Episode 42: Short Attention Spans

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Rich explains the valuation-growing logic of leveraging overseas technical resources and the competitive dangers of not doing so. Erick then shares some concrete success tips based on his use of offshore employees years ago in his MSP days, and Rich speaks with Channel Program CEO Kevin Lancaster about strategies both vendors and MSPs can use to forge stronger, more successful relationships. And finally, one last thing: A look at the weirdest lost-and-found items (including a pet lizard and a $6 million watch) left behind in hotel rooms.

Discussed in this episode:

For MSPs, It’s Go Global or Go Home

Channel Program’s emerging integration strategy

Channel Program is giving MSPs visibility into their solution stack

NaviStack: Navigate Your Stack

Hotel Room Innsights Report: Hotels.com Pulls Back the Covers on the Surprising World of Hotels

 

Transcript:

Rich: [00:00:00] And 3, 2, 1. Blast off, ladies and gentlemen. Welcome to another episode of the MSP Chat Podcast, your weekly visit with two talking heads talking with you about the services, strategies, and success tips you need to make it big in managed services. My name is Rich Freeman. I am the chief content officer and channel analyst and channel master of the organization responsible for this show.

I am joined by your other co host, our chief strategist, Erick Simpson, as I am every week. Erick, hello to the folks from Deep In Technical. Hell .

Erick: Hello folks from Deep In Technical Hell, rich. Why are we in deep Technical Hell today?

Rich: Specifically, you wanna share? Yeah, just very briefly and then we’ll dive into the show.

It just seems like the easiest thing in the world, in the age of Zoom calls that we’re all doing all day long, whatever. We’re just essentially recording. We’re using a different platform, but it’s you go into the tool, you turn on a camera and a microphone and you go, and I won’t even belabor the point, except to say it took me, frankly, cause the problems were on my end, a ridiculous amount of time to get us to where we are right now, where everything appears to be functioning properly. So we We took a tour through technical hell. We have emerged whole and Erick, I’m excited to get

Erick: started on this week.

Yep. Rich we’ve we need to be humbled every once in a while at how mercy we are to to technology and its foibles, but we’re ready to rock. Let’s go rich.

Rich: All right. As we’re recording this I am not even 24 hours since returning home from a conference I went to this week in Orlando.

It was the annual Build It Live conference, which is held every year by IT by Design. IT by Design, a very well known in the MSP channel outsourcer. Of help desk services in particular, but a wide range of other services too it just so happens. And actually this wasn’t a coincidence, they planned it this way, but they used this conference as a venue for launching a new book by the CEO of IP by design, who was named Sunny Kaila.

And they. Everybody got a free copy of the book? Erick, here’s my free copy of the book. It’s called The Secret to Building Winning Global Teams. How to Leverage Offshore Talent to Exponentially Increase Profitability and Valuation. Available now on Amazon and wherever finer books are sold. They were talking about it a lot at the show and it really got me thinking a little bit about this whole idea of going global and leveraging global resources, which I’m going to talk about as both a, an opportunity and a threat because Sonny very much positions it.

As an opportunity and this book has case studies and it real world case studies, they took the names out, but these are actual companies and actual results. And so as a for example, to give you a sense for the opportunity as sunny outlines it I keep by design worked with an MSP 5 2 million a year in labor costs.

Outsourcing some of their work to to India, the IT by design allow them to save 400, 000 on labor. So now their labor costs annually is down to 1. 6 million. All 400, 000 kind of dropped to the bottom line. So EBITDA goes up. From 750, 000 to 1. 15 million, which was enough to get them from the 5x multiple bracket in terms of valuation to 6x.

And so you take 5x times the the old EBITDA compared to 6x times the new EBITDA. The difference was 3. 15 million, which is to say that that 400, 000 savings By outsourcing some technical work to India, increased the valuation of this MSP by 85%. And I guarantee you IT by design doesn’t produce that, those kind of results for everyone they work with.

But as I said, there are multiple case studies in the book. So this is the kind of thing that can happen if you consider outsourcing some of your technical work. And we’ll come back to the consider there. The other thing that has this very much in my mind Erick, is just looking around at the show, I was seeing a lot of These very big MSPs we’ve been talking about.

We’ll just call them roll ups for purposes of the show here. And that’s because a lot of these roll ups are IP by design customers. I think IP by design has about 168 of these roll ups or platforms on its radar, that’s keeping an eye on 30 of them. Are already it by design clients. And it’s a pretty good safe bet that a lot of the others that they’re not doing business with are doing some outsourcing on their own or through some other vendor of some kind, because these are all private equity backed firms and private equity is really good on very [00:05:00] happy about saving money on labor and perfectly willing to outsource labor overseas and so on.

So this is the kind of thing. That you can expect these larger companies to embrace. And so there’s an opportunity. On the one hand, there’s a threat. On the other hand, you are already, if you are competing with these much larger firms with much deeper resources, you’re already at a bit of its advantage.

If they can also leverage this cost advantage here to offer more at the same or lower prices than you are, you’re at a further disadvantage. And another reason to think about. Leveraging this opportunity, whether it’s through IT by design or somebody else to offshore some of your technical work.

Now, this is the point in time, Erick, when a lot of people in the audience are saying, I tried it once and it didn’t work, or I’m very concerned that if I do try it there are going to be language issues or just the service standards aren’t going to live up to what I’m used to. And my clients are used to here.

And that’s a very difficult issue for me to address because I have not utilized these services. I’m just going by what Sonny has told me basically. And he has a dog in this hunt, as they say, but he says, you really owe yourself to at least take a run. Give it a try. If you tried this even a few years ago, and it didn’t work for you because with each passing year, a larger and larger percentage of the population in India is under 30 that it’s a very young population right now.

These are people who were raised with a smartphone in their hand. They speak fluent English in a way people didn’t in the technical workforce there, even just a few years ago they have a lot of the same cultural references. He’s very insistent that your customers really won’t know the difference.

And I’ll just close before getting your opinion on all this, Erick, with a quick little anecdote along those lines. So I did an interview with Sonny when I was at the show. About 10 minutes before the interview, my phone rings and it’s Sonny’s admin. And she’s just making sure I know where the meeting is.

And that hasn’t dropped off my calendar. She called Sonny, same thing. And the CMO who joined us for the meeting, very professional, very good. And I discovered at the beginning of the interview that she was not calling from the conference. She was not calling from IT by Design’s headquarters in New Jersey.

She was calling from one of their satellite offices in India, where she’s based, and where it was coming up on 1. 30 in the morning. And I’m telling you, Erick, you would never have known. She spoke absolutely flawless, perfect English, the call quality, the, everything about it. Was exactly what you would expect if you’re dealing with somebody here in the States.

That’s his administrative assistant. Is that what the level one help desk support is like? I don’t know, but it was a revealing little anecdote, right?

Erick: Yeah, Rich, in the era of globalization here, right? There are no more boundaries. There, there’s a lot less stigma. Around outsourcing to offshore.

There’s near shore opportunities as well. I’ll share a story from when I had my MSP practice and we decided to take a chance and outsource our knock back office knock operations. This was in the early two thousands rich. So there was a language barrier back then there was a challenge.

So this was a situation where it made sense for us to. Outsource our back office supports to free up our technicians and engineers that do, we’re doing the monitoring, patching, updating, responding to, service outages in the, in, on devices in the infrastructure and things like that. When they weren’t speaking to our end user users of our clients at that point, because we weren’t, we were doing the help desk directly for them, but they were doing everything else.

And a couple of things happen, rich. We stopped getting woken up at, three in the morning when servers went down and things like that, because our offshore team just handled it, so they were our back office word. So we were able to reduce our knock labor costs that we were delivering by about 40 plus percent and reduce the tickets that were coming to my team because of knock infrastructure stuff by 60%.

And that was just way back in the early days. As you mentioned today, we’ve got lots of offshore options. There are offshore options all over the world and in different countries, not only in I make it they’re very accessible and again not as much stigma as back in the day, because I was one of the first people that said I’m not sure how this is going to work.

I’m, and. I was trained in building out call centers and service desks in the enterprise back before I launched my, my IT practice and, MSP. So I was very keen and aware about where the challenges might lie, but what we had to learn and what I had to show with my team, rich was [00:10:00] it’s not their service desk, it’s not, they’re not right.

It’s the to break past that us versus them thing and this finger pointing stuff, this is our knock now team. So we need to collaborate with them. We need to coach, we need to lead them. We need to onboard our clients in a more effective and documented manner. We had to learn how to do things the right way.

So this could work and then treat them as if they were just down the hall and work with them that way. Later on, after we sold our MSP and launched MSP university, and then rebranded as SPC international rich, we hired lots of offshore. Folks from India and the Philippines for our back office administrative support.

So just the experience that you just had that you shared where somebody was checking in on you and making sure there was You know, you knew where to go on things like that all of our admin staff for the key leadership these other organizations that I co founded were offshore And work with our team and you just have to understand that they now Understand how to speak the idioms the written communications and holy cow with ai and stuff Now rich it’s going to make it even easier to create some of this seamless Communication and seamless experience.

So there is no, Oh they’re, they’ve got part of their team over here or part of their team over there. I think all consumers now know, and have experienced having offshore support, even from just a consumer perspective. So I’ve experienced that. I’m sure you have. So I like this approach.

I think that more MSPs good experience it and try it and don’t experience it. And here’s a tip rich. Maybe I’ll change my. Tip of the week because we’re talking about outsourcing. Maybe. Yeah. We’ll just do that. We have, so hang on to that. I’ll save it now. I’ll save it now. I’ll sit back to you.

Rich: Yeah. I, cause I just want to follow up on a few things you said there before we go to the tip of the week there. So first of all, it was so interesting to hear you say, we’ve got to stop thinking about. The overseas knock as the service, they’re knock, et cetera. It’s it’s, this is our knock.

This is part of our team. There’s work required on our part to weave them into everything that we do. I was struck by that because there were MSPs that work with it by design on stage and speaking at the event, I spoke. One to one with a number as well while I was at the show and 100 percent of them, Erick, all of them said exactly what you just said.

It’s actually a pretty critical success tip for taking advantage of a service like that. The other thing is, you were pointing out that that the NOC folks you were working with back in the day were behind the scenes, not necessarily. Communicating with the end users.

And that’s an important point too, that I didn’t flag before. Sonny has this concept of what he calls front stage and backstage. And front stage is customer facing stuff, backstage is stuff that is important, but doesn’t necessarily touch the customer directly. And so if you have qualms about outsourcing any part of what you do, then, maybe a starting point would be to just focus on the backstage stuff so that all the communication is still through your team.

And, but some of that work, especially the night and weekend work that, you don’t want. To get woken up yourself with, or you don’t want people to get woken up, that you have that resource to use for that purpose, but you don’t have to worry about the communication issue.

And I guess the last thing I would say is just and this is probably the ultimate point Sunny would make, which is just be open minded about this. Don’t assume this won’t work for you or can’t work for you. At least explore it. For some of the reasons that I talked about before it might not be right for everybody.

It might not work out. I don’t want to sound like I’m endorsing or making any promises about this route, but coming home from this event, I really do see the logic of attempting to make this work and the power of of this kind of thing if it does work. So I would just encourage folks to be open minded.

But again, you have direct experience with us, Erick. So let’s go to your tip of the week and share some best practices, please.

Erick: All right, Rich. Today’s new revised tip of the week is how to work with outsourced organizations that provide services through you, through your clients. Number one, we’ve already talked about it, Rich, is it’s not us and them, right?

We have to understand that we are a team working together. Together? And that means that it’s our responsibility to onboard and train these these outsourced resources, just as if we were hiring them direct. We don’t expect someone to be hired and immediately start throwing tickets at them, right?

They’ve got to be trained now to be [00:15:00] fair. The the one of the value propositions for organizations like it by design is, Hey. Our teams we put them through training, like they understand, they know the PSA are using, they know some of these tools. That’s a, that’s good. That, that shortens the ramp up, but you still have to onboard them to your particular processes, to your culture, right?

And understand and be open minded about these different cultures, right? There is a culture, a cultural gap that we need to close. And the intention here, Rich is. To build a team together so that we are stronger together. So number one, it’s not us versus them. It’s us. And even we were even holding, cause we would have a big, a quick 15 minute every morning meeting on the technical team rich that I led.

And it was basically how many tickets were open yesterday. I’m going to give us a new, we closed yesterday, which were the problem tickets. Do we have any customer issues? What’s going on with projects? Very quick stand up meeting. Our outsource team is invited to that meeting because they have to be under them, understand and going through things because they would be, you’re working on tickets and to your point, this back office front office.

Ours was back office. It was knock. So we said back offices, knock front office in this definition would be service desk working directly with end users, right? You may have different providers based upon whether they’re back office or front office from different countries. Maybe you have.

A better better relationship or better cultural or better communication with, a different like folks outsourced from Spain and things like that, right? We know that there are other organizations that do this. You can mix and match as long as everyone is trained in your incident management process, which could be specific to you.

You may focus on a very specific vertical. You may have projects that are migrations and things like that. You’re looking for back office folks that have that, that can do that, but you still have to manage and supervise them. You’re their performance is measured the same as your team’s performance, not harder, the same.

So that means that you have to establish rich, your processes and procedures, document your stuff and your KPIs that you manage your team with, and not just because you’re outsourcing it, it has to be the same and that’s how you create this unity. So number one. Unity, it’s our team. We onboard them the same, which we coaching and mentor them the same way, and then we measure performance the same way number two, understand that you want whatever they’re entering in tickets, if it’s back office stuff, or even if it’s front office stuff.

Whatever notes and comments that your outsource team is making, have that in an internal notes when you’re first onboarding so that while you’re training these teams together, you’re training them on how you like your communication, how any tweaks you want to make, or sometimes just always put stuff in the internal notes and our team may then take pieces of that as they’re maybe escalating things back and forth.

So the client only sees what you want the client to see. . Let’s see, another, I had another really important one. Gosh, you had me going there, rich feedback. And then I’ll probably think of it by the time you give me some feedback.

Rich: No I think they, the overriding point basically that you’re making is the services are an extension of your team. And if you really want to realize the full potential, the full value of what you’re paying for these services and get something out of it more than Just the labor costs savings.

You, you have to. Treat these folks as an extension of your team. And that very much means Train them, inculcate them in your culture, include them in your meetings and so on. And the vendors that provide these services and set you up with with folks offshore want, expect will facilitate that, they understand that the success of The contract kind of hinges on a lot of this stuff.

Yeah, it you need to make sure that you go in knowing all this and don’t think about it as I’m going to cut a check and then we’re ready to go. Somebody calls, somebody experiences an issue on a Sunday night. It’s taken care of. It’s not that easy.

Erick: And I remember the third one rich and it’s and it is you have to have your processes Documented you have to onboard client.

You may have to onboard your clients or re onboard your clients differently because they need More data than your existing Teams need right so you have to make certain that you are onboarding your clients properly and documenting everything properly and making sure that You’re storing, passwords in, in, in the proper secure areas and tracking all that stuff.

Absolutely. Just like you’re bringing [00:20:00] someone new in and you’re giving them access to these things. So don’t think that you’ve got, that you’re going to be successful. If you have poor documentation and everything is scattered everywhere. And whoever you bring in, whether they’re someone you hired direct or outsourced Expect them to succeed when they have to stop what they’re doing and ask you questions, 15 questions to close a ticket, right?

You have to have that documentation accessible to these team members and you have to follow it the same way. So remember you’re building, a larger services. You can double or triple the size of your services and scale much more broadly and save costs while doing it. But you cannot do any of that stuff if you’re just.

You know making it up as you go

Rich: do it right folks and you can theoretically as Ericka’s saying scale the business grow your valuation it’s a lot of benefits. We’ve talked about it’s all contingent on doing it in a rigorous, way that I’m sure these, providers, the companies like Ikea by design can help with in terms of what they’ve seen be helpful for their clients.

But if you do it right, it really can pay off. And so it’s at least worth. into. So with that, we are going to take a quick break. When we come back on the other side of that, we’re gonna be joined by Kevin Lancaster. He is the CEO of channel program. I’m gonna let Kevin explain what channel program is all about.

Once we have him with us. But the Key thing about channel program is they work very closely with a lot of vendors and they work very closely with a lot of MSPs and that puts them in this sort of unique position to understand both sides of that MSP vendor relationship. And we’re going to talk with him about some of the the insights he’s seen.

Get some advice from him for MSPs on working more successfully with vendors maybe talk a little bit about some of the things vendors should be doing to work more successfully with MSPs. All that is coming up after this quick break. Stick around folks, we will be right back.

And welcome back to part two of this episode of the MSP Chat Podcast, our spotlight interview segment, and we are joined today By Kevin Lancaster, the CEO of Channel Program, someone I have known for many years since his days at IDAgent but Kevin, for the benefit of folks in our audience who are new to you tell them a little bit about yourself and about Channel Program.

Kevin: About myself I finally admitted it to myself. I’m a serial entrepreneur. It took me a while to really come to terms with that term, but I’ve been fortunate to start several organizations, several companies and MSP back, starting in 2003 as you mentioned ID agent, that’s when we met several years back, but I spun that out of that MSP grew that.

So that to a large platform player in our space. And then recently as of two years ago, launched channel program. And the concept behind channel program is that, this marketplace, as you and your audience knows, it’s ridiculously fragmented. It’s fragmentation or fragmented is just, it’s an understatement of just how just disparate.

In large and disconnected this industry. Yeah, it can be. And so our goal with this platform is to really bring both sides of the channel together. The vendors on one side where they get visibility and they can manage your channel and scale their channel. And on the other side, we can serve up, the right information peer based information to the MSPs to help them make better decisions on which vendors to align with moving forward.

So that’s us in a nutshell.

Rich: And obviously a very interesting value proposition, both for the vendors and for the MSPs. From our perspective on the podcast, what’s great about what you guys do is you are sitting there right in between The vendors and the MSPs and we’ve been talking a lot on the podcast recently about relations between vendors and MSPs.

In particular, there’s data from CompTIA suggesting that MSPs feel like they have too many vendor relationships to juggle. They’re looking to trim that down a little bit. And you guys have a unique perspective on just the sheer volume of vendor relationships a typical MSP is juggling. So tell folks just a little bit about what Navistack is, and then what that tells you about, how many vendors a typical MSP works with.

I’d be glad

Kevin: to. So the interesting thing about Navistack it’s a lack of better description. It’s a visualization tool. It’s the first real tool that’s existed in this industry. That allows an MSP or just it could be an internal IT organization could be, a service provider allows them to visualize their technology stack.

If you talk to most MSPs and you ask him how do you manage your tech stack? The answer that you’ll most often get is we have an Excel spreadsheet. list all our vendors and maybe our contract start dates and then dates. But so we started we launched Navistack just about a year ago. Now surprisingly, I can’t believe it’s up in a year, [00:25:00] but we launched with the idea that the core stack of an MSP consisted of about 29 different products, and that was your RMM.

That was your, your PSA backup, email security, that core. But when we opened it up, we launched it to the MSP communities and go into, just to start to visualize your stack and see what gaps you might have. We had MSPs saying, Hey, can you add my financial tools? Can you add my, this, that, and the other thing?

Great example actually is just really in cybersecurity, right? You hear about just how crowded and how complex cybersecurity is. When we launched, I think we launched with about six different cybersecurity categories. And if you look at Navistack now there’s roughly 22, 23 different.

Categories. And so today, if you look at Navas Stack, it says that there’s roughly 70 core products or services that an MSP would use to either deliver their service to their customer or manage their operations. Again, going back to the RMM and PSA, it’s not, that’s necessarily something that’s customer facing, it’s something operational.

But that’s given us a ton of insight. A year later now, we’ve crossed over 33,000 products that have been added by MSPs to the stack. Those products are coming from roughly 900 and think the last number or less count we have with 960 different vendors. So you hear about, I have too many vendors or vendor fatigue or just technology overwhelm.

It’s real. It’s very real.

Rich: So 70 categories, is it fair to say or can you even say, is that sort of an average number of vendor relationships for an MSPB job? And I’m sure it. Depends a lot on the size of the MSP but that’s not maybe at the upper boundary of what you’re seeing.

Kevin: Yeah surprisingly initially when we saw this, we were like, this is, this has got to be an outlier or somebody’s going in there and just clicking around and adding everything. And we actually had early days, we had one or two MSPs adding 100, 125 different MSPs. I think 100, I think it’s 151 vendors added to a unique stack.

And their rationale is that they’re a little bit larger MSP. They’ve rolled up a couple other MSPs underneath and they’re trying to normalize their technology stack. And then they’re also using the tool to Essentially compare, right? Because we, we’re fortunate that the community has embraced the platform and we’ve got thousands and thousands of reviews, product reviews on the site.

But to answer your question, what we see on average, in aggregate, MSP is working with 22 unique tools that they’re tracking within Navistack. And it comes from, roughly 11 unique vendors today. And so there are within there, there’s outliers, but when you normalize the core stack it says there’s roughly it’s a 21, 22 different products that an MSP is working with on a daily basis.

And you think about. You think about the fatigue, right? The vendor on one hand, they want, great partners and they want partners to utilize their technology, and they want them to grow. And depending on the pricing models, you have to nurture them and get them to use the product and then bring it to the first customer and second and third.

And so on. But you imagine the, from, putting your, putting my MSP hat back on. Now I’m working with, 22 different vendors. I have to log into 20 different. Two different portals, they’re all vying for my attention. And at the same time, I’m trying to keep up with the Joneses down the street and I’m trying to keep up with the technology trends.

So my stack is evolving quite quite frequently, but yeah, that, it’s surprising, the number of products that are added and then the frequency of products that are being updated and replaced. So it’s Yeah, it’s this is a, it’s a fluid, very fluid game on both sides of the the on the board for the vendor and the MSP.

Rich: That that 22 ish number you cited there did that surprise you when you reached that sort of consensus average figure, did that feel about right based on your days as an MSP or did that seem a little high?

Kevin: No, it felt about right. Again, what we did is, again, we looked at the core stack.

If you add back in, they’re using QuickBooks, they might be using HubSpot or Leap or, some other CRM, normalize it. Number does jump up to the low thirties. But we looked at really what are the operational what are the sell to or sell through type of technologies that the MSP is using?

And that felt about right. The early days of of windmill. We’re doing service delivery, we’re real core, core focus was public sector, the FedGov in particular. We, early days were probably in that 10 to 15 product range, but then as we evolved and we brought on this reseller division, I think we were working with 70 different technologies.

And Navistack, I think in a lot of ways is me going back, 10, 15, 20 years. If I could have done it all over again, how could I better, manage my vendors, better manage my technology stack and, overall profitability of my, my my business at that point.

But yeah, I think 20 does feel about right. 20, 22 core solutions. But then again, and we [00:30:00] haven’t broken out to this degree and we will here shortly, there’s definitely going to be a a really big spectrum between kind of your smaller call it 2 million MSP that’s providing kind of the core blocking and tackling services versus some of your larger monolith MSPs that have very robust cybersecurity practices that might even have just in their cybersecurity stack, 20 different solutions, right?

So we’re close to being able to pull that data out and report back and help MSPs make even better decisions. But right now we’re looking at the aggregate of the data at this point.

Rich: In, in aggregate the premise of this conversation basically is that relationships between vendors and MSPs in aggregate are imperfect, let’s say, not bad necessarily, not good necessarily, there are, areas of improvement that, that could happen.

MSPs want things from vendors perennially that they don’t get, vendors have frustrations with the MSPs they work with to the extent that those imperfections are there in the relationships. How does it wind up impacting both parties to the relationship?

Kevin: It’s a great question. So talk about a couple of things, right?

Talk about the volume of vendors that we’re seeing in the space that have been added. And then talk about attention span. So the volume and attention span, there’s only so much bandwidth, so much time in a day that you can dedicate finding new vendors and read, refreshing your stack and engaging with your existing vendors.

And I think that is going to be, it’s going to become even more of a challenge as we move forward, because, one, one interesting statistic or, point of data is that, about this time last year, we launched what we call the channel technology map. And at that point we had, we’d we’d had several thousand product reviews on the site and we had Navistack might’ve been two months old, maybe a month and a half old.

So we might’ve had, a couple of hundred vendors added to Navistack. But when we launched that report, I think we, we showed on that report, the visualization showed about 600 different vendors. That represented roughly 730 products or something like that. Cause some vendors have multiple products, right?

They’re in different, multiple cat or different categories. The report that we’ll launch here in, roughly two weeks shows that, again we’re probably right around just under a thousand vendors, I think it’s 960 vendors, but that represents Almost 1700 products. And so go back to, number of vendors, attention span.

It’s going to be harder on both sides of the equation moving forward because technology is moving fast. There’s a influx of new vendors. And that the MSP has got to. They got to keep up with it and the vendors got to keep up with it. And ultimately they’re both going to have to figure out ways to work more collaboratively.

Cause my fear is that you’re starting to see this, but you’re starting to see so many products and individual categories that, most categories are getting commoditized at this point. Right and price points get low you get commoditized. It’s harder for the msp to make money It’s harder for the vendor to make money And at that point it’s harder for the vendor to invest in enabling their partners, right?

So that’s one of my fears moving forward is that this market is getting You know, it’s maturing. It’s great. It’s a two plus trillion dollar, marketplace, private equities come in and everybody’s moving fast, but the attention span and the life cycle of these technologies move so fast that it’s just going to be, it’s going to be imperative that we figure out ways to work more collaboratively, between, MSPs and their partners, because, it’s in the long run, it benefits, doesn’t matter, again, if it’s a sell to product or a sell through product, benefits both parties in the long run to have better relationships.

Rich: Due to the attention span issue you’re identifying there a trend that CompTIA has uncovered in its research that MFPs are getting frustrated by the amount of vendor relationships they’re juggling like right now they want to winnow that down.

All of that kind of suggests That vendors are going to have to be a little bit more mindful, maybe work a little bit harder for the loyalty of MSPs out there. You have this big treasure trove, big database of reviews of vendors and vendor products in your your database or on your platform right now.

What, and you sift through that and look for trends and so on. What do those reviews tell you, MSPs? Appreciate and value most in a vendor.

Kevin: Yeah, that’s a great question. So as we started to formulate these we’ve reviewed questions. Gosh, now I think we’ve had that up there for about a year and a half, two years now.

We wanted to get input on the technology and where the technologies were going, but then we also obviously wanted to get input on the quality of the channel program. The quality of the experience, cause you have a great product, but if you don’t have that engagement from the vendor and they don’t, enable you properly and it ends up being just shelfware, right?

So some of the, so one of the questions asked, again, we’re rating the quality of the channel program. What do you like the most about it? And the vendors that score the [00:35:00] highest, broadly speaking, whether that’s their product or just the overall vendor the ones that score the highest have dedicated channel management.

And you it sounds like a no brainer, right? It’s of course you’re selling through channel and you should have a channel manager and what have you, but you see this really interesting accordion effect, right? Smaller vendors, as we’re getting up and running and they are, they’re just, they’re, their lifeblood is customer satisfaction, partner satisfaction, getting them enabled.

Smaller vendors often under invest in that area. And you can see that in the data. You can see some of the upstarts, the newer technology vendors they actually have great products. They have loyal fans, but then the quality of their channel manager engagement Is it suffers right in the middle of when these vendors are getting to scale and are realizing that hey, we’ve got something here We’re getting velocity where maybe we’re getting a couple hundred, partners We’re investing in a prm to try to better manage our channel They’re going out and they’re trying to find, the channel managers that really get into it The relationship aspect of working with partners and yeah, they do a pretty darn good job.

So you see the quality scores go up right in the section, the middle of the bell curve, but then you see on the far right, and unfortunately you see this out on the thread, Reddit threads and other places, the larger the vendor gets more complicated and multi product they get, the harder it is for them to really Uh, maintain that level of customer interaction or partner interaction through channel management.

And they often, at that point, a lot of these big vendors are multi products. So it’s really about the account management and cross sell and upsell and monetization. They often, they leave the the partner success or the channel management success part at the door. So I think the, one of the main indicators of success is having an engaged channel manager that’s accessible and proactive.

In working with your partners, right? And I think that, that is one of the things that just absolutely lacks, right? And when’s the last time, maybe, speaking to the listeners, but when’s the last time that you had a proactive outreach from a channel manager that’s not trying to sell you something specifically, but it’s just really, trying to, try to help you improve your business or help you scale your business.

And, we know this, you’ve been in this industry long enough, some of the rockstar channel managers out there that Yeah. That everybody aspires to on the vendor side. So I think that’s, that is the, one of the leading things. And then, secondary to that but which is almost equally important is enablement.

Enablement is absolutely crucial. It’s vital for every vendor. Again, the last thing, and I think some vendors don’t keep this in, at the forefront, last thing you want is you have a partner that signs up and they’ve got this, great, nice, shiny object and you don’t have an enablement plan.

Your product could be as simple as, could be the simplest product out there, but if you don’t, Take the time to invest in enablement. And that’s the white label documents, that’s training, that’s proactively outreaching and checking in to see what obstacles, are in front of the MSP.

You’re not leaning into enablement, then, you’re going to also suffer and that kind of goes along with having, the right, channel management competency and internally. And I guess one last anecdote on this, think a lot of that goes back to even the early ID agent days.

Some of the listeners are familiar with what we had built. We built something that was, we thought, super intuitive. It was like a no brainer. It’s do a scan, take it to your customer, your prospect. And say, Hey, look, your password’s out here, 19 different ways, 19 different breaches same password, clear text.

You might have an uppercase, might add a lowercase, might add a number or exclamation point at the end. We thought it was like, it was that easy. All right. But then, and then we had just a tremendous amount of MSP signing up and we were moving fast. But then we had a moment where we had to pause and said, great.

We just had a couple hundred MSP sign up. We’re not hearing from them or we’re looking at how many customers are actually, adding into the platform and you would see very. Quick drop off after week one, they’re all hyped and excited and they’re using it. And then they may have done a couple of scans and then they might’ve gone out to one or two of their core customers and got them to sign up.

But after, week one, week two, week three, you could see, the utilization was falling off the cliff. And that’s where we say that we have to, as simple as this is, we have to lean in and build out this world class, what we consider world class enablement programs. We bought. Brought folks on Dan Tomaszewski, who’s now with Kaseya, but, to build out this enablement, plan for something as simple as just showing somebody their compromised, already compromised, password.

And so I think that kind of highlights, it doesn’t matter how simple the technology is, or the product, doesn’t matter how complex. You gotta have the right people, supporting your partners and you have to have the right enablement plan and mentality. And that includes, the documentation, the training, and just being there.

And again, it’s a second time I referenced Reddit, but yeah, this, it’s one of the more common things you’ll see it on Reddit, right? Is just, is the complaints and MSPs can’t. [00:40:00] They can’t reach, point of contact at a vendor. And it’s, stalling out their progress with the product or that vendor in general.

Rich: Yeah. And just to be clear, cause that’s really interesting. A lot of people would probably guess. The two most important things or, or what would be the most important thing, margins maybe or leads or something like that. But it almost sounds like the I don’t know, you tell me it sounds a little bit like those might be table stakes and it’s that direct account manager relationship, the enablement, that sort of higher touch, higher value stuff that really makes the difference for for the vendors with their MSPs.

Kevin: Yeah I agree. Yeah, the, achieving velocity and getting MQLs and converting, those into sales and all that stuff that, that is table stakes, right? And, that’s the blocking and tackling and that’s building a business. But I think any, most competent business owners, CEOs will tell you, the worst thing you can do is bring on a customer and have them churn, right?

Cause you know, then you gotta go out and spend the time and find new customers, right? And your cost of sale, depending on what the product is, it could be outrageous and it’s that old adage, right? It’s, it costs less to keep a customer than it is to acquire a new customer, right? And then you’re losing, and look, the reality is, right?

Is these software companies, they’re measured by. Their overall ARR, right? Annual returning revenue and their churn, what percentage of churn. So it’s great that you might have this velocity on the front end and you might be kicking it and you might be killing it.

But if you’re at 15, 20, 30 percent churn, that’s the kiss of death, right? That’s that’s not where you want to be as a vendor. And unfortunately, I think with a lot of the vendors, they. They move fast and it’s a reality. We’re moving fast and it’s hard to change the tires and drive the bus at the same time.

But, often they get to this point where, great, we celebrate success. We’ve got a couple hundred, partners and we’re moving, but then they see, the churn numbers start to spike. You see the partner’s utilization start to decline, and then the next new shiny object thing comes in and takes the partner’s attention.

So you are, as a vendor, you are fighting for attention all day, every day, right? Because your customers, your partner’s challenges are they’re customers expectations are becoming increasingly they’re becoming more demanding on the MSPs. And yeah, this is this is what it gives you, you gotta work, top down and bottom up.

Where’s it? This is why this is a team sport. And if the vendors don’t understand that, the vendors that don’t understand that again, are often the ones that come into the channel and you see them bounce out pretty quick.

Rich: Account managers enablement. So we were talking a little bit here about the things MSPs like appreciate most in a vendor.

Do you get a sense from the data about the things that they like least the things that are most likely to create dissatisfaction with the vendor?

Kevin: I think if you looked at it so we don’t ask it in the direct. I guess we do ask we do ask sort of thing. We ask that directly what do you like the least?

That’s actually one of my favorite questions. I should actually use that in the interview interview processing all the time. What do you like to do the least? But I think the way to look at it is that It’s flipping upside down. You see a very clear clear line between the vendors that don’t do these kind of basic things, and the level of satisfaction of their partners.

And so I think the best way to answer it, if you’re not doing these kind of, basic things that enable your partners, yes, it’s just, it’s going to become more and more challenging. Like I’m really and I did mention it previously, but I’m really. One of the things we’ve been picking up on, and it sounds good in the short term and it’s very logical in the short term but you’re seeing a lot of a lot of vendors because they’re multi product platform vendors and they’re fighting for attention just like the upstarts are, but, this, these tools and the services, Downstream are getting more and more commoditized, right?

So it’s great that the vendors are using pricing as a weapon against each other because in your cost to acquire a product is lessened, but so is your competitors cost to acquire that product is lessened. And that gives a competitor more margin flexibility. And if they’re looking to, create velocity or win deals or go against you, that kind of commoditization of these products and the pricing moving downhill ultimately to me is a very, it’s going to be very challenging for our industry.

Again it’s great in the short term because it helps. There’s some operational efficiency, you’ve got some automation, a lot of this AI stuff coming in, but long term that’s going to be, I think, detrimental. And that’s what’s going to highlight it’s going to make it even more important for the vendors that lean into this, this enablement and the relationship side.

So going back to your question, I think I think it’s pretty clear, like the vendors that don’t invest the time are generally the ones that. They’re, whether it’s a warranted or not, in some cases, they’re often the ones that are put on blast out on those public boards.

But then you can see it pretty clearly you see some vendors come in, get momentum, and then they go by the wayside because they don’t invest in, in that level of support. [00:45:00] So answering your question in kind of a roundabout way, but yeah I think it’s just, there’s attributes of a quality, vendor experience that you can see.

Across the board. And I think it really, again, comes down to this enablement, comes in down to the relationships 101. If you can’t master that, then you’re gonna have a hard time scaling in this industry.

Rich: Yeah. One of the sort of emerging themes here basically is for vendors, the key to stronger relationships with MSPs is to treat them like relationships and not transactions.

I’m curious do the vendors get it? You were talking about there, there are vendors, particularly, early on, they are in rapid growth mode. There’s a lot of stuff going on. Younger vendors might have budget constraints. Are there reasons why they can’t invest in account management, enablement, et cetera.

But they understand that’s, what’s going to make the difference for them. Or do they not really understand that’s what matters to MSPs?

Kevin: I think the answer to that question is yes and yes. And it depends on, the starting point of that vendor, right? You’ve seen, you think some of the more mature.

Vendors that have come from enterprise down or selling direct. You think they’d understand the value of kind of the, the relationship management side of things. But it’s more than just providing support, right? Product support and having 24 by seven and somebody, answering, questions if you’re global.

So I think often is the case that some of the larger vendors under appreciate or undervalue. Okay. The importance of channel management, and really what it means. And so I think that’s a shock to them because it’s it’s often seen purely as an expense. And it’s really, it’s an investment into, churn mitigation and growth.

And I think inversely on the other end, yeah, I think one of the challenges is that and you see it, you see this play out time and time again. The emerging vendors that have maybe there’s some, let’s take a step back. So there’s some vendors repeat Vendors in this industry that have maybe the second, third, vendor that they’re on that they, they purpose built for MSPs or channel, they get it and they often, they under, they understand they have to invest in it early.

But I think what’s commonplace is vendors that are new to the channel. They’re starting to scale. They, again, they don’t really understand the importance. And we are very unique industry, right? Particularly the MSP portion of this, broader channel community is really unique.

It is very much relationship based, right? We probably see each other at, dozen and a half different events every year or what have you, because it’s, it’s events and it’s relationships getting out and, and it’s collaboration. And so I think that, that’s It’s almost like a shell shock to some of these emerging vendors gets back to the fact that it’s just highly fragmented and they get into this space and realize that, now I’ve got to go to, 20, 30, 40 different events each year and, I got to lean into enablement.

So I think I think again, that there’s a kind of the, I don’t want to call it a maturity curve, but some of the, Some of the smaller vendors, they don’t really get that, coming into this. They might have built multi tenancy into their products that they might not have.

But they all get to a point where they start to realize that this is a, a relationship based industry. The MSP, the core, MSP subset of the broader channel. So if you generally accept there’s about a million companies that you would consider channel partners, the resellers or the agents, there’s the bars and then break it down to roughly the 70, 000 channels.

MSP is out there, we’re talking MSP market, right? It’s relationship based. And yeah, so I think the larger ones have a hard time because they’re used to running at volume and scale and they got to slow down and invest in relationships. And then the smaller ones, they’re not often thinking about the, real true impact that channel, management and enablement has on long term viability of the vendor in the space.

Rich: And I do wonder, as you’re talking about that if that particular issue, the lack of understanding about how important relationships are, particularly with MSPs, if that’s maybe even a bigger problem now than it’s been in the past, because there’s so much excitement in the SaaS vendor world, especially around product led growth and the idea that, the product should be so simple, it sells itself, it installs itself.

And, this. Discounting of the role of the channel in that process there and that you know is a a highly scalable, but relatively impersonal kind of relationship. I wonder just if there are a lot of vendors out there right now who just don’t understand that particularly in the SMB technology world relationships with the MSPs who support the SMBs and relationships between the MSPs and the SMBs are actually very important.

Kevin: They absolutely are. And, just thinking about it, I probably have the last. Um, past month have gotten inquiries from maybe [00:50:00] five, six, seven vendors that are up on our platform. And we’ve, again, we’ve got hundreds of vendors up there asking, Hey, who do you know? Who do you know that might be looking, and thinking through some of the names in my head, they are at least maybe three or four of them.

They’re at that inflection point, right? They’re in, they’re starting to get some scale. They might’ve just gotten some financing and you’re realizing they have to. Invest in this and I’ve probably had that question asked of me via email or in person via LinkedIn probably a hundred times in the last year from vendors.

And yeah, I think, yeah, it’s, they’re starting to it’s, it is, it, that is table stakes in this industry, as you pointed out, but yeah, just the rapid acceleration of vendors and technologies that again, that kind of going back to some of the stats that I’d thrown out there about, the previous year and then this year’s technology map, it’s It’s wild to see how fast this market is evolving.

Again, you think about just how many decisions an MSP has to make throughout a day. How many different vendors that they’re, knocking on their door and I gotta Find where I’d seen the statistic, but there was something that was floating out there and a couple of years ago that said 70 percent of MSPs go to one or less event a year And so it’s interesting because we you know, we feel like at times, you know the entire industry, right?

We’re at all these events and we stand we’re it’s been in it for, years. We feel like we know it, but then you realize that it is a lot. It is so much bigger than what that, that’s, there’s also enough, another interesting dynamic in that most of these industry events again, it’s just it’s pretty much self explanatory.

It’s maybe because we’re dealing with so many small businesses, right? Smaller emerging MSPs in this industry, the vast majority of them are small, maybe sub two million, two and a half million in revenue, technician is not often the one that’s out at these events, right? And think about that.

And that’s pretty surprising, right? It’s often the business owner whether it’s one of the peer based events that you go to, or even some of the larger industry events that the, IT Nations Connects, the Datto Cons, the Pax8 events I think they do a decent job of bringing in techs, but it’s often the business owners, right?

And that’s important, right? Vendor needs that relationship, but yeah, it’s like, how do you effectively reach the technicians that don’t get to go out to the events? There’s stuff on the desk, right? You’re stuck inside of those stuck at a customer site. And so I think that’s another thing that the code that the vendors need to figure out how to crack is how to get more integrated into your.

And your customer business. And there’s some actually really interesting, pivots going on in this in this space. I love what Adam and Adam Slusken and the crew are dealing with CyberFox. They, they participate in a lot of the big events, industry events, but they actually team up with a couple different vendors and they host in person events at their offices down in, I think they’re in the Tampa area.

And they’re bringing their customers in. They’re footing the bill to fly their customers in. They understand the importance, and they might have a price. None of this is also relative. Maybe the, your pricing model and if you can afford that level, but they’re realizing that they need to cater to their partners, they need to really lean in. And I think there have a big question bringing in technicians because it’s, it’s great. You need the sponsorship and you need the, the involvement of the business owner, but if you can’t get the technicians in there and, pumped up and, enabled and partnering, then again that’s, it’s going to be, it’s going to be slow evolution and and a really quick downhill slide for vendors.

So I think that’s it’s another really interesting, again, dynamic of this marketplace is it’s there, the big events aren’t going to go away. I think one of the challenges that there’s so many damn events, our industry calendar, We have up on our site has 1, 800 events

Erick: on it,

Kevin: right? You go up on, it’s just channelprogram.

com. You can, drop down events and then you’ll see just how many, events are out there. But it’s surprising. There’s a, an insane number of events. Maybe the quality of the interaction at a lot of these events is low. And you still have that stat out there that, 70 percent of these MSPs go to one or less event a year.

That means that we’re missing, such a large percentage of the marketplace. And I think that’s another thing vendors need to be thinking about moving forward as this market, evolves rapidly is that, how do you create that engagement? How do you get, more engaged or deeper engagement within your customer base?

So I think there’s maybe tremendous opportunities for vendors to lean into that. I think that’ll be some of the more common themes that you’ll see over the next couple of years. Again, you get this race to the bottom from a margin perspective and commoditization. And so I think both circling back to that kind of sports analogy, both, it’s a team sport.

It’s not just MSP versus vendor versus MSP. We collectively win, it’s cliche and it’s, it’s often used or whatever, but it, it is, true today and it’s going to be more true moving forward.

Rich: So we’ve been talking about some of the things that vendors can do, should consider doing to be better teammates to the MSP.

Let’s flip it around and look at it from the other perspective. When you’re talking to vendors, what are the things, what are the pain points, the [00:55:00] frustrations that they will sometimes express to you about MSPs and working with MSPs?

Kevin: I think what surfaces is it’s a attention span. I think they, they all understand that their MSPs are they’re overwhelmed, right?

They’re overworked. So I think that, that is one thing it’s a tension span and that’s going to be a zero sum game for the foreseeable future. That just is what it is. It’s the nature of this industry. I think one of the things that, look at it this way. So we talked about early on, we built that visualization tool called Navistack, the next phase or next element of that platform that we launched not too long ago was gave the ability for the to, more effectively manage.

Their vendor contracts. So their start dates, again, this is, it sounds simple, right? It’s like intuitives what business doesn’t manage their, contract start dates and then dates and don’t know their costs. But again, as much as this marketplace has matured over the last, 20 years and more specifically the last five or six years with private equity coming in and all these peer groups doing it, I think amazing job of educating MSPs, but it’s shoemaker shoes.

It’s the blocking and tackling like MSPs. Are still, I’ll say they’re awful at managing their businesses. And that, I think one of the biggest areas of friction between a vendor and an MSP, is basic contract management 101. And you see this and it surfaces in very ugly ways.

And the third time I’m referencing these public boards, one of the biggest complaints that you’ll see out on kind of the subreddit, MSP subreddit or what have you is that. It’s oh, I got automatically renewed or I’m in a, multi year contract or my costs went up, what have you.

And yeah, there, there might be some nefarious things going on. That’s a conversation for a different day, but in general, it’s incumbent upon the MSP to understand like what they’re signing up for, right? How many vendors, what your start date is, what your, what your renewal date is, and even understanding what your notice window is.

Is it 60 days? Is it 90 days? And I think that becomes one of the biggest one of the biggest areas of friction between the MSPs and the vendors, because that, that often surfaces in a very negative way. And unfortunately a lot of MSPs, they take their gripes public when they shouldn’t.

And again, it goes back to, this is a team sport, right? And we should be on the same page. Channel management should be proactive. Vendors should be. And, and it’s a bandwidth thing, but they should be engaged with their vendors. So I think that’s one of the, biggest issues that you see is the biggest pain point for any vendor, again is is churn, right?

And in a lot of cases it’s self inflected, but a lot of cases it’s the lack of maturity of an MSP, and you don’t want to be a buzzkill about these events, but. And we were fortunate that we had one of these, great shiny objects that we were able to convert at events.

But yeah, I think it’s I think the MSP has got to really think about what they’re investing in not just from a technology standpoint, but when you think about it from a relationship standpoint and they need to get on top of their vendor management. So you talk about channel management.

That’s imperative from the vendor standpoint, but the MSP now is, because it’s getting complex and it’s moving fast and you need to understand your margins. And if you’re even thinking about being acquired, because that’s obviously, the talk of the town these days, then you better get your financial house in order.

You better get your vendor management in order. That’d be one of the first things, if any of these MSPs are thinking about being acquired. First thing that the acquiring MSP is going to do is start to look at your technology stack. They’re going to ask for every one of your contracts and if you can demonstrate that you have that level of discipline and insight then that’s going to make it their job of due diligence and integrating you potentially after they acquire you into their MSP a lot easier.

So I’m going in a couple of different directions, I think it, it is the this is just where this marketplace is going. We can commoditize the hell out of it. You can you know You can automate the heck out of it that to me is great, but that’s a race to the bottom and then, and it’s, I think relationships at the end of the day in this industry is what’s going to keep this marketplace growing at this 12, 13 percent compound annual grant growth rate.

And if we want to keep it that level, then MSP has got to invest in vendor management and then the the vendors need to really invest in channel management.

Rich: Both parties to a successful couple have to be paying attention to one another. So that goes for the MSP as well as I very much sympathize with the MSP.

They’re putting out fires all day. There’s email coming in from the 22 vendors that they’re working with. And so keeping on top of all the changes and announcements and so on Is a very difficult thing. But if you’re not making your investment, doing your part to make the relationship work it’s not gonna work for you or them.

Yeah and I’m not even gonna ask you how to solve that particular problem, because that Is a really thorny issue right there. MSPs are just very busy people. But if they don’t take the time to keep up with what the vendors are communicating to them, they are going to [01:00:00] wind up unhappy with renewals and some of the stuff that we see people complain about on social media, that’s a tough one.

Kevin, thank you so much for joining us on the show. This was great. And as I expected you are actually in a terrific position to speak to both sides of this relationship here for folks in the audience who want to learn more about you, get in touch with you, learn more about channel program, where

Kevin: should they go?

Just simple the site’s channel program. com. Easy to get involved, just. MSP, if they just want to go out and look at product reviews, go for it. If they want to use Navistack, that visualization tool, that’s free. Go for it. On the vendor side, to create a profile, that’s free.

Go for it. So I think, that’s a great spot. Then I’m out on the socials. I’m out on LinkedIn all day, every day. Feel free to look me up out there and look forward to connecting with you.

Rich: I, one last question, cause I’ve been meaning to ask you this for as long as channel program has existed.

I remember when you created the company being amazed that the URL channel program. com was still available. Were you surprised too?

Kevin: Um, available is relative yeah, but I was surprised at how affordable it was. I’ll put it that way. It wasn’t off the charts. Okay. Yeah. Fortunately yeah, fortunately it wasn’t terrible.

Rich: All right. Kevin again, thank you for joining us on the show here and folks We’re going to take a quick break when we come back to the other side. I will be rejoined by your co host Erick simpson we will share some thoughts on the conversation. I just had with kevin here. Have a little fun wrap up the show stick around We are going to be right back.

Alright, welcome back to part three of this episode of the MSP Chat Podcast. And once again, thank you very much to Kevin Lancaster from Channel Program for that interesting conversation. Sorry you had to miss that. Erick, you road warrior you. You were on the road at a conference and I couldn’t connect at the specific time.

With Kevin, who was a very busy man, is available. But trust me. When I tell you it was a really interesting conversation about vendor, MSP relationships. And there were a lot of things that kind of jumped out at me and caught my attention during that. But one point in particular that I referenced very quickly in passing during the interview, Erick, was just this idea that emerged from everything Kevin was telling us about what they hear from MSPs.

MSPs. That suggests the, for vendors, the key to a strong MSP relationship is to treat that interaction as a relationship and not a transaction. Kevin was saying the number one thing that MSPs say on the channel a program platform, they appreciate about a vendor is having access to a channel account manager who knows something about them and their business.

Having that kind of personal direct connection. That really makes an MSP feel like they are in a partnership with a vendor and not just doing business with them not just part of a program Making money together is very important to the MSP, but they really want to be in a partnership And having that channel account manager is a great way maybe not an inexpensive way, but a great way for a vendor to establish that relationship.

And, quickly to that point about expensive, inexpensive. The other thing along those lines that Kevin said that was really interesting, he was painting this picture of a bell curve where he said very young vendors are a little bit too small sometimes to have those channel account managers.

And very big vendors get to be too big to have those direct kind of relationships with MSPs. There’s this kind of sweet spot in between where vendors get big enough to build an account management team. They established those personal relationships with MSPs. And I guess the challenge for those vendors as they get bigger and bigger is just, can you sustain that sense of partnership and connection, personal connection to your MSP partners,

Erick: Yeah, it’s really a shame that I had to miss that interview, Rich, as you mentioned.

I’m road wardering to an event. I’m still here at the event, which is why we’re recording part three, and I’m wearing a different shirt today than I was at the beginning of this episode, but I will say that is refreshing. To appreciate those of us that have come up through the ranks over the last 20 or so years guys like you and me, or it said, I’ve seen vendors come to the realization that MSPs want more of a relationship than just a transactional relationship.

They want to understand that who they’re working with under knows and understands their challenges and their vision and what they’re trying to accomplish, how they. Engage with their clients what their sales process looks like when they need help and when they don’t need help Don’t be jumping in over here, you know I’ll tag you in when I need you [01:05:00] help me with quoting and pricing and then helping them grow and build that trusted business partnering relationship where the relationship succeeds and celebrates success, but also analyzes, Lack of success together for improvement and you’re really working with you feel like a team doing that and I think rich today The majority of the vendors that have been at it a while understand msps much better And one thing that i’ve noticed i’m going to ask your opinion on this, you and I you know You’re working at channel master together and building that organization It’s interesting because the comment that kevin made about the smaller Vendors and then the larger vendors and that transition what I’m noticing is That there’s an opportunity for vendors as they get larger Not to lose that touch with the MSPs that the MSPs so desire and appreciate and we’ve seen this rich where vendors Now decide because they’re not growing their channel teams You They’re now looking at larger and larger MSPs as their target as their, next target audience and we’re seeing that shift of the account manager team focus up there.

And so these MSPs are missing that relationship, that love, because now they’re focusing them on these larger unicorn MSPs that you and I talk about from time to time. I would like to see them understand that is a different target audience should be a different account team. That is a different strategy for those folks to continue to focus the attention and the care on these growing MSPs that aren’t, the large unicorns yet, but appreciate that relationship rather than the MSPs over time, potentially feeling like, oh, they got too big for me.

I’ll go find my alternative that is still at that stage that really appreciates me, understands this is what I need now. What are your thoughts?

Rich: Now, I, I agree. I think we can both think of examples of companies, larger companies, growing vendors that have gotten that right and gotten that wrong.

And what happens on the getting it wrong side is they either shift to the larger MSPs or they shove a lot of the smaller MSPs into, distribution, cut off direct access to their own people and so on. And you can appreciate the logic of that. But I think a lot of the biggest success stories that we’ve seen in the MSP channel and in the last five, eight, 10 years have been companies that have understood that maintaining those relationships that got them to be big vendors in the first place is a really important thing.

And even if that feels like a strategy that doesn’t scale that is not necessarily trying to, the example that Was leaping the mind to me as you were talking there is Cinex before it became part of TD Cinex. And John Phillips who, who ran the, or runs the SMB business over there.

That, the thing that enabled him for years to produce really impressive very strong double digit growth year over year, was his realization very early on in that post that it was going to be all about a high touch personal relationship with partners. And Cinex is a very big company.

But they understood that if we make that investment, the, there will be a significant return on that investment. And there really was year over year. I saw it over there. It is some, for some companies, maybe a scary or counterintuitive thing to do. I think there’s a temptation to concentrate resources on, on a smaller number.

Of of more remunerative MSPs or partners, if you will. But I think we both agree that making the investment is actually a really important success ingredient for companies that take off with MSPs.

Erick: And we both know Rich that MSPs listen to other MSPs. We’ve seen where the MSP partner channel that a vendor has built.

Actually has helped them scale and grow because they’re saying such wonderful and positive things and bringing other MSPs into the mix And then we’ve also seen the opposite of that as well, right when MSPs feel like boy, this used to be a great organization and now We may not be feeling the same way and they are very vocal about it too.

So it’s a challenging formula to get right. I think.

Rich: All right. That books leaves us with time for just one last thing. And speaking of relationships, Erick. Hotels. com the website has relationships with a whole lot of hotels all over the world. They [01:10:00] recently went out to about 400 of their partner hotels and asked for answers to a whole bunch of interesting questions.

Mostly looking for fun stuff, anecdotes. One of the things they asked about is, What are the most interesting things guests at your hotel have left behind and that wound up in the Lost and Found? All sorts of interesting responses there. Somebody left behind their pet lizard. A happy ending to that story.

The owner of the lizard realized they’d left it behind in the room and went back and got it. Two hotels said that they had guests leave behind a full egg cast. It doesn’t seem like the kind of thing you might not realize you’ve left behind. So I’ve got to assume it’s somebody who just decided they don’t need this anymore and I’ll let housekeeping deal with it.

How about this? 10 percent of the hotels out of the 400 surveyed here said that somebody has left behind dentures in their room before. Again, Are those the spares? How do you not notice if you don’t have the dentures with you? And then last but not least Erick somebody at one of these hotels left behind a six million dollar watch no word from the story that i’m reading here, which is on expedia.

com by the way as to whether or not this person was reunited with their six million dollar watch. And there was another thing they asked people about, or hotels about, your most unusual room service request. And maybe it was the owner of the six million dollar watch who asked room service for an Evian filled bathtub so their child can bathe in only the purest of water.

Erick: Wow. Wow. Definitely. Probably a five star property that person was asking that request from, and potentially the person, if it is the same person that left behind their 6 million watch.

Rich: Maybe it was

Erick: a

Rich: tip, thanks for filling the tub with Evian for my kid. Here’s a 6 million watch.

Folks, that is all the time we’ve got for you this week on MSP chat. Erick and I are going to be back in next week’s another episode for you. Until then, I will just remind you, this is both an audio and a video podcast. So if you are watching us on YouTube, but you’re into audio podcasts, Go to wherever it is.

You get your audio podcast, look for MSP chat there. You’re probably going to find us if you are listening to us, but you’re curious to check the show out on a video, go to youtube. com and look for MSP chat. However, it is, you consume the show and find it, please subscribe rate review. It’s going to help other folks just like you discover and enjoy the show.

As you do this program is produced by the great Russ Johns. It is edited by the equally great. Riley Simpson. They are both part of the team with us here at Channel Mastered. They are ready, willing, and able to produce a podcast like this one for you. And that is only one of the many things we do for our clients at Channel Mastered to learn all about us and everything we do, go to www.

channelmastered. com. Channel Mastered has a sister organization called MSP Mastered. That is Erick working directly with MSPs to grow and optimize their business. And you can learn about that venture.

www. mspmastered. com. So once again, we thank you for joining us on the show. We’re going to see you in a week’s time. Until then, folks, please remember, you can’t spell channel without M S P.