Every MSP's MOST Dangerous Competitor

The other day I was consulting an MSP client who was starting to get appointments from the marketing (yeah!) but was unable to close a single deal, therefore frustrated and on a call with me to figure it out.

He said he lost every sales opportunity to cheaper MSPs (or likely break-fix guys) and had no idea what to do. ALL of the leads were qualified and he felt he should have closed them - but he's chronically getting beat by MSPs who undercut him in his area. I asked him what his prices were to see if they were grossly out of line. They weren’t. In fact, they were slightly below average for the types of MSP that we work with (roughly $120 to $130 per seat).

I then asked what he had done to overcome the price objection BEFORE it came up. He had no answer. Nothing. Nada. Zip. This was actually good news – at least we had pinpointed the weakness in the proverbial sales chain and could fix it. The analogy I gave him was this…

? ???Let’s suppose you were attempting to climb Mount Everest. You think you prepared, but halfway up the mountain you realize you’re not properly dressed for the cold and have to abandon the mission and head back down. The next week you get ready to climb, and again, halfway up you have to retreat because you are STILL not properly dressed and the cold stops you. You KNOW it's cold, but you just thought this time it would be different. The following week you try again, and AGAIN you have to retreat because you’re not adequately dressed for the cold. My question to you is this: how many times are you going to repeat this same mistake before you do something about it and change your approach BEFORE heading up the mountain? The light bulb went on.

?????Selling is nowhere as difficult as climbing Mount Everest (unless you’re really, REALLY awful I suppose). BUT it is similar in that reaching the summit (or goal) will require you to be prepared and to overcome various obstacles and challenges that can deter you, slow you down or stop you altogether. If you’re smart, you’ll learn from every failed attempt and BETTER PREPARE so you don’t make the same mistake twice. And if you were really smart, you’d hire an experienced guide to plan and climb with you – not just scribble down a few good ideas gleaned from the brochure in the coffee shop at the bottom of the mountain. You become a SERIOUS STUDENT.

Yet hardly any MSPs I talk to do this. They KNOW "the price is too high" is going to be an objection they'll encounter, but never do anything to prepare the prospect in advance of the sales meeting to position themselves as the more professional, reliable, trusted and QUALITY option. People only buy on price when they have no other intelligent, legitimate reason to pay more. Period.

????Back to my client struggling with price resistance. I suggested a few things: First, create a report or article titled “7 Ways 'Cheaper-Priced' IT Firms Hide The True Cost Of Their Services In Their Contracts.” Then explain in the report why folks should hire YOU instead of the "cheaper" competitors. Point out where they fail. Load the report up with testimonials from other happy clients. Get this report to them in ADVANCE of the first meeting and make sure you encourage them to read it. Second, when setting the appointment, you might ask, “Who have you been outsourcing your support to up until now?” If they name a competitor, or if they had someone in-house who left or is unable to handle the workload by themselves, you know they are at least used to spending money on IT support. If they say it’s been their brother-in-law who they pay in beer money, you probably should float a general price on the phone before you meet in person to make sure they don’t have total sticker shock when you quote them. To be CLEAR, we’re not selling yet, but qualifying.

You have to qualify carefully or you'll kill a good opportunity by getting into the weeds too soon before you can build need, establish yourself as an authority and explain the value. Example: “Based on what you told me, our clients who are similar in size and with a similar number of employees are spending between $X and $Y per month for us to be their outsourced IT department. Is that within your expectations?”

I wouldn’t use this on EVERY prospect, but if you get the sense they don’t have experience in paying for professional IT support, you might consider it before wasting time and money attempting to sell to a unqualified prospect. Let's say they give the okay on that and we move on to the Discovery Meeting.

In the Discovery Meeting, after establishing yourself as a trusted authority and asking great diagnostic questions and getting a true sense you can help them, you bring up price FIRST. You can say, “I don’t know exactly what your investment will be until I conduct a more complete assessment of your network, but based on what you’ve told me so far, I’d estimate you’re looking at between $X and $Y. Is that in line with what you were expecting or completely out of the question?”

? Of course, these are just a few of the things I know to do during and after the sales meeting to make price a non-issue; that’s not the point. The point IS to PREPARE in advance to SELL.

Back to my opening, the MOST dangerous competitor to your MSP is very likely the person you brush your teeth with in the morning. No, not your spouse, dummy. YOU. If you INSIST on "winging it" in your sales presentations and haven't thought through the architecture of your sales process, haven't developed scripts and answers to FAQs, haven't engineered a process for overcoming KNOWN objections and fail to have an effective process for closing, you are leaving a LOT of money on the table and crushing your ability to grow profitably. Your fellow MSP competitors thank you.

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