13 Feb How One MSP Strives to Differentiate His Business: A Partner Interview with Eric Rieger
Editor’s Note: Eric Rieger, President of WEBIT Services – a self-proclaimed non-traditional MSP, shares how he achieves his goal of differentiating his business from that of other managed service providers by standing out from the pack and establishing his “why.” Rieger also opens up about his open-book management style and how he is trying to mold his employees into highly engaged business leaders.
Ted Hulsy: Eric, thanks for taking the time to chat with me today.
Eric Rieger: Thanks for having me Ted.
Ted Hulsy: One of things I like to start out my interviews with is, tell us about WEBIT. When were you guys founded? How big are you? What do you guys focus on? That sort of thing.
Eric Rieger: Sure. No problem. Well, we started the company in June 1996, so we just celebrated our twentieth birthday. Next year, we’ll be able to legally have a drink. We are fast approaching twelve employees now. I kind of like to call us a non-traditional, managed service provider, but we’re trying to figure out ways to separate ourselves from the herd. We’re big proponents of TruMethods. I’ve been working with Gary Pica as a coach since 2009. We have network administration, virtual chief information officer services, and we’ve recently added in-house development capabilities. I firmly believe that security and the ability to customize applications for our clients is going to be a key to our long-term success. We focus on companies that are between 20 and 500 employees and have a focus in healthcare, manufacturing, construction engineering, and non-profits. Those are our primary verticals that we serve.
Ted Hulsy: Wow. That’s great. It sounds like you’ve done a lot of very intentional thinking about where you want to focus, and where you want to differentiate. Let’s kind of take a step back. I love the idea of being a non-traditional MSP to say, “Hey, we’re going to be different.” When you look at the market today, where do you think things are commoditized? Where do you think most MSPs are struggling in terms of lack of differentiating? Where is everybody looking the same?
Eric Rieger: Yeah, that’s a great question. You know, being a part of a few different peer groups, you get to see what’s going on around the country and even North America in general, myself personally. There’s a lot of groups out there that are great coaching and mentoring programs, but really what it all boils down to is you have to learn how to take the message and then apply it to your personal situation. One of the books that I’ve read in the last couple of years that I was turned on by one of my coaches was Simon Sinek’s Start with Why. I’ve really done a lot of soul searching about why we exist and what our brand promises for our clients, and we came up with…we want to have people who share our belief. We start out by saying, “We believe all technology should be secure, reliable, and efficient.” What does that mean? Everybody here is centered around that purpose, and what I see in the marketplace right now where people are getting trapped in price wars and commoditization, is they are all sounding the same. I think a lot of MSPs don’t have their ‘why’. A lot of us start out as technicians and for me personally having a lot of different coaches and mentors along the way, has helped me grow as a leader and as somebody who is a visionary. I use that term kind of loosely, but really driving the direction of our organization. I think that’s missing in a lot of especially the smaller MSPs, is they are still struggling with that transition from technician to business leader, business owner, even the conversations they have and the types of clients they are pursuing, so there’s a lot of different variables that come into play that are driving that commoditization. They aren’t able to differentiate themselves.
Ted Hulsy: One of the investments it sounds like you are making is actual in house software development. How does that capability help you make the IT experience for your clients more secure, reliable, and efficient?
Eric Rieger: Yeah, that’s a great question. My background before I started WEBIT, I actually was in software development. I worked for a local software company here in healthcare. I’ve got some…I wouldn’t call myself an expert coder by any stretch, but I understand the moving parts, and when we were starting to have conversations with some larger opportunities, you know the 100+ space, what we’re finding is that, you know especially, you take manufacturing for example, off the shelf ERP systems. Those can go hundreds of thousands of dollars of an investment. No one organization is going to be able to out of the box just use every capability in a piece of software and have it fit their organization. So, we took a step back and said, “It would really be great—we’re already managing the infrastructure for them or at least having a hand in that, and the security and everything else—wouldn’t it be great if we could take disparate systems or even off the shelf systems and customize them for the clients specific needs and really give them insights into their business, whether it be through business intelligence, dashboards, even just spotting inefficiencies in the organization. That would kind of help us separate ourselves and really add some value to a traditional managed service play.”
Ted Hulsy: And then how, so it sounds like a lot of the custom development is around driving integrations between different software packages and applications and infrastructure. How do you monetize it? Is it special projects that live on top of kind of a managed services relationship or are you finding you’re able to actually create vertical specific products that can be add-ons? How does it manifest itself on a product or kind of service delivery basis.
Eric Rieger: Yeah, we’re still a little bit in our infancy with this, but right now, it’s kind of an ad hoc project basis, so what happens in our world is, as we’re performing our services for our clients, we’re getting them to have a much less noisy environment. We’re getting the efficiencies from the infrastructures and the technology that exists today. We’re spotting these opportunities and then we are proposing it as a project. We try to flat fee it as much as we can. There’s always scope creep around development, but we’re putting it in, in kind of a nice little box, and we’re wrapping it up saying that because you already have a handle on how your business runs through our strategic planning, and we have your network all mapped out, we’re able to do a development project a lot more efficiently than somebody that’s a third party coming in off the street having to learn your business, having to learn the challenges, how your software operates. It becomes a much more expensive proposition that way. It’s kind of still a bit of a work in progress, but what I see for the future is that out of this, we will gain some knowledge that they’ll be some similarities across the board in certain verticals, which might lead us to even come up with an application or two that we can put to market and then eventually support. It might even spin off its own segment from our company into another company.
Ted Hulsy: It’s a very common scenario with a lot of MSPs, where you get a lot of depth in a category or a vertical, and you say, “Holy cow, we really got the tiger by the tale with how to solve this problem,” and it almost can spawn sometimes a new company sometimes. I guess for now, I really like the idea though that if you’re doing these as add-on projects with existing clients, there’s a lot less risk in the bidding on a fixed fee project because you already understand the lay of the land better. You have less risk there.
Eric Rieger: Absolutely, and you know to your point, if you look just at the MSP channel, a lot of the companies that are providing software solutions to our channel were MSPs or still are MSPs and solve the problem that existed and either spun off a division or company that sells back to the channel. We’re just kind of taking that approach a little differently, and doing it for our clients instead of the channel, but you’re right, we’re trying to solve problems that may not necessarily be unique to one client, and then figure out how we can bring some of that to market maybe in a couple of years. Who knows, it might even spin off a division or a new company for us.
Ted Hulsy: Okay, well great. Let’s change gears a little bit. Just in preparing for today’s discussion, I noticed some of the investments you’re making in marketing. How has kind of marketing evolved at WEBIT over the years?
Eric Rieger: Yeah, it’s definitely been an evolution. Prior to, I would say probably about 2012, we existed mostly on referrals. When you’re a smaller company, you do a lot of hard work for people, hopefully you get recognized for that, and people are referring. We pretty much existed primarily on that, and any kind of website leads that we would have coming in. Today, it’s a little bit different where, through the True Methods program, we’ve got full inside sales and outside sales set up now, and we have a fully running functioning sales engine. My business development manager is out there trying got find me three to five people a week that I can meet with, and spread the gospel of WEBIT as it were. We look for really good fits. We’re not out trying to dominate the North American market. We like our positioning here in the Chicago market. It’s helped us with slow and steady growth over the last couple, three years now. As a testament to that, by April of this year, we had already beat last year’s sales. We’re having a pretty good year. It’s really, you know, the message that we have for people—we’re trying to be different. It kind of goes back to the, you know, not trying to sound like everybody else when we’re having meetings. We’re trying to listen a lot more than we talk, and really figure out if there’s a good fit for us. We’ve invested in some new tools that help combine that sales and marketing effort so that even when we’re not on the phone with people, we’re sending information out, trying to create brand awareness. It kind of ties back to the brand promise and our core values, really just making that stuff alive within the business; whereas, three to five years ago, it was a little bit more disjointed than it is today.
Ted Hulsy: And what are some of those investments to have that kind of steady cadence of marketing?
Eric Rieger: Yeah, we recently switched to using Infusionsoft for our sales and marketing engine, and it’s really opened up a lot of different avenues for us to customize internally, campaign managers, e-mail blasts. It really gives us a depth of information that we hadn’t had before, really focusing on for, again tying back to True Methods, we have a process for what we call our warm 250, and that’s really been a key driver for success for us this year. That really falls on the outside sales, which is still my department. When you have meetings with people, you know, this is a pretty big decision people are making to try and potentially change—either to an outsource provider for the first time or change providers. It’s not an easy decision, so a lot of times it’s not going to happen on the first or second meeting, but if you’re persistent and follow through, I think there’s some statistics out there that it takes an average of about eighteen touches before you can make a sale for somebody who’s qualified and wants to do business with you. That’s been a real strong focus of ours this year, to make sure that we’re having at least a quarterly if not monthly touch to people who have expressed interest in the past, but might not necessarily thought that we know we want to do business with them. It’s paying dividends for us both now, and we’re setting ourselves up for a really nice 2017 as well.
Ted Hulsy: So the concept of a warm 250, can you elaborate on that a bit?
Eric Rieger: Yeah, absolutely. So, when I’m going out on my meetings weekly, so I’ll meet with an average of about three to five businesses per week. My insides salesperson, Dan, his job is really to find those people who are a fit. When we say a fit, they are in the right vertical, they are within the right distance of our office, they are the right size organization, they have the right amount of technology, and they believe that technology is mission critical to their business. So, he’s doing a lot of that pre-qualification before I even meet with them. Then based on the process that we go through when we meet, if they are a fit, but we aren’t able to get them to make a change at this time, all of that information goes into our database, and then I set them up on a cycle to make sure that I’m having at least one warm touch via call or letter that we send them or some information and try to do it in a non-sales-y way so that we are demonstrating that even though you haven’t given us a check for anything, we’re still here to help you out. We’re a community based organization. We want to make our community strong, you know, through our knowledge share, and a percentage of those people will eventually raise their hands and say, “Some of the things you talked about, maybe a year ago, they actually came true. Maybe you guys do know what you’re talking about. Why don’t you come back in and let’s see where that leads us?” That’s been a very successful for us this year especially, and we’re using it as a foundation for going into next year as well.
Ted Hulsy: And the 250 means that you really feel like from a capability perspective, you can really affectively do that to about 250 accounts at any one moment?
Eric Rieger: Yeah, for anyone outside salesperson, when you look at just time management, if you’re going out on first appointments, and then you also have a percentage of those that convert into a second appointment, you have those. Then people who are you’re calling from your warm 250, those appointments, and then the amount of dials that you can make in a week, and going to things like networking events and meeting with other businesses that are complimentary services. It’s pretty much a full-time job. When your owner-led sales, and you’re still doing that, you still have other hats you wear, so you have to be careful to make sure you’re managing exactly the amount of work that you can to be successful and to have good results. 250 is really about the maximum for that. Once you get over that, you can either create a second bucket if you’re going to hire another outside sales resource or you can recycle those back into business development depending on the age and success rate, and have that just kind of start the process over again if it’s been awhile.
Ted Hulsy: Excellent. How have you organized the sales function? So how many folks? It sounds like you are very involved in the outside sales function, but how many additional staff members are doing sales on a full-time basis?
Eric Rieger: Well, we try to make sales kind of a companywide function. It’s part of our DNA. When we’re talking in our weekly meetings, there’s something we’ve done this year that I can talk about in a little bit called—we kind of went down a path of open book management, so we’re creating a team of business leaders, not just technicians, where when they are…even when tickets are coming in, and they are looking at them as the impact as a whole on a business, not just a ticket they have to close. We’ve got people engaged through mini games, through quarterly initiatives where we’re all actively looking at how we can expand our business and who we might be able to help in the community. With that said, there’s three people in the organization that really fall under the full-time sales bucket, which is myself handling primarily the outside sales function. I have a business development manager, who does most of the cold calling. He’s going through and mining the database, making sure everything is in a proper bucket. Then I have a CIO, who his job is to help with generating project work from existing clients based on their need and also, doing some ride alongs with me on sales calls. He will probably mature into an outside sales position in the next year or year and a half in the organization as we continue to grow.
Ted Hulsy: And who’s looking after, I mean, the existing installed base? Is there anybody who’s kind of wearing an account management type hat for that role?
Eric Rieger: Yeah, that would be both our CIO and our operations manager. They jointly take care of that to make sure the clients are being well taken care of. We have a lot of process in place. We are very metrics driven, so we’re watching to see if there’s any upticks in issues with the client. Our CIO will make a monthly satisfaction call to our clients. Then we also have quarterly strategic planning meetings and an annual budget meeting that we do. We also have a client heartbeat that goes out quarterly so that we can measure ourselves not only here in in the state, but against managed services across the country to see how we’re performing.
Ted Hulsy: Now is there somebody on staff who’s taking care of the marketing efforts?
Eric Rieger: That falls between Dan and myself. We’re kind of sharing that through our Infusionsoft platform. It’s still something that we’re maturing as well.
Ted Hulsy: Okay, and then, do you guys, I mean, in terms of…one of the key ways to kind of continuously educate a client and prospects is just a nice, steady stream of informative content. Have you explored how to do the content marketing type thing, and how are you scaling that and making that happen?
Eric Rieger: Yes, there’s a couple different things that we’re doing. We’re constantly looking for industry specific articles that may be of interest to clients and prospects alike. We believe in information sharing. We’ve got a nice social media stream going on our Facebook page for information we share from our blog and from other content that we write. I’m active on LinkedIn, I typically blog once a month there to educate people on either things we know about their industry or our industry. Then we have some drip campaigns that are informational only that are also working through Infusionsoft. So, if you get the classic, somebody doesn’t want to talk to you today, send me some information, rather than just sending them a generic e-mail, we actually can provide them with useful content in a non-sales like way to help them kind of come to that self-discovery that, “Hey, these are some people that we may want to have a listen to or engage with.”
Ted Hulsy: I find there’s a lot of cynicism around social media amongst small business owners, but also just folks in the channel.
Eric Rieger: Uh huh.
Ted Hulsy: What’s your take?
Eric Rieger: Well, I think it’s one of those things when somebody’s doing due diligence on you, the first thing they are going to do is go to your website and see if everything is lining up with what they’ve heard about you or what you’ve talked about. Then they are going to—if they are good about it—do some due diligence. If your social media page looks like a graveyard, you know, if nobody has been on there, you have no engagement, that could be telling. I don’t think anybody is going to go on a Facebook page and say, “Oh my gosh, this content is awesome. Let’s sign a contract with these guys tomorrow.” At the same time, I think if you’re demonstrating the ability to share information in a non-sales-y way, it can demonstrate additional capabilities and really reinforce the message that you’re trying got put out there that, “We put our clients first and our prospects. Even if you don’t sign us a check, we’ll share information because we want to help people become stronger in their organizations.”
Ted Hulsy: Where do you feel like most of the client space today is struggling? What’s resonating, you know, when you’re looking at content, when you’re looking at the things that are keeping business owners and decision makers in these organizations awake at night, where are the soft spots?
Eric Rieger: Well, first and foremost, security. Everybody I talk to, they are either confused about it or they are terrified about what could potentially happen. One of the things we try to evangelize when we’re having these meetings is that you shouldn’t be making decisions based on fear. It should be on education. I tell everybody I meet with that there’s nobody that’s going to sit on the other side of the table from them that’s going to guarantee them 100% security, 100% of the time. Technology just changes too rapidly, and as long as they have humans employed, people are prone to make mistakes and let something in. The only sure way you can sleep soundly at night is by having a good process and a good plan around both security and business continuity. We try to educate on the difference between business continuity and just plain old back-ups. That’s where a lot of our vendor partnerships, especially with eFolder, have been just really strong and helped us to get that message out there and really educate people on what their real risks are so they can make better decisions. As an example of that, in our twenty years, we’ve had very few true disasters where facilities have been completely destroyed. We’ve had a couple incidents, but about three weeks ago, we had some really bad storms here in the Chicago area and we had not one, but two clients have direct hits of lightning on their building. We had to go to the continuity solution and get them primed and ready in case they weren’t going to get it back up with power so they could at least continue running their businesses. That really all ties in to the security as part of the conversation because if your business is down or if your business has been breached, what is your hourly run rate? How much is that going to cost you? What is the damage to your reputation? We try to incorporate all those into conversations so people can at least educate themselves and ask the right questions of their current provider. My goal is always to leave them in better shape than I found them even if they don’t do business. Security is far and away is usually the number one concern that I hear from people.
Ted Hulsy: Tell me a little bit about what you’re doing with, I mean the user, I think the point you touched on was the brain-dead user or the everyday stupid mistake is probably a much bigger risk than a strike of lightning in most cases. What are you doing with your existing clients or when you onboard a new client, to educate frontline users about their role in secure culture?
Eric Rieger: Yeah, when we onboard, it’s typically about a ninety-day process. When we come into a new environment, that first thirty days, we’re really kind of in a transition state. They are still working with their current provider, and we’re really kind of getting a lay of the land and assessing everything before we touch anything because the last thing a business needs is to have a new IT provider come in with no knowledge of how the business functions and how people are using technology and then start making wholesale changes. Once we’re doing that observation period and documentation period, we’re asking questions of the users about trying to get a feel for what they know, what they might be afraid of or what they struggle with. Then part of our process when they get a dedicated engineer for their account, that person’s job is to make sure they are relaying the information, spotting these opportunities to educate people. There’s some documentation we pass out as part of that process. We talk about that in the sales process, that part of the weakness that businesses face is your end users. If we can help educate them by even putting a short video out—a lot of times, the guys will write specific process documents for people, or we’ll send just broadcast communications if we learn of anything, you know, a specific threat that might be out there targeting their particular industry. It’s all about communication and education. We’re just trying to identify any of those areas right off the bat, and then make sure that if something does get in, we’ve got the answer to get them back up and running quickly.
Ted Hulsy: Great. Let’s kind of just rewind to the front…you talked a little bit about some of the peer groups you’ve been involved with or some of the communities and coaches, what pieces of advice would you give to an MSP business owner who listened to today’s conversation and really liked what he was hearing on the sales and marketing front? What are some resources you would direct them to? Or coaches or communities that you would recommend for somebody to go learn more and dig deeper?
Eric Rieger: Yeah, absolutely. The community at large, there’s a lot of knowledge out there just at the MSP base. Anywhere you can meet and talk to other business owners, the knowledge share there, I found that peer interaction has been a huge benefit to the organization because anytime you’re getting a different perspective on something, it may change the way you think. It may change the way you act, and usually for the better. For myself, personally, I haven’t found any better resource than True Methods and Gary Pica’s group. I’ve met so many fantastic people through that. It’s really changed the way we’ve done business and thought about business. Through that, I’ve been introduced to our Gazelles Coach, Doug Diamond. I have a sales coach through True Methods, Jim Mullin, who has been instrumental in helping us get the discipline around our warm 250 and really drive the sales this year. Doug Diamond actually got me to read a book called The Great Game of Business by Jack Stack. He’s really the father of open book management. When I read that book—I did it in a weekend—and I came back to Doug and I said, “When can we put this in practice in the business?” He’s like, “I didn’t think you were going to take to it that well, that quickly.” I said, “Well, for me, it’s the missing piece” because what it does, is we really, this year, we’ve opened the books to the entire organization and we’ve shared all the revenue and expense figures with the exception of salary. You keep that in one line item, but we’ve taught them financial literacy and we’ve taught them how to think like owners and be responsible and read a P&L and a balance sheet. It’s really changed the conversation internally here. People are now starting to think about problems in the whole impact to a business rather than just in a technical sense. For us to grow as a business and to really provide value and avoid commoditization, when you have a team that thinks like owners and is responsible to the business at a line item level, it really changes the game. It changes the conversation. It changes the culture. None of that would have been possible without peer groups and without mentors and without coaches. If you’re even a one man shop out there, find a peer group, find a coach, and really just start focusing on the top one, two, or three things that you need to move your business forward, and don’t get caught up in a lot of the day to day noise. It’s really difficult when you’re smaller because if you have a noisy client or something like that, you really don’t want to lose revenue, but at the same time, you have to carve out time to focus on the most important things in your business; otherwise, you’re going to struggle, and you’re going to just stay put. Over the years, I’ve seen that where I’ve met some people and they always seem to have an answer for what they think is urgent, not necessarily important, and then you talk to them two, three, four years later, and they are the same size company, same revenue, and it’s kind of sad because if you apply that same energy and same effort to the things that will move your business forward—and coaching and mentoring is really what’s going to help you get that focus—it’s amazing what you can do in this industry. Technology is always going to be a need, and the opportunities are there every single day.
Ted Hulsy: Well those are some fantastic pieces of advice. That’s excellent—a great way to end for everybody who’s tuning in today. Thank you very much for that Eric. And thank you for joining us.
Eric Rieger: Thank you very much for having me. I appreciate it.