How Do MSPs Prove Their Worth? It Ain’t QBRs.

One of the questions I get asked most frequently by MSPs is What are the most effective ways to prove your worth to a customer?

In many cases, the question is even more pointed than that. It’s often posed as What’s the most effective way of providing my customers a QBR (quarterly business review)?

Spoiler alert! The remainder of this article doesn’t talk about how to do that in any way, shape, or form.

In fact, if you asked me the most effective QBR methodology I employed for my MSP, I’d simply tell you I never ran a single customer through a QBR—ever. Twelve employees, $4.5 million in annual revenue, over a thousand clients, and I never needed a QBR to prove my worth to a single one of them.

OK, so how is this even possible? How can that be when virtually every single “thought leadership” piece in the space preaches the delivery of QBRs as if it’s chiseled in stone? Here’s precisely how.

While many MSPs find QBRs as an opportunity to review all of the 50,000 things they did during the past three months, automated or otherwise, I always envisioned this process as something else entirely. I imagined placing all of my customers into a DMV-like queue, because this is effectively what the practice of QBRs teaches you to do.

“Next! Number 497. Does anyone have number 497? Ah yes, Mr. Smith, I see here that we processed 4,197 RMM alerts from your, it says here, 57 computers? Yes, my fancy QBR report here is telling me we also encountered and remediated 27 malware threats. We patched 1,750 updates, and wow, we ran 6,000 scripts! Impressed? You should be!

So… do you still have the mailing address to send next month’s check?”

Sure, maybe your process is fancier than that, maybe it isn’t. Point being, this type of methodology turns customers into numbers, and what’s worse is that you’re trying to push your value onto them by focusing on arbitrary numbers they rarely, if ever, have the context to even quantify.

For example, if you patched 1,750 updates is that even good? Is that bad? Where do other companies of equal size fall in comparison? It’s like telling me my landscaper just mowed 47 million blades of grass in my backyard. When I look outside my lawn looks just fine to me, regardless if I know how many individual blades of grass they mowed.

You could try and simplify things by reporting the inverse (I’ve seen a fair amount of MSPs attempt this) by saying we’ve kept everything up to date perfectly… except for these seven assets that are missing 22 patches in total. Here you attempt to showcase your value by, well, showcasing you’re not doing your job effectively. You definitely don’t want to lead with this approach either.

How do you want to be perceived?

So what’s the right answer? To be quite frank, it’s less about the “right” answer and more about how you approach your place within your customer’s world and how you ultimately want to be perceived within that world.

Do you want to be perceived as the company that automates 50,000 checks and monitors behind the scenes? Or do you want to be perceived as the company that represents a critical instrument in their customer’s arsenal? A company that both competently and consistently provides IT solutions to problems they assumed they’d just have to live with forever?

If you’re meeting with your customers regularly, and you definitely should be, stop trying to focus, with a QBR report, on telling your customer what should be important to them, and instead try focusing on what they think is important to them, particularly right now, in that moment.

If they have no perceived problems, there’s little reason to deep dive into that further. Find out what else is going on in their business, what other pain points they’re suffering through. You want them to leave that meeting feeling like you were going out of your way to discover what else your MSP might be able to do for them above simply providing “managed services” like you all agreed to initially.

The reason this approach is exponentially more effective than a standard QBR is because perceived value dwindles with time. Every customer starts with their litany of pain points the moment they sign your contract, but in theory, you’ve long resolved those problems and have moved them into a more automated approach since then.

In other words, you flew in with your cape and took care of business. Now, you’re like a superhero in a world without any bad guys left, and without any more bad guys to fight, it’s quite easy to forget what made you a superhero in the first place.

How to continue being the superhero when there are no bad guys left

Case in point: I landed a large retail franchise during the early days of my MSP. They had a high number of retail locations as well as a few regional offices. This place was in shambles from a technical perspective, and they were living with some seriously outdated technology. It took us a week to outline how we wanted to attack this, and we spent the next seven weeks executing that plan to a tee. By the three-month mark my MSP had achieved superhero status in their eyes.

Unfortunately, we’d done such a great job of solving virtually every problem they presented and then some, that they were largely on autopilot by this point. We received so few support calls over the next few months I was absolutely positive there was no way I was going to get them to renew with us again when their annual agreement expired.

When I met with them at the six-month mark, we were still well liked and appreciated, but it was no hero’s welcome by any means.

At the nine-month mark, it felt a lot more like What have you done for me lately? They were now paying us a huge sum each month, and we didn’t have a hell of a lot to talk about other than the 2,500 Windows updates, and the 50,000 checks and monitors, and so on and so forth.

To make matters worse, at this level of contract revenue your value is always being weighed against shifting those resources internally instead toward dedicated in-house IT staff. I’d been in business long enough to know exactly how low the prospect of renewing this contract was becoming.

I happened to be in a meeting at one of their regional corporate offices one day. They had intended for me to meet with their district staff, but they accidentally scheduled me on what they called their “paperwork day.”

When I inquired, I was told this is where all of their retail locations would fax in their weekly payrolls. Yes, fax. I threw up in my mouth when I heard that word too. They’d then distribute their faxes to each district staffer, who would then confirm the hours were accurate, manually enter this all into spreadsheets, and then the bookkeepers would enter the data into their accounting system for payroll. This happened every single week.

As it turned out, they were spending over 100 hours a month on this, and it wasn’t just admin staff’s payroll the job was consuming, it was the district staff’s payroll as well, and that was quite expensive.

Keeping the golden goose for eternity

I told them I had an idea how to fix it for them. They waved me off and said it wasn’t part of our agreement, so I didn’t have to worry about it. I wasn’t worried about the 30 or so hours I’d estimated I’d have to invest in a solution—I was worried about keeping this golden goose on the books for all eternity.

So I took it upon myself to pilot a solution at a small subset of their retail locations. All I did was throw Dropbox onto their machines, sync that up to one of their office machines, had the retail outlets export their payroll into an Excel document, dump it into Dropbox, and I had an Excel macro I worked on that aggregated all of that data and put it into a format the bookkeepers wanted.

The end result on my side took me roughly 35 hours in total to deploy globally once they fell in love with it. On their side, it took the 100+ labor hours they were spending on the task each month down to 15. My investment saved them 85 hours of labor expense each month.

Sure, I still maintained their networks, monitored for threats, blah blah blah. But to this day if you ask them why my MSP was so valuable to them, they’re not going to mention a single one of those things. I saved them 85 hours of labor costs month in and month out, for something they thought didn’t fall under my purview. This is why they continued to sign with me again year after year, and this is why I had no qualms about increasing the contract pricing year over year either.

Meeting with your customers to partner with them

This is what meeting with your customers on a regular basis is all about—not about numbers in a QBR, but partnering with them to find business solutions only your technical acumen can accommodate. It doesn’t matter if you’re being paid to do it or not. Over the six-year span I operated my MSP, the lifetime value of this customer was more than $750,000. Had I continued talking about nonsense they didn’t care about, they would have been gone at the 12-month mark.

You can easily discern when any customer has crossed this Rubicon. Every customer will of course contact you with everyday support problems, but customers that truly consider you a partner in their business will always send a healthy amount of requests asking how to do something that will improve a flow, expand their reach, or increase their revenue outright. You’re no longer their IT provider, you’re their business partner. Treating every customer interaction like this is what guarantees you customers for life.

The bottom line here is that ensuring the longevity of your MVP customers is a core component to true MSP growth. If you treat your regular meetings with your base like something you “have to get through,” it’s not likely you’ll be having to get through them for long.

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Did you enjoy this straight talk from Andy Cormier? Then you’ll love So You Want to Be an MSP, the book where Andy pulls back the curtain on his successful MSP business to show you exactly how he built it. Grab your free copy of Andy’s book here.