Rampant Referrals Part 9 – Communication Sabotage (Subsection D)

Rampant Referrals

As a quick recap from last time, we looked at the ‘why’ of the question-qualifiers Why, What, Who, How and When and Where :

  • Neglecting to Ask for Referrals due to lack of a process
  • Ignoring Non-verbal Customer Feedback
  • Not Requesting Feedback Or Handling Bad Feedback Poorly
  • Little or Inconsistent Communications
  • Lack of Differentiation
  • Lack of Engagement Strategies
  • Failure to Acknowledge or Reward Referrals
  • Miscommunication During Onboarding
  • Poor Communication of Changes in Services, Procedures or Policies

In this section, we’ll be covering referral sabotage around the ‘what’, i.e. what it is that you actually offer. I’m sure you’ll agree that it’s pretty frustrating when you hear that a client has bought a product or a service from a competitor but when you ask them about it they say “Oh, I didn’t know you sold that!”

Now this is the heart of the matter, I don’t care how good a company you run, there is always, always, always daylight coming in from the gaps between what you could and should sell to your clients and what you actually do sell to them.

So let’s start with the very basics and work outwards. In terms of your existing clients, they should all be aware of all the products and services that they are currently buying from you. If they don’t then I’d suggest that’s certainly a lack of communication right there which needs to be addressed before anything else.

So, at the very least, I’m assuming that you have regular account calls or meetings with them to ascertain the requirements and wellbeing of their IT estate and here is where they’ll be made aware of what they currently buy from you. This is also where you can – and should – make them aware of other eventualities where they might require other products and services from you.

This is achieved easily enough when you have a matrix of all the products and services that you could supply and then you tick off all the products and services that they actually receive and so you can identify where there are gaps, and so you make them aware of those missing pieces of the jigsaw.

Now obviously, they may not necessarily need what’s in those particular gaps and so it wouldn’t always be appropriate to try and sell those things. For example, a client might be using PCs and servers running Windows software so there would be little point trying to sell them Apple or Linux based antivirus solutions for those machines. There’s no point in trying to sell ink for an Epsom printer when they’ve got a perfectly good Dell printer.

All this is obvious. But that’s not to say that they shouldn’t be aware that you offer other products and services too because who knows who else they’ll be talking to at some other time? My suggestion would be that you simply stick to the plan and discuss their own requirements and map out what their estate could and should have. But when you’ve finished that, there’s nothing stopping you including some collateral which shows the other products and services that you sell. At the very least, you can include a sentence which outlines that you can provide a comprehensive range of other products and services in case they happen to know anyone that might need it – and perhaps include a few examples.

To be clear and reiterate the point, I’m not suggesting that you spend any time discussing or promoting Apple products to someone that’s perfectly happy and catered for by using Windows products because it probably wouldn’t be appropriate and might well alienate them. All I’m suggesting is that you ensure your clients are aware that you can offer the alternatives in case they know anyone else that might be using Apple products and who might want some help or advice.

It’s a fine line and obviously requires some common sense.

Let’s undertake, a little revision for a moment, in terms of maximising sales and revenue for your MSP business.

Put simply, your revenue is the product of your VALUE multiplied by your VOLUME i.e. £ = Val x Vol Another way of saying this is that your total revenue in any period is equal to the average transactional value of a sale, multiplied by the volume of sales in that period.

So, if you want to increase your revenue then you can either increase value or volume … or both. Let’s for a moment imagine you’re a grocery-shop owner rather than an MSP. So, the revenue you get per period, i.e. each day, week, month, quarter, year is the average basket value multiplied by the volume of baskets sold in that period.

You can increase the average basket value in three ways, you can :

1 – Increase the prices of the contents within the basket. This is quick and adds profit straight to your bottom line, assuming there’s no corresponding reduction in volume. Price elasticity is a conversation for another day but this certainly encourages conversations to be had around offering premium-priced products and tiered pricing so that clients can get the opportunity to select the more expensive versions of what they already buy.

In the grocer’s case, a shopkeeper could promote premium products such as premium chocolate or premium washing powder or whatever. You might promote high-end IT solutions. To be clear, even if the clients don’t buy it, the very act of having contrast in the pricing can help. For example, a florist could offer a great big magnum bunch of the most expensive orchids for the most important of occasions and it might cost an eye-watering £500. Perhaps people hardly ever buy it but it certainly makes a bunch of flowers priced at £50 look much more reasonable, simply due to the power of contrast.  Without the contracts, £50 might well look expensive. So the takeaway here … how can you translate that into an offering for IT products and services – what very high-end things can you at least mention which provide you with price-contrast, which you can use to help increase your average order value?

So, that’s pricing, in a very, very small nutshell.

2 – Size-of-basket-items. If someone was going to perhaps buy 500 grammes of a product like maybe soap or sugar or coffee or whatever, then maybe they could be persuaded to buy it in larger sizes. McDonalds are great at this of course, when you ask for a drink like a Coa-Cola, they’ll promptly ask if you want it as regular or large.

To my mind at least, things that are very scalable include products such as speed or bandwidth or memory. Just look at how some broadband providers upsell their packages. There will be strategies you can use to increase the size of the average transactions accordingly and this is basically up-selling. i.e. selling more of the same products and services that people already buy so that the average order value is higher.

One great example from consumer goods that I can think of is shampoo. it’s brilliant – if you read te package, they tell you to wash your hair with it and then rinse it. And then repeat – genius – they’ve just doubled your consumption of their product!

How can you do this as an MSP owner … time to get creative!

So, that’s upselling. Now, cross-selling covers promoting and selling different products and services that the client may not already be using from you. To be clear, those products and services could be yours or even other people’s. Amazon are very good here. Every time you buy a product, they offer a slew of other products and they suggest that those are things that other people bought, which also provides social proof as a form of persuasion too. So – buy a pair of shoes and you might also want to buy boot-polish or shoe-laces. Buy a burger and you might also want fries or a nuggets as a side-order. That’s cross-selling your own products and services, you get the idea.

In terms of promoting other people’s products, this again needs to be a little delicate so as not to annoy people because theoretically you could offer to sell everything under the sun. However, keeping things simple, examples from other industries abound from promoting breakdown cover for people selling cars to promoting hair-products if you’re a hair-dresser. And shortly, this will bring us neatly back full circle-to the realm of B2B referrals. An MSP might very easily cross-promote cyber-insurance for example because it’s a logical and relevant potential add-on.

Just finishing off with the basic framework around Value x Volume, the last part of the equation is frequency. If you can get the average order value up per basket in terms of price and size, then getting the shopper to come back more frequently is another lever to pull. You’ll see this employed in various industries from getting haircuts more frequently to getting your car serviced more often. Increasing consumption in this way is precisely why the fashion industry makes us think perfectly good clothes are unfashionable and it explains forced obsolescence in various products – especially in the tech industry. It’s great for profits but can cause havoc for the for the environment … probably best I don’t get on my soapbox about that.

The best things smart MSPs decided to do in terms of increasing frequency was to switch from a breakfix model to that of monthly recurring revenue. However, are there still areas within your business where you can increase frequency of purchases? Have a look and again – be a bit creative.

Next time, we’ll look at a communications overview for each of your stakeholders so that you maximise your value and volume both internally for your products and services and also externally for those in your value chain and get this back on track to dealing with referrals.


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Mike Knight