First, a tip of the hat to iTunes user callypgian, who left Frankly MSP this review:
I’ve been listening to Frankly MSP from the start and it has had a measurable impact on our SF Bay Area MSP. I’ve even gone so far as to write down quotes from the guests and share them in all staff meetings as inspiration for a discussion. My favorite was Don Crowley’s analogy comparing technology to a foreign language from Episode 009. I hesitated to write this review, wanting to keep all the amazingly useful content to myself, but the IT community has always been a place of sharing and helping each other. Any MSP that’s willing to take the time to learn from this podcast and implement the suggestions within deserves the success that comes with good business practices. I also wish great success for the smart and friendly folks at Auvik. They’ve got the best network management platform on the market. This podcast is an incredible value-add from a company that has been focused on helping MSPs from the start and truly understands the market.
Thanks, callypgian! Glad to hear we’re hitting the mark.
Brian Dosal, the co-founder and CEO of BrightGauge, is my guest today. BrightGauge is a software company that offers amazing data tracking and dashboarding for MSPs. BrightGauge was born from Brian’s experience leading sales and marketing for an MSP and needing a place to pull together and work with success metrics.
Brian and I got talking about numbers and the idea that everyone in your company should have one they’re working on. We talk about why this idea of a number is so important, how to pick the right numbers your team members will track, how to incent and just as importantly how not to incent people to work on their numbers and lots of other tips and tricks along the way.
What’s Going On
[03:11] Jamie Warner (eNerds) and Nigel Moore (The Tech Tribe) are here to give us an Australian perspective on What’s Going On.
[03:24] An article that recently caught Nigel’s attention was How Much Should You Really Be Paying for Ads in An MSP? The article talks about how much an MSP should be spending on Facebook ads, LinkedIn ads, or Google Ads.
[03:49] A lot of MSPs that Nigel speaks to really struggle with how to pay for advertising.
[04:12] The most common method we all use to generate new business is referrals. But advertising is important too.
[04:51] Using Google Ads has been the backbone of growing Jamie’s MSP.
[04:57] Google Ads connects you to your potential customers who are actively looking for a service provider. They are deep down in the sales cycle.
[06:15] A big mistake people make is trying Google Ad for a short time, spending a couple hundred dollars, and then giving up.
[06:27] One of the main metrics to look at is your CAC, cost of acquiring a customer.
[06:59] The second metric people overlook is LTV, the lifetime value of the customer.
[07:40] You have to spend a little upfront to get clients in the door but the LTV makes it worthwhile..
[08:31] When you sign a client at $1,000 per month and your average retention is 60 months, that’s a lifetime value of $60,000.
[08:53] If it costs you three or four months of that to land the customer, it’s worth it in the long term.
[10:16] You typically should be spending more on ads if you want more clients.
[10:27] Nigel recently read an article about Microsoft Managed Desktops.
[10:38] This is where Microsoft offers its users an entire desktop for a fixed monthly cost. Services like support and help desk are also thrown in.
[11:01] This probably won’t make a dent in the business of MSPs just like when Office 365 offering Exchange migrations didn’t make a dent in the MSP business.
[11:53] Small business owners love to deal with other small business owners. MSPs are the buffer between big businesses, like Microsoft, and small businesses.
[12:31] This is just another iteration of Microsoft trying to grow their revenue.
[13:34] The managed desktop from Microsoft will be perfect for very small companies but MSPs need to move up the value chain a little bit.
[14:04] Our ideal clients are 20 seats and above. They have more complexity.
[15:12] Nigel sees the Microsoft news as an opportunity for long-term partnerships.
[15:38] It’s an opportunity to take a step up and be more of a trusted advisor instead of worrying about patches.
Interview with Brian Dosal: Why Everyone in Your MSP Needs a Number
[18:06] Peter Drucker said, “You can’t manage what you can’t measure.”
[18:32] As teams grow, they become harder to manage. One of the best disciplines that Brian follows is to give everyone some sort of key performance indicator (KPI).
[19:15] In Gino Wickman’s book Traction, he discusses a data component and states that everybody in the company should have a number.
[20:22] Google follows objective key results or OKRs.
[21:22] Your goals have to be specific to a behavior you want to change. They should be changed every few months or so or they become the norm, and you don’t want that.
[22:24] The Traction world and the OKR world are all about changing things. They’re about personal buy-in and personal accountability and letting people manage their numbers.
[23:03] Building numbers into the business starts with being very transparent about your own numbers as the leader. Brian has monthly meetings where he goes through all the numbers and explains what’s good and what’s bad.
[23:58] Most of the metrics talked about in the meetings are either Brian’s metrics or the company’s metrics.
[24:20] Emails go out with people’s numbers, but it’s kept within the teams.
[24:49] Everyone in the company has a number, even the accountant.
[26:07] Even numbers that seem silly or insignificant can be used to know to identify gaps or know when it’s time to hire. Brian uses the example of his brother, who was responsible for operations and whose number for a time was how many days the office was without water.
[26:19] Number help you visualize your company.
[26:56] Having visibility on shared dashboards is a great idea.
[28:09] Best practice would be to have some sort of roll-up team dashboard with metrics on it and then each person have their own individual metrics that they’re tracking.
[28:22] Andy Grove, the former CEO of Intel, said you’ve got to have one number for some type of performance and then a balance KPI. For example, you wouldn’t want a singular focus on closing tickets if you were angering clients at the same time. So the balance KPI in this instance would be customer satisfaction score.
[28:45] A risk is having too many things to focus on. One is OK. Two or three are ideal. Not 45 as Brian has sometimes seen.
[29:20] Avoid monetary rewards for hitting KPIs. Group rewards and celebrations work best.
[31:04] The first step is to just start. Start for a quarter and see what happens. Begin with yourself and your leaders and go from there.
Links from this episode
What’s Going On
- How Much Should You Really Be Paying for Ads in an MSP?
- New Microsoft Managed Desktop Service Raises Implications for MSPs
- The Man of a Thousand SOPs – FMSP 008
- The Pyramid for MSP Success – FMSP 029
- Nigel Moore (Twitter)
- Nigel Moore (LinkedIn)
- The Tech Tribe
- Jamie Warner (LinkedIn)
- Invarosoft (makers of ITSupportPanel)
- About Peter Drucker
- Traction: Get a Grip on Your Business by Gino Wickman
- Getting a Grip on Your MSP Business – FMSP 006
- The Ultimate Guide to OKR
- Brian Dosal (Twitter)
- Brian Dosal (LinkedIn)
Like what you hear? Listen and subscribe.