Helping MSPs be more profitable - Microsoft Reactor

July 27, 2022 • 14 min read

Recently Andrew Browne, Head of Partnerships at BeeCastle presented at Microsoft Reactor in Sydney in conjunction with Pax-8 and Connectwise. The topic of his presentation was on Helping MSPs be more profitable through data-lead account management.

Below is a video of the presentation.

Transcript:

Well, I’m for those who haven’t met me yet. I’m Andrew Andrew, head of general partnerships here at BeeCastle. First of all, thanks for taking the time to come and meet today. And check out what’s new in market, what’s happening in the MSP channel. What we’re going to talk about today is how do we help MSPs be more profitable through an effective account management strategy led by data. So we’ll go through that today. If you have any questions, we got some time at the end, as well. Also, thanks to PAX8 and ConnectWise. And of course, Microsoft, this court and for hosting us here today as well. Appreciate it, guys. So recently, I attended a presentation. And it was on mergers and acquisitions in MSP channel. And there was one slide that really stood out to me, which was five things a private equity values when looking to acquire an MSP.

They say that for your overall revenue, 60% of it should come from your recurring services, you should have 50% gross margin or better 15 to 20% EBITA consistent for three years, a high split between your services and your hard work, and an 85% customer retention rate. Now, this really excited me because BeeCastle strives to achieve all of these key points, and it really resonated.

So what is BeeCastle? At our core, we’re a data analytics product. And what we want to do is help MSPs be more profitable through effective account management. And there’s three main ways that we do that, we can improve your profitability. And we do that by you know, saving you time making you more effective with what you do. So that’s through identifying those non profitable accounts, retaining those high value accounts, automatically tiering your customers, getting you organized with your data, tracking engagements and keeping on top of your team, and then saving you time with building out these reports automatically for you, and keeping them real time. We also help to increase your revenue. So when we think about increasing revenue, we’re talking about with your existing customers, how do we get them to spend more money with you? So we do things like product penetration reports to understand with a different solution, just selling? How much of them in your customers right now? Where can we upsell and cross sell with our existing customers? And how can we build really focused campaigns on particular areas that we can focus on for the next quarter or so? And then lastly, acquiring new customers. So for those prospects that you are engaging with, really about how do we be accountable for that? You know, there’s so many times where you are engaged with new prospects, especially as things ramped up. But from that first meeting, have you had a follow up meeting? Is there one booked in? Are you staying on top of the team? Are you actually really engaging with them?

So a little bit about how we work. Well, we integrate with ConnectWise, and we integrate with Microsoft 365. So we have out of the box analytics, that give you all the dashboards and insights from these two sources of truth. So with ConnectWise, we’re pulling out things like your revenue, your invoices, your products, your agreements, and customers and contacts. And with Microsoft 365, we’re looking at things like emails, your meetings and your phone calls automatically. The reason why we integrate with ConnectWise is you keep it as a source of truth. So there’s no manually keeping two systems up to date and having to manage data and the two different systems, keep it within ConnectWise keep the workflow the same. With Microsoft as well. No more manual logging of activities. There’s no need to hassle the reps five minutes before the meeting to make sure they’re up to date. You get a clear transparent view as to where they’re at and who they’re talking to him through that we create dashboards like product penetration reports, or revenue breakdown, deep customer analysis on who’s growing and why, as well as in depth whitespace reports and many more.

But delivering effective growth is challenging. You know, getting visibility into where reps are spending their time is a struggle, you know, keeping them up to date with what they’re doing and who they’re speaking to is often the mystery sales strategies with founder also based off of their intuition. You know, where should we be focusing our efforts this quarter is often a bit of a guess. And it’s not led by data. Identifying churn is also quite difficult. You might look at the overall revenue growth. But how has that been offset by churn and by customers who are decreasing their spend as well. And if you do get organized, you do get the data and you’re building them in Excel. It often goes stale quite quickly, you might waste a couple of hours to build them and then it’s not relevant the next week. And then finally, probably the most important strategy is off When built without accountability, so you might have a really good strategy or a really good plan in place. But if you don’t take the time to sit down and actually review and change the behavior, once you do that, it’s effectively useless. Fortunately, because we can help with that, we can help you be more profitable, increase your revenue and find new opportunities. So, focus on recurring revenue by improving your product penetration, really doing the upsell and cross sell with your customers if they have backup, or if they don’t have backup, but they have 365, maybe that’s a good fit. And you should be focused on that. Improve your margins by selling profitable products to your key accounts, you know, look for those big wins and focus your time and effort with those ones. accurately measure your growth rates. So understand with your growth, where is it coming from, from which accounts and why. And then identify those at risk accounts to, you know, who are accounts that haven’t been spoken to in a while, that may be slipping in engagement and likely to churn to looking at your product growth opportunities, where you could say, I’ll use backup again, you have 20 backup customers of your 100 They’re at that don’t have it, you know, is this a good potential growth opportunity for us to focus on in the next quarter. And then finally, you know, having a data driven approach to account management. So understanding where is my team spending the time and should it be with different accounts or focus on a different area, rather than being bogged down with maybe squeaky wheel customers, which we like to call them. Also, on the flip side, if you’ve recently acquired an MSP or you’re looking to acquire an MSP, you can use the data to be proactive when engaging those new accounts. So likely, those newly acquired customers are on an old service plan or an old agreement. And they often get left for years and years because no one does anything about them and talks to the other customers. So you can use the data to be a bit more strategic about doing that. And also, being engaged with those new accounts is critical too. You know, you want to make sure that you have a relationship with these new accounts, and then I’m going to leave for the owner starts his new MSP. But making sure your team is accurate, engaging with those accounts is crucial. And then you can easily build an engagement strategy around that. So if you’ve got 100 customers that you’ve just bought, assign them to your account managers within the team, and then given them tasks to make sure they meet and get to know them. We’ve worked with a number of MSPs around the world.

We’ve been working with Turrito in South Africa for a year or two now. And she recently sent us this quote, which I thought I’d just share, she said that BeeCastle was saved her years of development and cost and trying to build out some of these reports. And that the features that we’re building, which I’ll share with you, are relevant. So everything that we build is out of the box, it’s for MSPs. And it’s to help with better account management. I thought I’d just give you a bit of a flavor or an experience as to what the platform actually looks like. Keep in mind, there’s no setup required or anything for this, it’s all out of the box live ready to go. This is one of our whitespace reports. So up the top is the solutions that you sell out of your system, you got your customers on the left, as well as the revenue for each of those individual products or solutions that you’re selling. And you can see the little white spaces in between all the different accounts will also automatically tier customers for an MSP, too. So breaking your customers into platinum, gold, silver and bronze based on their agreement revenue with you. And you can use this to be a bit more strategic about, you know, who to speak to, and how often. So for platinum accounts, you might want to meet with them monthly, for example, gold accounts, you might want to meet with them quarterly, and silver and bronze, you know, we want to make sure we’re not spending too much time with them because they’re not impacting your bottom line as much. You can also start to look at the concentration with accounts, you know, do you have one or two large whale customers that are making up the majority of your revenue? Is there a business decision to be made around that it’s quite good to get a visual understanding of where things are up. We also have the revenue breakdown. But rather than looking at overall revenue, we start to look at the different drivers. So how much of your revenue was from brand new accounts that have signed on for the very first time, which is the dark green? How much was from your existing customers that have just spent more with you, you know, whether it’s adding more services or buying a new solution, which is the light green, and then the red is customers who have decreased their spend as well. So identifying that churn and the customers that are tapering off the expenses. As you can imagine, you can deep dive into all of these different and fails to understand who and why and what product in different timeframes with different types of customers things like that. We also have a prospecting tool. So identifying the customers who don’t have a particular solution. If you’ve identified that backup is something you really want to focus on right now, you can say, give me a list of all the customers who don’t have backup. But if you wanted to be a little bit smarter about it, you could say, give me a list of all the customers who don’t have backup. But they have 365, because it’s a natural cross sell or upsell. So we instantly give you that list. In this case, there are 93 prospects that fit that criteria, you can then select the ones that you think are probably a good fit, click on Create opportunities, or exploit and push it into ConnectWise as opportunities and assign it to your team to go after they’ve been really targeted in your approach and doing so. And then we finally, we also have our customer engagement side, which is quite popular. So what we’re looking at here is for our Platinum accounts, which ones have had a meeting, which ones have had an email and which ones have had no interaction at all. So because we’re looking at Microsoft 365, we can automatically see emails, meetings and phone calls with clients. So for a sales manager, this is really critical, because they can say start of week, hey, these six companies are really important. And they’ve had no engagement in the past 90 days. You know, let’s make sure we engaged with them this week. A little example of how the different drivers within BeeCastle can help the business. If you wanted to sell something like Cloud App Security, you know, we charge 500 bucks a month for it, we’ll sell it to people who have M 365 Business Premium, you can use that prospecting tool to find the prospects that are a good fit for that. In this case, we found 15, push it into the system and then stop being accountable for that. So who’s actually emailed them who’s had a meeting with them, or they’ve been followed up, or they’ve been engaged with, and then review this success. So in this case, we created 15, we close three of them, but that was still 1500 bucks a month for us of new revenue. In terms of reducing customer churn, our system proactively prompts you for people that you should be engaged with. So in this case, a decision maker at a company has had no call or meeting and over six months. So maybe someone should reach out to them in particular, as well as we identify companies that have had no interaction at all, from anyone in the team. So you can use that as kind of a leading indicator to get in there and make sure the account is safe. And then finally, chasing those new opportunities. So having a list of customers that you met for the very first time, when did you meet them? Have you had any meeting since and are there any booked in, you know, I was seeing a flow of that pipeline go through as well. As you can imagine, a big hassle isn’t for everyone in the team. It’s mainly for your executives to be strategic about looking at the revenue and where you want to take the business. And what areas to focus on is for the sales managers to better manage the team as well. So make sure they’re spending time in the right places, as well as looking at products and where the biggest growth opportunity is. And then obviously for your BDMs and account manager as well to understand who to speak to and what to speak to them about. Point being, it’s not for your service delivery team or your tech team. You wouldn’t want them on this platform because you’d be 100% engaged with everyone doing tickets. So just a little sneak peek as to what is on our roadmap. So first of all, we are working on profitability per client. So understanding how much is this customer generating for us? And how much are we charging? I guess? So are we spending too much time on tickets and hours on this account that it’s actually costing us more than we’re making from them, as well as your product margin as well. So what’s the differences there? And can we make up that gap? Also, we’re adding a little bit more intelligence into our prospecting tool, and actually prompting you with solutions we think would be a good fit for your customers and adding a little bit of machine learning on top of it as well. And then finally, we’re working with a couple of vendors at the moment on doing really targeted joint MDF campaigns. So if we use the backup example, if you’ve sold 20 backup solutions to 100 of your customers, we can generate that list of 80 and then help you work with the vendor to be really targeted in the approach and MDF campaign rather than doing like a shotgun marketing approach. In terms of our pricing structure, we do have our free version. The free version really just shows the the opportunity within your customers, shows you your product growth opportunity, as well as your revenue and how that’s broken down. If you want to do something about it, and you want to start making some money and operationalize that data, that’s when you can upgrade. And our packages are based on the number of users that you want on board. Now, most MSPs don’t have more than 10 users. So we do up to 10 for our largest package. If you are keen to get started, it’s quite simple. You just go to be castle.com Create an account, integrate your ConnectWise API takes 48 hours to sync and then you get your insights straight away out of the box ready to go. Nice and quick one for you. If you guys have any questions, let me know now’s a good time to ask.

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