Let’s face it: creating and running a “job shop” sort of business was less complicated. You really only needed to do three things well — sell enough jobs, process the jobs efficiently and accurately, and get paid for doing them. That meant a simple structure was enough. You needed someone paying attention to sales, someone paying attention to operations and someone paying attention to accounting. If the accounting side could also manage the HR piece, you could call that “Admin” and be good to go. Then everything changed.
Chasing down enough jobs got much harder. The jobs themselves got more complex and more demanding. And if getting paid wasn’t already difficult, getting paid enough suddenly became much more challenging. A business model that was robust enough to work for decades suddenly started to sputter and stall. Bummer.
Unfortunately, becoming an MSP isn’t as simple as bolting new services onto the existing job shop business model. An effective MSP doesn’t create value in the same way. The largest value that an MSP can create lies in finding and solving customer problems. Or, put another way, it lies in identifying and filling customer needs and opportunities. That means helping the customer determine what they should do rather than merely executing what they have already decided to do. In that, the recommendations you make may have much more value to the customer than the actual work you do. And for many who have run successful job shops for decades, that’s a hard thing to accept.
Successful MSP’s (in all their various forms) have one thing in common: exceptionally strong and deep customer relationships. They have learned that the customer relationship is everything. And most of them have learned that they need fewer and larger customers than they did before. That’s another disconnect with the job shop model. In a job shop of any kind, having more customers makes you less dependent on any single customer. Most of us can recall being counseled by accountants, other advisers and associations not to let any one customer become too large or too important. Case examples of companies that suffered because they became too dependent on too few customers became the stuff of legend.
What was true for a job shop is not true for an MSP. And that’s because the depth of the customer relationship is now vital where it rarely was before. And that changes everything.
When the depth and strength of customer relationships becomes more vital to your business than anything else, you have to get very good at creating and keeping them. And that means working in three areas that didn’t get much attention until now.
Building a Brand
No, I’m not talking about advertising and sales promotion. The key here is seeing the connection between the purpose of your business (who it is intended to serve and how) and the commitment you’re making to those who become your customers. Think of it this way: if your business is intended to create a certain kind of value for a certain kind of organization, that’s your purpose. Your commitment to create that value for those organizations that become your customers is a promise. That’s why the most powerful way to capture a business strategy is to express it as a brand promise: “If you become our customer, this is what we’re committing ourselves to do for your benefit.”
Every business has a brand because a brand lives in the minds of your customers. It’s not your logo or slogan. It’s not your website or the color scheme on your trucks. Rather, it is the perception of your business that’s been created and sculpted by each contact a customer has with your business. When left to chance — to the vagaries of unguided and unplanned customer interactions — the resulting brand is rarely very strong or strongly positive. But it is always still there.
A brand must be built on purpose — on your purpose. Social media has been touted as making traditional marketing obsolete, and that’s bunk. The claim that social media enables an “ongoing conversation” with your customers is true, but someone needs to start the conversation. In nearly all cases, that responsibility still falls to you. And that brings us back to the vital need to build a brand on purpose by making and keeping commitments to your customers.
A strong statement of brand promise is a powerful tool to clarify the focus of your employees as well as to engage the minds and hearts of your customers and potential customers. It’s also the foundation on which strong marketing and selling can stand. Recognizing the need to build a brand intentionally and well doesn’t mean you’re grandiose and trying to mimic Procter and Gamble. It does mean you recognize that deep and strong customer relationships are now essential, and your brand as it lives in their minds is where those begin.
Going to Market
A fairly low-powered sales force can represent a job shop reasonably well and easily. But building deep and strong customer relationships — where those customers are looking for analysis and recommendations — is much more demanding. And it has little to do with the technical expertise of the salespeople in the DMM, fulfillment or distribution.
You yourself value someone who can deliver a business outcome that you need much more highly than you do someone who can merely offer you a lightly-customized “solution.” That’s because what you need is the real, tangible, and measurable business result. The elegantly integrated and packaged “solution” may be intriguing, but it isn’t likely to capture and hold your attention as well as a proposal that guarantees a business result for you. The best and most successful MSP’s are focused tightly on the business results created for their customers. And a focus on business results make the role of the salesperson much more demanding as I described in an earlier column. But that focus also means that how you go to market needs to change too.
Large businesses have often suffered from rivalry between those in marketing and those in sales. Small businesses dodged that conflict simply by having no one doing the work of marketing while they relied exclusively on their salespeople to bring them new customers and to keep their existing ones. If the work of marketing is communicating your brand promise and engaging potential customers, that’s also the work of selling. Why should the two be in conflict? Successful MSP’s resolve that potential conflict differently — by integrating marketing and selling into a single, seamless process. For that, I like the term Business Development.
Business development is much more balanced than either traditional marketing or selling alone. It balances the short term and long term because it is responsible both for short-term sales revenue and long-term value creation. It is responsible for creating demand now and for strengthening the brand over time. It is responsible for targeting individual customers now, and for developing markets over the longer term.
Business development requires different sorts of people than we typically see in job shop sales roles. In essence, it requires people who can see your business and your customer’s organizations from multiple vantage points and then integrate those into a real understanding that reconciles the apparent contradictions. And that’s why driving business development often becomes the primary task of the business owner or ranking executive. She or he may be the only person on board now with the necessary knowledge and skills. Regardless, the business development process — the process of making deep and strong customer relationships — is now the engine driving the business.
Creating an Experience
Perhaps I should be describing customer relationships differently. Rather than describing them simply as deep and strong, perhaps I should also describe them as lasting. Certainly deep and strong infers that they are long-lasting as well. But that doesn’t happen by accident.
Since your brand lives in the minds of your customers, and since it is shaped by every interaction they have with your business, shaping their experiences is the fulfillment of your brand promise. It needs to happen intentionally. And that’s the third area that’s gotten little attention from job shops until now.
Three-quarters of your customer interactions are predictable and highly-repetitive. Certain parts of delivering value to your customers apply across all of your customers. In a job shop, where the focus is on “doing the job”, the customer takes a back seat to the work of processing the customer’s job. For an MSP, where delivering business results trumps any intermediate process, that cannot stand. The experience that the customer receives directly shapes his or her perception of the value you’re creating and what you’re worth paying for the results delivered. And that’s huge. Therefore, designing the experience your customer is going to receive at each point now warrants attention and effort.
A customer experience can be mapped. And it can be described from the customer’s viewpoint (the only one that counts.) That means describing it as the customer is experiencing it rather than describing what you’re doing for the customer at that point in time. And once that map is created, each of those points where your business touches a customer can be planned and developed so that the experience they have is consistent and consistently positive.
We’re through the looking glass. No longer is a focus on selling, processing and getting paid sufficient. Even small business owners need to manage brand-building, business development and the delivery of a strong customer experience. And there’s no MSP that’s maximizing its opportunities without those three elements.
by Wayne M. Peterson, Principal
The Black Canyon Consulting Group Inc.
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