Episode 184: Your MSP’s new client paid you HOW MUCH?

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

Greetings, my friend and welcome back to the world’s most popular podcast on MSP marketing. My name is Paul Green and this is what we’ve got coming up this week.

Hello, my name is Alexander Abney-King. I’m a workplace psychologist with Abney Global and I’ll be on to talk about workplace psychology and how to help your employees work better within your organization.

And on top of that interview with Alexander, we’re also going to be talking about LinkedIn newsletters. Do you use these? They’re an incredibly powerful and popular way to reach prospects in your local area.

Paul Green’s MSP Marketing Podcast.

I’m going to try a little experiment in this week’s podcast. I’m going to reach out through the airwaves. You’re not on radio anymore, Paul. This is through a device. So I’m going to reach out through your device using the power of magnetism and electronics and I’m going to try and change the way you think about marketing your MSP. You see, I no longer want you to think of it as a cost, I want you to think of it as an investment. And I’m going to reframe it for you with three very simple questions.

So as you’re listening along or watching this on YouTube, please answer these three questions in your mind. Question number one is this, what’s a new client worth to your MSP in the first transaction? So that first transaction might be a lovely, big juicy project. It could be $10,000 or pounds worth of change in hardware and software and migration and all of that stuff. So how much is a new client worth to you in the first transaction? That’s the first thing I want you to think about.

Now, my second question is a more interesting question because it’s this. What is that new client going to be worth to you over their lifetime spent with your business? So we can calculate the answer to this one and what we’re going to do is calculate something called lifetime value. And you may see this written about in books and online as LTV, lifetime value. So you’ve got a very easy sum for lifetime value. You take their monthly recurring payment. So let’s say, just to make the figures easy for Mr Didn’t Do Well With His Maths GCSE here, let’s say it’s $1,000 month, right? That’s their monthly payment to you and it’s recurring.

So the first thing we’re going to do is going to multiply that by 12. So this new client is worth $12,000 a year to you. I’m not talking about margin deliberately because I want to keep this nice and simple. I’m talking about top line revenue or turnover as we call it here in the UK. So that client, we’re taking that monthly fee, we are multiplying it by 12, then we want to multiply it by the average number of years that you keep a client. And I say average, that can actually be a hard thing to work out. Many MSPs have a client still that they had 25 years ago or their first client when they set up 10, 15 years ago. But you have to kind of look at the average.

If you never, ever lose a client ever but you’ve been going let’s say 10 years, it’s a bit of a stretch to assume they’re all going to stay for 10 years, but you might play on the safe side and say, I don’t know, five, seven, something like that. So let’s go with seven. Can I do the sums on seven? Let’s go with 10. Let’s do the average of 10. So we’ve got a client that spends $12,000 a year times 10 years. You know what the sum is for that? Even I can do that sum, it’s $120,000. And we’re ignoring inflationary price rises. We’re ignoring new users, we’re ignoring new stuff that you sell them. We are ignoring growth, just general growth and you growing their revenue. But if you look at that when you’re… Well, it’s going to come on to my third and most interesting question.

When you look at that, that new client walks in, on day one they drop $10,000 for that project and then so long as you keep supplying the service every year they will drop another $120,000 with you. This is insane. There are very few businesses where a business like yours can pick up a client worth $120,000 just like that. And I know they don’t come along very often, which is why you listen to a podcast like this. But this is literally insane. And in fact it makes up for the slow sales cycle that you have to endure in order to get a new client.

Let’s have a look then at question number three. It is this. Based on that lifetime value figure that you just worked out, what are you willing to spend to acquire that client? And I hope the answer to this is, “Loads, Paul, I will spend loads, I will spend $1,000, $2,000, $3,000 in order to win that brand new client because I know that I’m going to get $120,000 of revenue from them over time.” Here’s the thing, the MSP that focuses in on life time value and uses that as the measurement of how much we should invest, not spend, how much we should invest in marketing in order to win a client, the MSP that does that is always going to be the MSP that wins. Because if you spend that money in the right places and in the right way, you will dominate your marketplace and your competitors will not understand it. They will be thinking about, “How much do I get in that first job and how much do I get in the first few months?” None of them will be thinking about the revenue that they’ll be winning in seven years time.

If you can truly, truly switch your thinking about the spending that you have to make on MSP marketing and change it from being spending to an investment you have potentially there a massive, massive competitive advantage.

Here’s this week’s clever idea.

One of my better long-term habits is that of writing a LinkedIn newsletter every single Thursday. It’s been my habit now for getting on for about 60 weeks or so and I know this because when you create a LinkedIn newsletter every week, it tells you how many additions you’ve done. So every single Thursday for around about the last say 59, 60 weeks or so, I’ve sat down and written a LinkedIn newsletter. Actually if I’ve been on vacation, I’ve written it in advance and one of my team has sent it out for me. As I say, this is a good habit, it’s a great weekly habit. In fact, back in, I think it was about two and a half, three and a half months ago, back around about February time I hit my year where I’d published a year’s worth of LinkedIn newsletters. So I made my LinkedIn newsletter that week about what I’d learned, my lessons about LinkedIn newsletters.

Let me first of all tell you what LinkedIn newsletters are if you don’t know, and then I’ll tell you my lessons, my top three lessons from a year of publishing them. And I’m going to literally directly off one of my own LinkedIn newsletters. So LinkedIn newsletters launched must be about a year and a half, maybe longer ago. And what it is, it’s your ability to send out a newsletter on a regular basis, and I’m going to suggest weekly is the best time for you to do that, you send it out on a regular basis to people who have subscribed to your LinkedIn newsletter. So you actually get to build two audiences on LinkedIn. You’ve got your normal people who are connected to you and then with LinkedIn newsletters you also get LinkedIn newsletter subscribers and they are a separate set of people.

So I’m not going to go into the full details of how you set this up because there’s a few steps. You can Google it. I think there’s some details on my website as well, if you have a look on paulgreensmspmarketing.com, go to the learning hub and type in LinkedIn newsletters. But essentially you change your accounts, your LinkedIn account changes over to something called Creator Mode. So you are now a content creator and then you set up your LinkedIn newsletter for the first time.

One massive warning. In fact, Simon the Producer, can we sound the klaxon please? It’s the warning klaxon. When you set up your LinkedIn newsletter the first time, you cannot go back and edit it. So as I say, Google how to do this, but just be aware when you choose the name and set the picture and the logo, as of time of recording, it’s very hard if impossible to go back and edit those. Certainly was the last time that I looked anyway. Although at some point you’d hope that LinkedIn would give you that choice to go back and edit your own newsletter.

So you go through a one time setup process and what you do from there, once you’ve set that up and you’ve decided what your newsletter is going to be called, what the logo is and how frequently you’re going to send it out, to actually send out a newsletter every week you just go and write an article in LinkedIn. So calling it a newsletter, it’s not quite what it is. Because we think of a newsletter as a collection of different items coming together and that’s not what it is. A LinkedIn newsletter is actually an article. Because you know when you go into LinkedIn and you can add a video or a video or a photo or you can start a post or you can start an article, it’s that. It’s the red button that says Start an Article.

So you click on the Start an Article, you write an article. Here’s what makes LinkedIn newsletter cool. When you’ve written it, and the formatting tools are nice and simple but powerful enough to do what you need to do, when you’ve written it and you press publish, not only does it circulate that on LinkedIn, it also emails your subscribers with a copy of your newsletter. So LinkedIn, which you remember is part of Microsoft and probably knows quite a bit about email deliverability, LinkedIn is emailing your content to your subscribers on your behalf. That’s great. That’s exactly what we want.

Now the reason that LinkedIn is motivated to do this is they want to reward you for creating content because your content is going to get people back onto their platform. And once they’ve got people’s eyes on their platform, they can make money through the sales of advertising. So it’s a virtuous circle. It’s like most social media networks. Well, you’ve heard the saying, haven’t you? They’ve turned us into the product and this is no different. But the advantage that we get for this or you certainly have as an MSP, is that you are getting your content emailed to people. And LinkedIn’s emails are much more likely to get through than your emails because of deliverability and it’s just nothing but advantages with it. So that’s the brief version of how you create a LinkedIn newsletter.

Back in February, I wrote my top three lessons for the year, and let me tell you what they are. The first is that the more personal you are, the better engagement you get. And by the way, if you want to subscribe to my LinkedIn newsletter, there is a link on the show notes for this episode. So you can go get those off my website. So the more personal you are, the better engagement you’ll get. I looked at all 52 issues and it showed me that the more personal content I put on, the better engagement I got. And that doesn’t mean… I choose not to do things like sharing photos of my family.

Or you know that thing that some people do, I’m not judging if you do this, but you know when you go out for a meal with a friend and they take a photo of the food? I can kind of understand why they put that on Instagram, but why would you put that on LinkedIn? Anyway, not judging. Not judging at all. But I choose not to do that kind of content as my personal content. But I will just talk about more personal things that are happening to me. So my most successful, my most popular LinkedIn newsletter was one I sent about haters. So I found a piece of direct mail from a few years ago which I’d sent out and someone had sent it back to me with abuse scrawled all over it. So I did a post about that. And that so far has been, or certainly as of February, that was my most popular post. So that was my first lesson.

My second lesson is that LinkedIn newsletters really do reach new people. So you can see this is so cool, sexy even, you can see the names of the people who have subscribed to your LinkedIn newsletters. And I’ve got a couple of thousand subscribers and I sat and looked at them and there were lots of names of people I didn’t know. So these are all MSPs. I only connect with MSPs and select vendors on my LinkedIn account and lots and lots of names of people I don’t know. And that’s exciting, right? Because that means I’m reaching new people that I wouldn’t necessarily have reached before. So this is why you really want to do LinkedIn newsletters because you have that opportunity. People who may be connected with you but don’t respond to your stuff, whereas they may see your LinkedIn newsletters or they may just be subscribed to your LinkedIn newsletters and that’s how they know about your MPS.

And then the final point, my final lesson was that consistency matters and you have to plan around it. So when I started my newsletter, so it would’ve been February, 2022, I made a mental commitment to a year. I do this with any project. When we started this podcast three and a half years ago, I made a year’s mental commitment to it. And by the time the year is up, it had such momentum and such good audience and such good feedback that we’ve just carried on and we will keep doing this for years and years to come. And it’s the same with LinkedIn newsletters. After that year, you couldn’t stop me from doing it. In fact, I was surprised it was a year because it had just become a rhythmic thing for me every single Thursday to publish that. Often I write it on a Thursday, sometimes ahead. But the point is it’s planned in.

I have a series of recurring weekly tasks which I personally have to do. I’m the content creator in the business. I create our own marketing content. So that’s a job for me on Thursdays. And so far, as I say, 60 weeks in, I haven’t screwed it up yet. If you’re going to do this and do a LinkedIn newsletter, either go and find a great source of regular content and I’ll tell you more about that in a second, I’ve got an idea for you, or just have plenty of ideas. See, I might write my content on a weekly basis, but I have a ton of ideas up here in my head. It’s just simply a case of finding some time for me to turn that into the actual newsletter itself. This kind of marketing has to be systematic, it has to be a system. And if you don’t want to do it yourself, you find someone else to do it for you so that you make sure it happens every single week without fail.

Paul’s blatant plug.

So here’s that idea I had about making LinkedIn newsletter content easy. You just buy it from me, from my team. We have a service called the MSP Marketing Edge and we supply you with all the contents and the tools you need to create a weekly system of marketing. It’s all integrated so you’re driving traffic back to your website with regular content. You’ve got blog, you’ve got video, all the different tools. And one of the things that we recommend is you take our weekly blog and video and you turn them into your LinkedIn newsletter. Literally couldn’t be any easier for you. And we only supply this to one MSP per area. That’s how we avoid content clash with our marketing.

So if you haven’t done so already, just go and check to see if your area is available. Go on to mspmarketingedge.com. We have sites for the UK, US, Canada, and Australia. You can pop in your zip code or your postcode and it’ll tell you if your area is available. If it is, you can start a 30-day free trial. There’s no contract, cancel anytime. Now it is possible that your area may already be gone, in which case please do join the waiting list. Sometimes areas become available and when they do, there’s no obligation to buy. You just get first refusal.

The big interview.

Hello everyone, my name is Alexander Abney-King. I’m with Abney Global and I am a workplace psychologist and VCIO.

Thank you so much for joining us on the podcast, Alexander. We want to talk about one of the most difficult subjects today, certainly one of the most difficult subjects when it comes to running and growing your business. And that is people. And by the sound of it, if you are a workplace psychologist, you’ve made people partly your career. Tell us a little bit about your background and what actually is a workplace psychologist.

It is a huge part of any company, isn’t it? I’d like to say that it’s a part of any company that’s not a shell company because it’s the only company that doesn’t really have employees. So as long as you’re not a shell company, this is a topic that’ll be of interest to you. So a workplace psychologist is someone that specializes in psychology and the research around people within the workplace. What we’re trying to understand is how people work, how to hire the best people, but also how to reduce stress within the workplace, take care of people’s wellbeing and optimize productivity through people.

Part of my journey of getting here has been working through IT. I started down as kind of the trenches and the help desk field, worked my way up to an IT director and then CIO level. During this time period, I did go through school and become a psychologist because I realized that IT really is a spot that really needs more focus within how we work with our people and how we use IT to leverage the abilities within the organization. A big example is communication. Whenever we change email systems, we’re fundamentally changing one of the key principles of humans, of how we communicate with each other. That’s a huge undertaking and something that we really need to look at more closely. So that was one of the main drivers for me that started my path into psychology.

I’ll have to ask for those watching this on YouTube, Alexander, how old are you? Because you seem very young to be at VCIO level and to be a trained psychologist as well.

I just turned 30 a few days ago, so yeah, I am kind of younger. I skipped high school, I only went to the ninth grade and then tested out and then I completed my undergrad and graduate school in four years. So that put me ahead of the curve.

Yeah, no, absolutely. And you don’t look 30 either. You have the same curse / blessing that I had when I was 30, which was I looked like I was 20 when I was 30, and now I’m nearly 50, I look like I’m 60. So I guess eventually it catches up with you.

Let’s talk about psychology, and a couple of my very good friends are psychologists and producer James knows who I’m talking about here. They’re both highly trained psychologists, both up to master’s level at least. I think one of them might have a PhD. They’re a married couple and it’s fascinating to hear how they argue because when they argue, they argue in high psychology principles. They’ll say things, I’m going to get the words wrong here, but they’ll say things like, “I completely appreciate you feeling the need to place yourself in that part of the resilient…” It’s all those kind of big words and they’re essentially using psychology as a weapon against each other. But psychology is fascinating, isn’t it? And appreciate that you’ve studied it properly. Whereas, I think many of us find how people tick to be a fascinating thing. Certainly I’m surrounded by lots of books of marketing psychology. What is it about psychology that helps you to be a better business owner and a better employer?

Great question. So for me, wanting to start a business and understanding where we needed to go, I realized that hiring people is one of your top issues, your payroll is one of your biggest expenses. So understanding how to make those hiring decisions was one of the biggest callings for me and understanding how do we create a culture that is going to long last past me, but also be able to make the company go to where I really wanted it to go? So that was one of the main drivers coming into it.

And how have you found it’s affected your approach to technology? Because obviously you were in IT first and then you delved into how people tick. Has that helped you do more with technology? Has it helped you influence people to make more of the right decisions?

Absolutely. So when we look at IT and technology, one of the biggest things is change management. Digital transformation is a word that we hear all the time. It’s kind of an umbrella term, but we really are looking at how do we really effectively enact change? And as workplace psychologists, that’s one of our biggest things. The theories that you find from other people come from workplace psychologists, having the theories, doing the research, testing it, proving it wrong or right and then moving that forward. And so understanding that has really been able to help me come into companies and understand here’s what we need to do to get this organization to really enact those changes and embrace the changes that we’re looking for. How do we get people to want to accept this new technology and this new change? And then be able to enact that successfully.

So certainly within an MSP environment, having a team that are very much used to change and up for change is, I would say, probably the norm because just how often so much change changes within our world. But what are some of the problems that MSPs typically have with their teams?

One of the big problems with any kind of IT field is one of the things that the United States government and a few other governments within Europe, one being yours within the UK understood. And that is I want you to kind of think in your mind of the typical IT worker. They typically started at home at a young age. They tinkered around with their computers and they kind of self-taught themselves. And we see the same thing with an engineering people as well. And the same thing happens. These are people who have a bit of a harder time working with others externally. What makes them so great at being able to solve the complex problems also can hinder them within working with the other people side.

On your website, we see book recommendations. You have two books that talk about introverts, but actually no books that talk about extroverts. It kind of falls into that stereotype that we see of kind of the nerd. So how we approach that is really looking at how do we make it where people can upskill themselves to work better with other people, even though it might not be something that’s innate in their personality at first.

So can you give us some practical examples of the kind of thing that MSPs would do to invest in their people or to help their people help themselves?

So keeping in mind your audience and why people are here is marketing. There’s one specific training that is really good with that. The research that the government did looked at that and realized that when there’s cyber attacks, because of the personality types of IT workers, they were having a harder time during the crisis mode of working with external groups. So in order to resolve that, they spent $3 million to look into the research and how they could create a training program to help engage people in those situations. So it kind of comes out of a situation of a bit like entrepreneurship and starting companies. There’s about 16 different courses that you can take to be able to do that.

A partner of ours, Dr. Daniel Shore, is one of the people that does this and has an entire company that is dedicated to this cybersecurity part. However, it’s not just about cybersecurity, right? When we’re talking about how do we get people to communicate better, to work together, household name brands such as like Procter & Gamble, have been able to purchase that type of cybersecurity training to actually help with their sales teams because it helps you be able to communicate better, to be able to empathize with your prospects better and to be able to sympathize as well. So those are really important aspects of being able to be successful salespeople as well as when you get into a cybersecurity issue, you’ve got these different attacks coming on. We have to work with usually the police, we have to work with the insurance companies and all those types of people that are external groups that we might not feel comfortable with, especially if we’re a bit of an introvert.

Yes, I can imagine. So what’s the answer to this? What’s the work around for it or how do you help your people?

So it’s really going to be about skills up training and finding the right trainings to be able to help them engage other people, start getting them to have techniques that they can employ. Just like a therapy session, how do we deal with stress, anxiety? There’s different techniques that we’ll teach people. And so we use these same techniques to employ, “Hey, yes, it might be a stressful situation. I’m going to have to deal with these people. I’ve already done this in practice. Now it’s just implementing those techniques as well.”

It’s really interesting that there’s been a lot of attention on the wellbeing of technicians and general mental health within the MSP world over the last couple of years. And I think COVID when the lockdown first happened, which is coming up for three years, can you believe that? But certainly the awareness of mental health issues and the acceptability of talking about it and doing something about it has come on leaps and bounds in the last few years. So do you think it’s now… Well, let me ask you directly. When you’re working with MSPs and when you’re talking to them about this, is there generally a wider acceptance that actually yes, we should be investing in helping our people in all aspects of their performance and not just giving them more technical training?

Absolutely. I think all of us have taken a huge mental toll within COVID, right? And we are looking at taking better care of ourself. The quiet quitting movement, of course, is something that’s huge and not really being willing to just take the kind of abuse that we’ve experienced within the job place and really looking at how do we take care of ourselves. So yes, to answer that question, MSPs are looking at how do we take care of our employees? As a lot of MSPs experience, there’s a high burnout rate within the MSP sector, so how do we address that within reducing stress within the workplace and being able to help make these choices that will make the employees feel that this is a manageable workload and that they can continue to invest into the company.

That’s great. It’s so good to hear that. It really is. Alexander, let’s finish off with one final question for you, and that is, what’s the one of, if you like, the biggest insights, one of the biggest “whoa” moments that as a psychologist, as you were growing your skills and training and learning more about how people ticked, you obviously would’ve looked back at situations that you’d been in when you were in IT yourself, what was one of the biggest moments that you had a realization of, “Oh, that’s why that problem would happen regularly. Or that’s why that type of person always acted in that kind of way.”?

It’s something that’s happened more recently and it’s something that’s increasing more and more. It’s the kind of technology challenges around new upcoming hires. We’re seeing that a lot of the new hires haven’t really been taught on Windows. You talk about your daughter a lot on the show, and then she talks about the iPad usage and stuff. They haven’t really grown up on Windows devices. And so what we’re really seeing in at least larger organizations and those co-managed spaces is how to actually successfully get new hires to feel comfortable with Windows and to be able to make that transition successfully, because that’s something that does take training to get people up there and running. It’s a lot different from past generations who grew up using these computers and had a level of understanding.

Yeah, very true. Very good observation. Alexander, thank you so much for being on the show. Just briefly, tell us a little bit about what you do to help businesses and how can we get in touch with you?

Wonderful. So easiest way to get in touch to me is through our website, abneyglobal.com, and what I do is I specialize in digital transformation and workplace psychology consulting.

Paul Green’s MSP Marketing podcast. This week’s recommended book.

Hi, I’m Dan Albaum, author of The Impact Makers: Voices of Leadership. But the book I want to talk about and recommend to you is Value Merchants. And this is so important in today’s highly competitive marketplace, how do solutions providers really maximize the value and the revenue from their developed solutions? And this book is great. It breaks down a whole process around the concept of customer value management, where you use facts and data to support the value proposition for your solutions. So can’t recommend it more. Please go and check it.

Coming up next week.

Hi, I’m Steve Buzogany from The Appreciation Advocate, and next week we’re going to be talking about how most MSPs are poisoning their best relationships and doing so unintentionally and how to correct it.

Wherever you consume this beautiful podcast, please do subscribe. And if there is one, hit the little bell notification thing so that you never miss an episode. Me personally, I subscribe to my own podcast on Spotify and I get a little alert on my phone every single Tuesday morning. I love getting that alert. So please do do that because in next week’s show, on top of that interview with Steve, we’re going to be talking about an active versus a passive sales approach. I bet you $5 that you have a passive sales approach in your MSP, and I’m going to tell you why it needs to become a much more active one. We have a ton of content for you as well at youtube.com/mspmarketing. Join me next Tuesday and have a very profitable week in your MSP.

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