Sunday, October 19, 2008

Making Money When Clients Want to Save

Now comes the hard part . . .

Everyone "knows" there are tough times ahead. The funny thing is, of course, that this is 98% attitude. Nevertheless, most people have a vague sense that there's a downturn and that they need to participate. So they'll be cutting back.

How do you make money when your clients are cutting back?

How do you get new clients at a time when budgets are tightening?

Let's brainstorm a few things.

First, Cut Your Clients' Costs. For example . . .

Many people (including some of my good friends) argue for ROI -- Return on Investment -- arguments during the sales process.

My experience in Sacramento is that ROI arguments are not very effective on small clients. "Yeah, yeah. Sounds good. I want to save money today."

They "get" that a green PC will save them some undefined, fuzzy amount of money over three years. But today you want to charge them $900.

Here's an idea:

Create your own green machine: We tend to leave computers on at night so that they can run through their defrag, checkdisk, and patch management routines. But this is the 21st Century!

Turn off those computers at night, but turn them on when you need to do maintenance. You can script this with Zenith, Kaseya, or the appliance from ITControlSuite. Totally automated. Machines are on when they should be and off the rest of the time.

We are working with a client now who has 70 desktops. We expect to save them about $3,000 per month in electricity. Really. Now that's based on business rate electricity in Sacramento. Your mileage may vary.

But you can do this with very little out of pocket expenses. And, of course, the labor is billable. You get a little extra work and the client gets a huge savings.

This is one where you can drag out their electrical bill, benchmark the usage, and check it for the next two months.

And there are other things we can do. Literally sell your services by saving money for the client.

This has the added advantage that you move into the business consulting role.

Second, Improve Their Cash Flow

I learned a great line from my friend Steve Luby:

Why doesn't every American own an elephant?

They've never been offered one for $99 down and easy monthly payments.


We all know that leasing or financing costs more in the long run. You know it. The client knows it. But it can really help out in a tight market because the low monthly payment is manageable.

If you haven't sold via Leasing or Financing before, don't worry -- it's easy.

Think about it. The money lenders know that time delays can lead to lost opportunities. So they process applications in very short order. In most cases, 1-2 hours. And, if the client is in a position to repay the debt, they get approved.

So it's simple and painless for you.

$5,000 worth of equipment and software? As of this writing, Microsoft will finance that for less than $175/month.

Make it easy. Mention it as an option. Even encourage them to get their own leasing deal.

You'll get paid up front for the hardware, software, and sometimes the labor. That's cash flow!

And, of course, there's Hardware as a Service. Whether you use MSP on Demand, or roll your own as we do, HaaS is a great way to get a hardware refresh into a company with a tight budget.

You roll in the hardware, the software, and the service. Check. Check. Check. All in one. Now they have a new machine with a three year warranty that just works trouble free. Client's happy. You're happy. And that revenue (and client) are guaranteed for three years.

Third, Outsource Their I.T..

Let's be honest. What business are we in? Outsourced I.T. At the end of the day, we provide services so that clients do not have to spend as much with an in-house technician.

With our managed service model, we believe we can save a client money over the cost of an in-house I.T. person until they get about 80 desktops. And that assumes they'll be hiring an expensive MCSE-type. If they hire an entry-level tech at about $40,000/year, we can save them money well into 120 desktops.

Real money. Real savings. Maybe not the first month [ :-) ], but real fast after that.

I'm sorry that some people will lose their jobs. But if there's a real economic downturn, then that's going to happen whether we get the work or someone else.

So now's the time to step up the game and be sure your business gets outsourced I.T. contracts that will become available in the next several months.

- - - - -

When you hear people say that small businesses are more flexible than big businesses, this is the kind of thing they mean. When the world zigs, we zag.

As the business environment changes, we need to take advantage of our flexibility to see opportunities and create opportunities.

The big businesses out there can't change directions very quickly. They're stuck in a mindset created as part of a master plan that was written 12 or 18 months ago.

You are NOT stuck doing exactly the same thing you've done for the last year. If you think you're stuck, the problem's all inside your head. You don't have to play last year's game. You don't have to sell last year's services. You don't have to get lost int he shuffle.

Make changes NOW that will set you business on a profitable track for the year ahead.

I welcome your ideas to save money for your clients.

:-)

3 comments:

  1. peace_country8:11 AM

    Karl,

    Would you have the values used to calculate the electricity savings?
    For example, cost of electricity, and consumption per pc per hour used?

    I should say this value is huge and we immediately are working on communicating the value of this service to our clients. I wanted to compare your findings with ours.

    ReplyDelete
  2. Rather than deal with it in a comment, please see the separate post here: http://smallbizthoughts.blogspot.com/2008/10/electrical-calculations-are-shocking.html.

    Thanks for asking!

    ReplyDelete
  3. Karl,

    Thanks for mentioning Kaseya. Our User Statement Management add-on does do an incredible job at saving people money through power management.

    Thanks again Karl!

    All the best,
    Chad - blog.kaseya.com

    ReplyDelete

Feedback Welcome

Please note, however, that spam will be deleted, as will abusive posts.

Disagreements welcome!