also a video: a video of you doing the thing that you’re telling them how to do. And yes, that means you’re essentially documenting it twice. But some people, they like the plain simple instructions there on the screen. Some people like to just watch a video and see exactly how you did it. And often there are little nuances and things that you miss in the written instructions which can be there in the video. This is the route to taking more holidays, confident in the knowledge that your clients will still receive the great service and the business will still have the great attention to detail as if you were there.

Voiceover:
Here’s this week’s clever idea.

Paul Green:
You’ll have heard me say before on the podcast that no one likes being sold to, but everyone loves to buy. Especially when you’re spending business money. Even as business owners, we can spend our business’ money knowing that it has little or no cash impact on our own personal ability to spend. And that’s quite exciting. So what we’ve got to do is we’ve got to reward these business owners and managers that we want to reach. Reward them for spending money with you and for signing up to your services. One of the best ways to do this, in a way which also makes them feel as though they can choose to buy more stuff from you, is to offer them three tiers of something.

Paul Green:
Now the three tiers are known as good, better and best. So you have a good choice, a better choice and a best choice. You might see these in practice as bronze, silver, gold, or silver, gold, platinum, or something like that. But let’s refer to them here as good, better, best. Now the beauty of good, better, best is you can take a package and you can put together your standard offering: the thing that you would most like people to buy. And that becomes your better offering your middle offering. What you can then do is take some stuff out of that. That becomes your good offering. And then you can go back to that middle offering and you can add some stuff in, and that becomes your best offering.

Paul Green:
So when someone looks at these offerings, they can see that the good offering is okay. It’s perhaps a basic offering at a basic price. The better offering has more stuff and obviously has a higher price level. And the best option has even more stuff in it but obviously has the highest price. And you can do this with security offerings. You can do it with support options. You can do it with hardware. You can do it with practically anything. In fact, you’ll see this all over the world whenever you look for it, right down to airlines.

Paul Green:
Not that there’s a lot of airline action happening right now, but you want to fly from the UK to the US, there’s a good option, a better option and a best option. The good option is sitting in I guess what we call economy, the better option is sitting in first class. And the best option is upper first class, if that’s available. But you get the idea, you see this everywhere, three-tier selling.

Paul Green:
Now, the reason this works so well is because people can compare the tiers. So they can look at the good one and say, “There doesn’t seem to be a great deal of stuff in there.” They can look at the better one and say, “Okay, there’s more stuff in here. This seems more like us.” And they can look at the best one and say, “Whoa, there’s loads in here, but it’s not really for us. I think we’re just going to go with the middle option.”

Paul Green:
In fact, here’s the secret of three-tier selling. When you get it absolutely right, you get a majority, let’s say 70, 80% of your sales, in the middle tier. And the main reason you get them in the middle tier is because there’s something worse that they can compare it against and something better they can compare it against. So the middle tier feels like the safe option.

Paul Green:
In fact, that’s the secret psychology behind three-tier selling. You’re not really trying to sell three tiers at all. You’re trying to make people choose the middle tier because it appears to be the best value because there’s something worse and something better to compare it against. We’re giving people the perception of choice, and they can genuinely choose any option, but we’re giving them the perception of choice and actually psychologically driving them to pick the middle option.

Paul Green:
So here’s how you start to put this together. You start with your standard offering. What’s the thing you most want to sell to your prospects? What’s the package that you most want them to buy? What’s the minimum standard? That becomes your middle package. Then you take some stuff away to create the lower package and add some stuff on to be the higher package. And that really is the way to do it.

Paul Green:
And there’s a whole series of different factors that will affect how many people buy that middle package, right down to price, packaging, positioning and the way that you promote it. These are some of the Ps that affect that. But if, when you’re putting that package on sale, you find that at least three quarters of people who buy go for that middle package, then you know that you’ve got it right. If you find that the vast majority of people are actually buying the lower package, they’re telling you one of those Ps isn’t right. Maybe the price isn’t right, or the package isn’t right, and maybe that lower package should become your middle package. And if you find that the majority of your sales are the higher package, hallelujah, this is happy times, because the clients are telling you that they would buy even more. So you move that top package into the middle package and you create a brand new top package.

Paul Green:
That’s what’s wonderful about three-tier selling. You get instant feedback from the clients on what they would want to buy and what they would be happy to spend while they’re doing it. Now, if you’re not doing this either with your existing clients or with new prospects, just pick one item. Give it a go. I tell you what, security bundles are great to give this a go with, because you can take stuff like encryption, you can take stuff like cyber security, awareness training, or dark web monitoring, and you can add in these different things. Put the bundle that you would most want to sell, what’s the stuff you’d want every client to buy, pop that into the middle tier and then create the other two tiers to create that illusion of choice. And I bet you £5, or $5, that more people go on to buy the package overall, just because you’re offering them the choice.

Voiceover:
Paul’s blatant plug.

Paul Green:
Things like three-tier selling are the things that we talk about in the MSP Marketing Facebook group. Now this is a completely free group and we are just under a thousand members. No vendors, no time-wasters, that’s a thousand MSPs from around the world who are members of that group, which is why we have such vibrant conversations every day. We’re constantly talking about marketing new products that you can sell and ways to improve your net profit margins.

Paul Green:
So if you own or manage an MSP, you are welcome in that group. You just go onto Facebook, type in MSP Marketing into the search bar, go into Groups and you should see my lovely face up at the top. If you tap on that, there’s a couple of questions we ask you just to check that you are indeed an MSP, because it is a vendor-free zone, and a member of my team will review your answers within 24 hours and let you into that group. You’ll be joining one of the most exciting communities online, completely free, to discuss marketing and growing your MSP.

Voiceover:
The big interview.

Heather Harlos:
Hello. I am Heather Harlos. I’m the global marketing manager for cloud and MSP at Bitdefender, somewhat of a distribution and channel veteran. And I like to shop too much and ride horses.

Paul Green:
Both of which are great activities. We should do more shopping and more riding of horses. Now you appeared on our podcast a number of weeks ago, Heather. And we then had a conversation on email about other subjects that you’re passionate about, and one of them that came up was branding and how branding for many MSPs is quite easily misconstrued as being just about your logo. But there’s a lot more to it than that, isn’t there?

Heather Harlos:
Oh, definitely. I think there’s a misconception on what people consider a brand. I think if you ask ten people, probably nine of them would say, “It’s a logo. It’s a product.” Even that it’s their identity. However, I think of branding is more of a social creation of what people say about you. And surprisingly, you actually have more power to influence that than most people realise.

Paul Green:
So can you explain exactly what that means? What exactly then is a brand, and how can you influence people with it?

Heather Harlos:
I don’t know if you’ve ever heard of the concept of charismatic branding. You build your brand around creating somewhat of a lifestyle for people. A huge company that’s done this great is Apple. Or if you think about, if you’re in the US, you have Krispy Kreme. Any time you see that logo, you’re going to go because you know what kind of service you’re going to get. So for technology, I think it’s actually even more important to approach your brand in the same way, because we all know that the technology we’re selling is the same. So what can you really do as a company with your employees to separate yourself from what everybody else is doing? And that could be something as simple as a birthday card that you send on your customer’s birthday. A lot of companies don’t take that time to actually create an experience for their customers, because they’re so focused on what products they’re delivering.

Paul Green:
So what you’re saying is your brand really is about how you make people feel rather than what it is that you do.

Heather Harlos:
One hundred percent. Yeah, I think, and I may have the numbers off a little, but it’s the whole idea that if somebody isn’t happy with you, they tell 10 to 12 people about that experience, where if they are happy with you, they’re going to actually tell more people and you’re going to get more business. If you’re setting up your company and you’re hiring your employees and creating a culture that really focuses on how you treat people and really what you do for them that goes above and beyond the expectation… Because everybody expects the product to work. There’s nothing special there. If you can add that other step to what you’re doing as a company, then you really are going to be successful, and you’re going to be the people that the customers talk about in a good way. And then I know in my last podcast, I talked about that social graph that you can build in social media. But if you do this, customers are going to be your biggest advertisers without you having to pay a penny for it.

Paul Green:
That makes perfect sense. So let’s look at how you do this in a practical sense. And maybe we can take Bitdefender as an example, because obviously as someone who’s passionate about this and someone who has control of the marketing of Bitdefender, maybe you’ve done this. So practically, how have you affected how MSPs feel about Bitdefender? And after you’ve answered this question, we’ll look at how an MSP can do the same thing.

Heather Harlos:
Everybody knows we’ve all been stuck at home. We all had to find a different way to engage with our customers. And I really think it was just all of this digital information overload. So what I wanted to do was set up an experience for our top customers where it really wasn’t about selling anything. It was about connecting with them. So what we did is we packaged up these… I would call them a care package, but we let them pick whether they wanted red or white wine. We had crackers, chocolates in there. And we had a little trinket that… We’re founded in Romania. It was this little play-house that actually each one’s hand-built. They’re a collectable that are hard to come by unless you go to this one artist that you get them from.

Heather Harlos:
So we sent those packages to our customers and we just set up a happy hour to get online, talk, get to know each other, find out how they’re feeling. Not even related to business, but how are they doing in general? The goal of it, of everything you do, obviously you want to sell more, but by connecting with people at that level, we actually started to see the sales numbers go up because it was something so unique to them and so personal to them that they understood that we cared about them as people not just as a number and we needed one more account to sign up.

Paul Green:
But I guess you’ve got to do this in a way which comes across as authentic, and be careful not to be seen to be just doing a campaign. So for an MSP, how could they do this? What would be something that they could do to help their customers, their clients, feel very warm and positive towards them?

Heather Harlos:
Yeah. I think one of the first things they need to do is really understand who they are. So part of that is understanding what your culture is, because if you try to set something up because you saw somebody else do it, but that doesn’t fit who you are and who your personality is as a company, that’s not going to be authentic. So I would take some time and ask yourself, what truly makes you different? What do people say about you that’s good, that’s bad, that’s indifferent? Take that and build your campaign around it.

Heather Harlos:
So if your company… And I’m trying to think of a good example, but maybe you have a really charismatic engineering staff that truly cares about what happens beyond the install. Because I think with an MSP, the most important part is staying connected to their business and helping them solve problems. So maybe you do something as simple as a quarterly check-in or a monthly check-in with them just to see the state of their business and help them find efficiencies that they didn’t even know they needed before. That one’s a little more on the business side, but that’s still something that a lot of companies don’t take the time to do.

Paul Green:
No. And I guess if you do it in the right way as well, you can have a real bond with people there. You can form a real connection with them.

Heather Harlos:
Oh, yeah. One hundred percent. And it is that extra touch of you helping their business, a default of that, because you’re talking with people more. You actually build a relationship with the person in the process. Is there a business reason for doing it? Yes. But the secondary thing that you get out of that is now you have those personal relationships where you can pick up the phone, you can have a conversation with them, and as you’re having those conversations, you’re going to learn, do their kids play soccer? Maybe they have somebody going off to college. And maybe it’s an opportunity for you to even look for your next generation of people to bring into your company. Something that I think is overlooked also is internships. I think that’s something that an MSP can offer. I hate to say it, but it is cheap labour, but it’s also something that if you’re allowing your customers’ kids to come and get experience with you, they’re going to talk about how you’re actually supporting the community as well.

Paul Green:
Which is just perfect. So Heather, tell us a little bit more about Bitdefender, and how can we get in touch with you?

Heather Harlos:
Yeah, the easiest way to get in touch with us is to go to bitdefender.com, super easy. We are a security company that does everything from endpoint detection and protection all the way to MDR services. We actually just launched those recently and we do have a MSP-specific MDR service because we all know nobody can be available 24/7, so we thought it would be cool to offer that to our customers.

Voiceover:
Paul Green’s MSP Marketing Podcast. This week’s recommended book.

Heather Johnson:
Hi everyone. This is Heather Johnson, the Chief Operating Officer at Gozynta, the creators of Mobius Connect and Tixt. I love reading business books, but I have to say there was one that really changed my life, and it was the first one I read. I stumbled across The E-Myth by Michael Gerber a long time ago. The E-Myth really looks at building a business to scale, the customer experience, so many business concepts laid out so easily. It’s full of “Aha” moments. The way he discussed business made the world look so different to me. It was like I was Neo when he saw all the Matrix in code. After reading that book, I saw every business I walked into completely differently. I started sharing some of my ideas just in a friendly, helpful way to owners, and many of them eventually found my advice so valuable they hired me as business consultants for them. I certainly caught the business bug and ended up getting my MBA, but it really all started with that one book. I think it would be so helpful for any business owner in any stage of their life cycle to read The E-Myth by Michael Gerber.

Voiceover:
How to contribute to the show.

Paul Green:
It’s the show of Heathers this week with Heather Harlos and Heather Johnson. If your name’s Heather, do you want to come on the show as well? In fact, whether your name’s Heather, Jack or Dave, you can come on the show. All you’ve got to do is send me a book recommendation. If you go onto my website, paulgreensmspmarketing.com/podcastbooks, you’ll find the full instructions there of how you can submit your own book recommendations. There’s a little script there, and there’s also a list of the books that have already been recommended. Now you can do this whether you run an MSP, whether you’re a vendor, whoever you are. Everyone is welcome on the show so long as you’ve got a great book to recommend. So go onto the website, paulgreensmspmarketing.com/podcastbooks.

Voiceover:
Coming up next week.

Andra Hedden:
And that is what’s really helping MSPs stay present in the market, even though we’re living in more of a virtual world right now.

Paul Green:
That’s Andra Hedden from Marketopia. Now they’re one of the biggest MSP marketing agencies in the United States. And she’s going to be here next week telling you what kind of marketing is working right now for MSPs. It’s going to be a fascinating interview. We’re also going to be talking about some ways that you can increase and improve your own personal content marketing. I’ve got a book suggestion from Matt Solomon from ID Agent, and we’re going to be talking about the big client switch. All the damage that was done to your competitors’ clients back in March of April this year is starting to come to fruition right now. And next week, I’ll tell you how you can take advantage of that. Go and steal those unhappy clients from your rival MSPs, because they’re going to go somewhere anyway, so they might as well come over to you, right? See you next week.

Voiceover:
Made in the UK for MSPs around the world. Paul Green’s MSP Marketing Podcast.

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