Breaking Through Your Next Revenue Ceiling
Tim Fitzpatrick
MSP & B2B Professional Service Firm Marketing Consultant/Advisor | Fractional CMO | Build and manage your marketing engine to get where you want to go faster. | Remove Your Revenue Roadblocks
Welcome to the Rialto Marketing podcast. Today's episode is a revenue acceleration series interview where we talk to seven figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad and the ugly so that you can learn from their experience.
Join Tim Fitzpatrick and Dan Hernadez for this week’s episode of The Rialto Marketing Podcast!
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Breaking Through Your Next Revenue Ceiling
Tim Fitzpatrick
Welcome to the Rialto Marketing podcast. Today's episode is a Revenue Acceleration Series interview where we talk to seven-figure B2B service farm owners who are actively trying to grow their business and get to the next level. We talk about the good, the bad, and the ugly so that you can learn from their experience. I am Tim Fitzpatrick with Rialto Marketing, where we believe you must remove your revenue roadblocks if you want to accelerate growth. And marketing shouldn't be difficult. Thank you so much for taking the time to tune in. I am super excited to have Dan Hernandez from PCS Technology with me today. Dan, welcome, and thanks for being here.
Dan Hernandez
Great. Thanks, Tim. Happy to be here.
Tim Fitzpatrick
Yeah, I'm excited to dig I'll share this with you. Before we jump into the heart of our conversation today, I want to ask you a few rapid fire questions. Are you ready to jump in?
Dan Hernandez
Yeah, let's do it.
Tim Fitzpatrick
Okay. So very quickly, what do you do? How long have you been doing it?
Dan Hernandez
I'm the CEO of PCS Technologies in the San Francisco Bay Area, and I've been doing this for 35 plus years. It's been a lifelong journey to be in IT. When I first started, it was data processing I've seen. So this has been my only job my entire life, and I just thrive on technology. It's just constantly learning and having the opportunity to help people with their businesses.
Tim Fitzpatrick
Man, 35 years in tech, you've seen A lot of changes.
Dan Hernandez
Absolutely. Oh, God.
Tim Fitzpatrick
So in that 35 years, what's the most important lesson you've learned?
Dan Hernandez
I think the most important lesson I've learned is to really build a team. I've been able to build a team around me that is, in my opinion, best in class as far as having service technical leaders, and then also the admin staff, et cetera, around me, they just all excel and thrive on growth.
Tim Fitzpatrick
Yeah. We can't do it all as much as we might like to, right?
Dan Hernandez
Yeah, not anymore.
Tim Fitzpatrick
So we know in 35 years, man, plenty of ups and downs, Dan. When you guys run into those challenging times, is there any mantra that you say to yourself or share with your team to push through it?
Dan Hernandez
Yeah, absolutely. Our mantra here at PCS Technologies is we get stuff done. We roll up our sleeves and just get things done. One of the things that's made us really successful is we're not afraid to take on challenges and take on projects that maybe other firms would steer away from. And we do that in order to build our credibility and build relationships with our potential new managed service clients. And it's really helped us be really successful.
Focusing on Growth
Tim Fitzpatrick
Yeah, I love that, man. Now, I know when we had connected for the pre-interview, one of the things you shared with me was for a long time, you were happy in your business. It was more of a lifestyle business, if I remember correctly. And then about 10 years ago, you decided to really start focusing on growth. I'm curious, what drove you to do this? And what did you start to focus on to drive growth?
Dan Hernandez
Well, we were always fairly successful. And on my own, I could only get the business to to a certain level. And then we had hit the ceiling on being able to generate more revenue. We would lose a couple of customers, and over time, gain them back. And it was a roller coaster on adding revenue and increasing profitability. So about 10 years ago, I was invited to a roadshow by Robin Robbins, who's a big person in our space, the managed service community. And I was hooked right away. I love the community. I love the peers. And I joined her producers club group and really just excelled at learning, learning all the new ways to sell managed services, to market ourselves and to build a good team.
Tim Fitzpatrick
Yeah. So at that time, were you still the one... Were you heavily involved on the marketing side of things?
Dan Hernandez
Yes. I had just gotten out of being a tech. After 20 years of running around, fixing servers, tearing apart server rooms, I finally got myself out of that role because we hired a couple of really good senior engineers, and I was able to make that move. And once I did that, I've always been the sales manager, marketing coordinator, appointments setter, wore every hat. And then really building structure and a process around that is what started to happen when I met Robin Robbins.
Tim Fitzpatrick
Yeah. Kudos to you for doing that, because I think it's... When marketing sales are not our primary skill sets. Man, it's really hard to manage that stuff unless you get help, right? And to level up those skills and become more comfortable with it. And I think, especially early on, I mean, it's really hard to just say you're going to outsource everything without having a general base of knowledge that you can work from. So I think you made a huge right step there in doing that. And to this day, are you still involved in managing and overseeing marketing?
Dan Hernandez
I am. One of the goals for this year, probably towards the end of this year, is to hire a professional sales and Marketing Manager to get me out of some of those boxes. And to be honest, after doing this for 10 straight years, I'm getting a little worn out and really need to focus on the vision of PCS and also on the closer. So having someone be able to bring me more leads, et cetera, and work with the team in this area is going to really take us to the next level.
Becoming a More Effective Sales Person
Tim Fitzpatrick
Yeah. It's funny you mentioned driving sales because I know you made the choice to build through owner-led sales. And I know in the MSP space, there are a lot of MSPs that they're trying to get themselves out of sales, and they do it as quickly as they can. But you made that strategic choice to not do that. I'm curious why and what's helping you become a more effective salesperson?
Dan Hernandez
You know I got to admit, it's been one of the hardest things I've ever done is really change that hat from being the technical resource to being the sales guy. And so I think we tried everything. We tried at a low cost, hiring an in-house salesperson, an appointment center, a marketing coordinator. We outsourced marketing and lead generation to three different firms and really did not generate anything that would have the ROI we were looking for. So working with our accountability group and my other peers across the country, we made a conscious decision to really go after our niche marketing. And once we did that, things really started to grow for us. Our niche is nonprofit space. I joined a board for one of the oldest nonprofits in the San Francisco area and became a leader on that board. I was a three term president due to COVID and really started networking at a higher level. At the same time, we also started sponsoring a few gala events and being seen out in the community by other executive directors, other nonprofits, and really building that network.
Tim Fitzpatrick
You said something about once you decided to focus on niche marketing, things really started to take off. And selfishly, I want to highlight that because I talk about this all the time on the marketing side, and so many business owners are just scared to make that jump. And I think the thing that's important, I mean, nonprofits are not your only... The only types of clients you work with, but you've chosen to focus your marketing efforts on them. Is that correct?
Dan Hernandez
领英推荐
That's correct.
Tim Fitzpatrick
Okay. Huge distinction, right? Because a lot of people feel like, oh, if I niche, then I'm not going to business with anybody else. It's not necessarily the case. But when you chose to do that, you just touched on some of the things that you did to get in front of nonprofits, right? And when you did that, the activities that you did from a marketing standpoint became much more targeted. Rather than going to a general networking event hoping that you're going to talk to somebody there, you join a nonprofit, as part of the board, right? You really get to understand some of the challenges that they deal with. You go to nonprofit functions. Well, people that are there are either going to be people that serve nonprofits or they are nonprofit, right?
Dan Hernandez
Absolutely.
Tim Fitzpatrick
So you're really fishing where the fish are. Do you remember... It sounds like that focus of niche marketing came from some of your peer groups and other peers that you network. Do you remember specifically how that came up?
Dan Hernandez
Yeah. The first day at Robin Robbins, when we joined Producers Club and went to a Producers Club meeting, it was building out your niche. And we were one of the few companies, there were probably several hundreds there that had a niche or had an idea for a niche. And so we really embraced it and really started focusing our marketing efforts at it. And now I'm happy to say we have almost 50 nonprofit customers and that's growing from beyond the Bay Area and to a national level at this point.
Tim Fitzpatrick
Do you remember how long it took you to start to see some traction in the niche once you decided to focus on it?
Dan Hernandez
It was immediate. We were doing Bulky Mailer campaigns and the old-school marketing, and we got a good response right away. Just a company that understands the language of a nonprofit, how they get their funding, how we price them. Our nonprofits are well-funded and need technology and need to be protected from cybersecurity threats. So it really just took off immediately once. And we do other niches now, and I see the growth in those areas as well.
Tim Fitzpatrick
Yeah, I love it. I appreciate you sharing that. And just for people watching or listening, it doesn't always happen immediately. But it does happen when you choose to start focusing your efforts. And the efforts become much more effective because they are focused, right? One of my mentors always talked about specificity sells. The more specific we can be with our marketing, the more effective it's going to be. And you touched on it, Dan, where just the terms you use, the language that they use, you are now able use in your messaging, and that makes it resonate so much, so much better.
Dan Hernandez
I think the key, Tim, was it changed our status as being a board president. Now I'm on the board for the San Francisco Giants Community Fund. And when you're talking to nonprofits and you share your story of the work you do in the community, and right now we support 35,000 kids playing junior giants and things like that, there's an immediate connection at a higher level. And that was the game changer for us, where they knew I was speaking their language and became a very trusted advisor pretty rapidly in this space.
Tim Fitzpatrick
Yeah. And when we talk to clients about focusing on who their ideal clients are, one of the aspects of that is what we call an ideal client GPS, which is just a list of all the places that your ideal clients are. And in your case, for example, when we look at nonprofits, it becomes so much easier to identify where nonprofits are than if you're saying, where are small businesses? You get much better answers because they're more specific. Where do nonprofits congregate? What trade shows or conferences do they go to? What types of other vendors support the nonprofit space? Are there podcasts they listen to? Youtube channels they watch? All of these things, when we get specific, man, the output we get is really, really strong. And then you've got this list of, okay, I'm not going to be all of these places. That's impossible. But where am I going to start?...
Dan Hernandez
Yeah, with us, my thing is constantly learning. So I'm listening to audible books constantly. I travel four or five times a to my peer group meetings and other IT type sessions. And in that process, I really understand my market. So I know there are 3,278 nonprofits in the San Francisco Bay Area. There are 62,000 businesses in my sweet spot of 50 to 150 users in the San Francisco Bay Area. So there's a lot of opportunity out there.
Tim Fitzpatrick
Say that again one more time. Your ideal nonprofit. How many are there in San Francisco Bay Area?
Dan Hernandez
3,278.
Tim Fitzpatrick
Okay. I want to point this out because this is... Thank you for bringing this up. 3,000. Most people, when we start talking about niching and focusing, think they're going to lose business. When in reality, if there's 3,000 of those in there, how many new clients are you looking for in a given year? I mean, most MSPs would be stoked if they were getting a new client a month. Well, at a 3,000. Okay. I mean-
Dan Hernandez
The initial goal is to get 10 % of that market space. Right now, I don't know what percentage we're at, but we're about 50 out of the 300 we need. So there's a lot of opportunity for sure.
Tim Fitzpatrick
Tons. So even if you... You may not have to narrow geographically, but even narrowing geographically into a very specific industry vertical, there's still plenty of opportunity in the vast majority of markets. You know the market because you've spent the time to do it, and it gives you a huge, huge advantage, I think.
Overcoming Challenges in Hiring an In-house Marketing Team
Tim Fitzpatrick
We're still going down this marketing path. You touched a little bit on your marketing journey. One of the things you mentioned to me was that you've tried to hire in-house multiple times, and now you're working with an agency. Tell me more about that. What challenges did you have hiring in-house?
Dan Hernandez
I think a big part of it was I wasn't able to focus and manage the in-house resources. At the time, I was still running finance, and I was in many boxes, project, service, sales, and it was just impossible focus on the sales and marketing business development. Since then, in the last several years, we've implemented Traction, which is EOS, and EOS is our operating system of our business. And it allowed me to get out of a lot of those boxes and elevate other staff members so I could really focus on business development. But what I've learned is we outsource our marketing to a local firm here in San Francisco that really understands our market. They understand our niche. So rather than having a single marketing coordinator at an appointment center, I actually have a team of people managing email campaigns, drip marketing, events, SEO. And I have in that team a Marketing Manager that I meet with on a regular basis. And then I have other resources, design and ability to produce, all those areas that just one person would be overwhelmed with or not have all the right skillsets. So it's similar to outsourcing your IT, you get a team of professionals instead of one. So that was one of the best moves I made was hiring Spritz SF here in San Francisco. But then also it's just generating multiple gears to generate leads. So we have multiple marketing gears in place where we generate leads. And if we only had one or two, we would be struggling.
Tim Fitzpatrick
Yeah. Yeah. One of the analogies I always use is like riding a unicycle. Most businesses are all their business is coming through a referral or word of mouth. And if the tire goes flat on that unicycle, you're not going anywhere. But if you're doing referrals and you're generating leads through two, three other channels, well, then you're on a three wheeler or a four wheeler. And if the tire goes flat, you're still going to get there. It might take you a little bit longer than you expect it, but you're not as dependent on any one marketing channel. And that's a much more stable and consistent, reliable place to be. So thank you for bringing that up. So what's next? What are your goals moving forward?
Dan Hernandez
Well, I'm happy to say, pretty blessed that we reached our last three-year goal within two and a half years. So we've hit our three-year goal the first six months of 2024. Having that said and looking at all the opportunities that we've been coming across, working with a couple of other partnerships with high-end security, cybersecurity, cybersecurity compliance as a service, and really dialing in a whole new line of business. And I feel very comfortable now that I've been working on this for about three years, that we're launching a new line of business, where we can service companies across the nation, to help them become compliant. So we launched Compliance as a Service this year, and it's been really successful, in helping nonprofits become HIPAA compliant, helping the attorneys become SOC 2 compliant. We're finding that our customers are being held to a higher level of compliance by their clients. And so this is a really big part of IT these days. So we have dialed that in, and I really know how to sell it now, which is a huge step in the right direction, but we can also deliver on it now. So in 2025, we've already rolled it out in 2024 at a small scale. We're really launching this on a national scale on 2025. So my goal is to double the business again in the next two and a half, three years.
Conclusion
Tim Fitzpatrick
I love it, man. Awesome. So I want to ask you one last question before we wrap things up. Knowing what you know now, is there anything you would do differently?
Dan Hernandez
I would have started this earlier. I would have got out of the service 5, 10 years earlier and really started building the team and growing the business earlier. I couldn't imagine where we would be today if I would have got out of the rut of being a tech and started to really looking at working on the business instead of in the business. And I actually enjoy it more. Being the visionary for PCS is something I love doing. I have 20 ideas a day. Maybe only one is any good. But we work through that process. And then I got really good at what I do. So why would I quit now? So I'm loving doing my role. And as long as we're having fun and growing the business and growing people, we're going to keep at it.
Tim Fitzpatrick
And as part of EOS, you had mentioned you're the visionary. Typically, you'll hire an integrator type person. Do you have a COO that you hired as part of that process? What does that look like?
Dan Hernandez
It's an amazing story. My CEO integrator is actually my wife, Samantha. And we've been married now 17 years, 18 years. And she's fantastic at the day to day operations. She doesn't want to be client facing and and do sales or anything like that. But she's really good with the H. R. Part of our team, building the culture, and taking the reins of running the level 10 meetings in all these different areas of the business. And the beauty of it is, who could I trust more in managing finance? And that was a hard one to step out of. But now that Samantha is my integrator, it's taking us to the next level.
Tim Fitzpatrick
Yeah. How many team members do you have?
Dan Hernandez
Currently, we just added our 25th member. So we've added five people this year already.
Tim Fitzpatrick
Yeah. I like to ask that sometimes because it gives people an idea, because sometimes people think like, I'm too small to do that. And I think no matter how small you are, there are always opportunities. But systems or people in place that can help slowly take you out of the things that you need to get out of. And it doesn't always have to be a full-time hire either. I appreciate you sharing that because you're big enough at this point where it makes sense for you to do that. But at the same time, 10 years ago, when you made the choice to start investing in marketing, how many people did you have at that point?
Dan Hernandez
Probably eight or nine. But It's fake it until you make it, right? We always came across as a professional firm, a high level service, immediate response. And we continue that. And that's the culture here at PCS. People want to be elevated and grow. The reason why we have almost no turnover in technology staff is because they have growth opportunities here. And that thrives the staff to want stick around.
Tim Fitzpatrick
Yeah, yeah. It's awesome. Dan, I really appreciate you taking the time in. You dropped some really good stuff today. Where can people learn more about you?
Dan Hernandez
Just on our website, pcs-sf.com. You can find me by sending an email to the contact form there, and I'll reach out right away and love to have any conversations around supporting not only IT, but any cybersecurity concerns and compliance issues that you may be facing.
Tim Fitzpatrick
Awesome. I appreciate it. So pcs-sf.com. We'll make sure that that gets in the show notes as well. Dan, thank you again. And those of you that are watching, listening, thank you. If you want to connect with us, you can do that over at rialtomarketing.com. It's rialtomarketing.com. If you want to know which of the nine revenue roadblocks are slowing down your growth, you find that out over at revenueroadblockscorecard.com. Takes less than five minutes. Get a customized report and start removing those roadblocks so that you can grow. So, Dan, thank you again. Audience, thank you. Until next time. Take care.