MSP Business Expert: Bundle Services, Visit Customers, Sell Cloud Faster

Erick Simpson, who knows the ins-and-out of making a cloud services practice thrive, told NexGen Cloud attendees they should identify customers with strategic technology goals, give them options, and maintain in-person relationships with business leaders


The IT market is moving fast to a cloud-first model, and the channel needs to be ready to scale cloud services practices by putting to work proven, if not always obvious, sales strategies, Erick Simpson, an MSP business expert, told solution providers Wednesday at the NexGen Cloud conference in Anaheim, Calif.

"I predict that Microsoft is going to begin accelerating our move to the cloud by creating more and more of their products into apps that can be used on multiple devices," Simpson said. "If that's true, we need to be skating where the puck is going to be."

What Simpson hopes those attending his session do soon after NexGen is create a 2020 strategy—one that starts with the low-hanging fruit in cloud adoption, Simpson said.

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Those strategies should focus on security, he said, as everyone realizes the solutions delivered five years ago are not suitable for today's threats. Any cloud portfolio must consider the current "attack footprint."

Cyber criminals might not want your data, but they do want your Bitcoin, Simpson said. "They're going to ransom you with whatever approach they can."

As far as a sales strategy, Simpson said, it's first important to recognize there are three ways cloud services providers generate revenue.

You can resell a vendor's product or service. That's an easy way to get involved, and requires customization and sales skills, but will yield the lowest margins.

Another option is to host cloud services. That next level of maturity and technical expertise, with a strong commitment to vendors and data center know-how, offers more revenue and profit.

Finally, those with the greatest expertise and looking for the highest potential margins, can build their own cloud infrastructure.

Partners should remember that the business model that offers the highest level of consulting maturity will be the most profitable, he said.

"The closest your business model is to that consultative, trusted advisor, the higher your profit margins can become, because you're selling at a higher retail price, and you're delivering more value to your clients," Simpson said.

Those cloud services providers should also look to diversity of solution packages and bundling. Research has shown that a single proposal offering a binary choice is more likely to be rejected.

Offering several bundled packages is an important tool in an effective sales strategy, Simpson said, and is something he discovered in his own practices.

"The buyer's psychology changes suddenly and dramatically." The channel should "figure out complementary services and solutions that you can add to your bundles," he said.

Studies have shown that when presented with three options, buyers are more likely to make a purchase—most often the mid-level or highest option.

And as part of their sales strategy, business and sales leaders should regularly visit their clients to keep an open channel of communication, especially in the aftermath of a deal closing.

"Make sure new clients understand we're going to have regular recurring meetings, develop a consistent agenda," he said.

In those powwows, they should always try to talk about the client's budget so as to nurture a strategic mindset for technology goals.

"Think about ways to help your client come up with that budgeting strategy," Simpson said. "You're helping them become more strategic now."

Sheri Coleman, CEO of Aveir Technology, a Reno, NV-based consultancy, has heard Simpson speak at previous events, and finds his most interesting point the benefits of offering a choice of solution bundles.

In her practice, Coleman has found that scheduling regular meetings with customers is a great way to stay engaged and maintain their path on a strategic technology roadmap. She's currently preparing such year-end meetings now, which will provide chances to, among other things, make sure Windows 7 has been phased out everywhere.

IT providers can get lazy, Coleman said, which is why it's important to be reminded regularly of Simpson's advice of always nurturing the relationship, which enables partners to "sell more stuff."

"Run a company," Coleman said. "Not technology."