In our third webinar searching for the perfect QBR, I spoke to Rob Rae, a former colleague of mine from Datto, and the current CVP of Communities and Ecosystem at Pax8. He’s excited to be in the midst of planning Pax8 Beyond, their first user conference (June 11-13, 2023), with a ton of amazing tracks, tailored to different personas for maximum value.
He took some time from his planning to speak with me about the changes he’s seen in the channel from when we were coming up– over 20 years ago!– to now, and where he thinks it’s going in the future. In the midst of excellent insights into the channel at large, we also got into the nitty gritty of how MSPs should be approaching QBRs to make sure they set themselves up for longevity.
Watch the webinar for the entire discussion, or read on for my biggest takeaways from our enlightening conversation.
We started by speaking about how the channel looked over 20 years ago, when we started in IT. In 2000, MSPs were more in the hardware business than the service business. Services were often free add-ons that would help secure a hardware sale. Instead of recurring revenue, businesses in the channel were jumping from sale to sale.
But MSPs had to pivot when a few variables made hardware sales an untenable business plan. First, sellers began bypassing the channel and selling directly. In 2008, the economic downturn made it less feasible than ever to rely on sporadic, one-time sales, and forced MSPs to look into plans for recurring revenue.
The rise of cloud technology adoption opened an avenue for recurring revenue that hadn’t been there before. MSPs had to figure out how to provide services that would bring extra value to new software technologies, and build on a recurring revenue-based business plan.
Like most things in history, Rob believes that the evolution of the tech world is cyclical. When we started in the channel, it was all hardware sales– one-time revenue. Then we moved to a service-based model, and to recurring revenue.
Rob has a theory that now, MSPs won’t be leaving recurring revenue, but will be able to add a lot of project work, or one-time revenue, related to SaaS applications. And the best way to educate your customers about the SaaS apps that can help their business, and add project-based revenue to yours, is by coming ready with value to your QBR.
All MSPs know this story: the customer doesn’t see you, but is paying the bill every month. It means that everything is working well. However, you’re also subject to getting the call that asks what exactly the customer is paying for, because they don’t see you.
Rob mentioned that he runs into MSPs who literally go into their end user shops and work from there– not on that customer, because there’s nothing wrong or anything going on in there. They just work from their customer’s office to be physically visible. You can use QBRs and smart communication with your clients to avoid these extreme measures.
As we’ve discussed in previous webinars and blogs, you shouldn’t approach QBRs as a way to justify your existence. You can and should have a strong relationship with your customer, where they see you as an expert who will help guide them through rapid-fire changes in technology. Your QBRs should help customers understand what differentiates you, and how you can bring value to their business.
When you step into a QBR, you should be ready to emphasize your biggest differentiator: you. You are the expert who knows not only what’s going on with your customer’s tech stack, but what’s going on in the channel, what’s coming up next, what they should or should not worry about, and new technologies that could help or harm their business. Business owners should be able to rely on you to be their expert on everything tech.
While many people know a little bit about tech, you can’t expect your customer to stay on top of it. It’s your job to invest in this knowledge and to figure out how to make it applicable to their business. You should know what’s keeping them up at night, and have an eye out for technologies that can help them achieve more peace of mind.
As Rob said, you create stickiness by looking and acting genuinely interested in their business. Also, people like to do business with people they like. People like having their questions answered, and knowing they can rely on an expert to have their best interests at heart.
MSPs have a distinct advantage in this knowledge over in-house IT due to the nature of the channel. We have a community where we talk with each other– this webinar being one example of many! Our community helps us learn, grow, and constantly provide more value to our customers.
As MSPs go up market, they can explore co-managed opportunities starting with project work, which will lead to potential recurring revenue or even even more outsourced opportunities. Rob believes that this shift is coming because the world is moving faster than the human being can even comprehend. If MSPs stay focused on this and continue to be those experts, the managed services space is primed to win all day long.
When you’re approaching customers at a QBR, it’s crucial to position yourself as a VCIO, instead of a Virtual Captain Obvious. What I mean by that is less acronyms, more actual value. MSPs have to stop dumping information-dense and insight-light data onto their customers and expect them to parse the value.
As an example, if you’re sending weekly reports of data that is too technical, where they have to work to find meaning, you’ve wasted an opportunity in that communication. Worse, you’ve primed them to ignore what you say, because they’ll get those weekly reports and start archiving them without a glance.
So when you do have something important to say, it’ll be an uphill battle to get your customer to even begin listening to you, let alone finding value in your knowledge.
Rob argues that as technologists, our default feed is to go right to where the tech is, with a focus on the features. Instead, you need to focus on the value of the tech. While you can privately nerd out over amazing specs, you need to approach your customers with a value-based approach to new tech that they can easily understand and apply to their bottom line.
Project work originates when you introduce value alongside new tech. If you really want to get a lot of project work doing QBRs, ask your customer if they’re happy with the apps they’re using. If not, offer them a better app.
If you already have a solution for them, excellent, If not, offer to research for them, implement it, move things over, and get it backed up. Make it easy and valuable for them to have you as the expert guiding them through new tech, creating even stronger relationships.
While many of us are drinking from a firehouse in terms of the information and technologies that are constantly being churned out, you should be handing your customer a nice, cool, and manageable glass of water. Give them information they can use, not all the information you have.
Rob argues that MSPs should evolve past being a solutions-based business partner into being a strategic business partner. He says that a QBR is a phenomenal way to start conversations around what technologies are in the market, and how they may be able to help your customers’ business, if not now, then in the future. You can let them know if you see potential issues with any of the tech they have in their stack, or potential issues or solutions related to new technologies.
As an example, with all the chatter and discourse around AI tech right now, you want your customers to turn to you with questions. And you need to be able to tell them where you think AI applications could help or harm their business.
While they may not be planning to add ChatGPT to their stack, you want them to come to you with intelligent IT conversations so you can fill them in on the tech world. The QBR beautifully sets the stage to be able to chat with your customer and take a moment to talk about what the future looks like.
A great analogy Rob had was financial analysts. Why do they still have jobs when there are apps like Robin Hood that make it easy to buy and sell stocks? They’ve pivoted into advising investors on what to do, and doing it for them. They’re focusing on financial strategy, not just solutions.
He believes that that’s where the tech world is going as well. It is becoming possible for customers to add apps to their tech stack without an MSP. However, will it work the way they intend? Will it mesh with the rest of the tech they have? Being able to have big-picture technical knowledge is like the economic knowledge a financial analyst has. Use that knowledge to your advantage and build from piecemeal solutions to a larger technical strategy.
Being able to track app usage can help demonstrate value in not only the software you’re deploying, but how you’re deploying it, and how you’re optimizing. If you can continue to make a more and more robust value add, they can’t leave you, because you’re providing them valuable data that nobody else can at this particular point.
Rob sees being able to track SaaS app usage, and providing end users with clear, valuable data is a differentiator both as an MSP to customers you already have, and also within your own competitive market. He thinks it could be a game changer not only for QBRs, but also for overall communication with customers.
Back in the RMM days, a client would call an MSP to report a problem with their server, and the MSP would send someone. Today, that wouldn’t happen, due to proactive monitoring and upgrades. It’s extremely valuable to be proactive about problems before your customer even knows they exist.
With a software tracking app like Zorus Engagement, you’ll be able to be proactive with your customers, and provide them even more, and more valuable information than ever before. For example, you’d be able to see a person in the finance department using Excel for 30 of their 40 working hours.
When you see something like that, you can let your customer know there is an issue, and also immediately be able to provide a proactive solution. Instead of being on the back foot with technology your customer needs, you can hand them a financial app you’ve already researched, that you can seamlessly implement for them, boosting their productivity and adding value to their bottom line.
Not only could you help their bottom line by boosting productivity and efficiency, you can help your customers prevent attrition, one of the costliest parts of doing business. If you see that someone is working 80 hours every week, you’ll be able to tell your customer that they may not be working there for much longer, helping them become the proactive leaders they need to be to increase their operational maturity.
I relate this data to the information we get from smart watches. People (like me) who have never worn a watch before suddenly can’t live without them. The information I get from my watch is so valuable to me that I can’t imagine being without it anymore. I predict that app engagement data will be the same way– 10 years from now, not knowing how your SaaS apps are being used will be a thing of the past.
The bottom line is that you should be using your QBR to tell a value-add story. MSPs can be differentiated by how they tell that value story and what kind of data, connections, and expertise they can offer.
It’s critical to balance the technology with the business purpose. That’s where things get really rooted in reality. We all love to go on the nerdy side and just be amazed when such cool technology is coming out. But when you bring new technology to your customers, it has to be more than cool. It has to be more than innovative. It even has to be more than revolutionary. It needs to be valuable, and it needs to be easy for them to understand the value.
If you use QBRs to bring value to your customers, it’ll be easier than ever to step into the role of VCIO, rather than the dreaded Virtual Captain Obvious.
For more valuable QBR insights from our conversation, watch the full webinar here.
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