Fish in a Sandpit: Finding the Right People and Processes for Scalable Growth with Melissa Hockenberry

Welcome to MSP Mastery, the podcast for MSP owners and leaders who want to build a better MSP; one that actually works for them.

I’m Jeni Clift, joined by my husband and long-time business partner, Nick Clift. Together, we’ve spent decades building, scaling, and eventually exiting our own MSP business.

Over the years, we’ve seen firsthand that the MSPs who thrive are the ones willing to evolve. And right now, few shifts are more important than how we lead our people and the intentional decisions we make around operational discipline.

In this episode, we sit down with Melissa Hockenberry, an MSP industry veteran with over 20 years of experience, to unpack what it really takes to transition from a reactive "firefighting" culture to a proactive, system-driven business. Melissa shares her unique perspective on client retention and why understanding the "friction" in your team is the only true path to a scalable MSP.

Here’s what we covered together:
 ✅ Why "knee-jerk" reactions to problems are masking deeper systemic issues
 ✅ The "Fish in a Sandpit" analogy and why letting the wrong fit go is a gift
 ✅ Why standardisation is more important than ever in an era of rapid AI and M&A shifts
 ✅ How to identify if you have a "people problem" or actually a "process problem"
 ✅ Simple steps to experience your own business from the client’s perspective to find hidden friction

We created this podcast to share the real conversations and lessons we wish we’d had more of while running our own MSP; practical insights from people who understand the challenges, pressures, and opportunities in this industry.

Whether you are struggling with team performance, looking to improve client retention, or questioning why your current processes aren't scaling, this episode with Melissa offers a grounded and timely perspective on what leaders need to do now to build a business that is both profitable and fulfilling.

👉 Connect with Melissa on LinkedIn: Melissa Hockenberry
🌐 Learn more about From the Front to the AC: ftftac.com
🎧 Listen to other MSP Mastery Podcast episodes here: mspmastery.blog

Transcript

SPEAKER_00 0:00

If you ever need to let someone go, it is a gift. And that's not a bunch of BS. Because if they are not working in your environment, why would you keep a a fish in a sand pit?

SPEAKER_02 0:12

We deal with a hundred different businesses. We can't afford to have a hundred different ways of doing things. You deal with one of us. So how about you change your process?

SPEAKER_00 0:21

Here's the key thing. Don't knee-jerk about what you find out. So we'll bring something to the owner's attention. We're just gonna go fix it. I'm like, hold up. Wait, I'm guarantee you I'm gonna find some more.

SPEAKER_04 0:33

What are the biggest shifts you're seeing right now, particularly when it comes to client expectations and retention? Before we get started with today's conversation, I wanted to share a quick note regarding the audio. Unfortunately, we experienced some technical issues on Melissa's end during the recording, which resulted in some poor sound quality. Our wonderful team of editors at 7 Million Bikes have done their absolute best to clean this up for us, so please bear with the audio as you listen. The insights Melissa shares are far too valuable to miss, so we appreciate your patience with the recording quality. Welcome to MSP Mastery, the podcast for MSP owners and leaders who want to build a better MSP, one that actually works for them. I'm Jenny Clift, and alongside my longtime business and life partner Nick, we unpack what's really working in thriving MSPs, including insights from the trusted partners who support them. Between us, we've clocked up more than 60 years in the MSP industry, long enough to have tried all the shiny new tools and the latest game-changing SaaS product that promises the world. This is MSP Mastery. Here's Nick, myself, and today's special guest. Today we are joined by Melissa Hockenberry, a highly respected veteran of the MSP channel with over 20 years of experience. Starting from the very early days of Autotask, Melissa has seen the industry evolve firsthand through countless shifts, mergers, and acquisitions. She combines a deep marketing background with a focus on helping MSPs communicate their value and master the art of client retention. Having worked with hundreds of businesses over two decades, she has a unique ability to spot the patterns that separate thriving MSPs from those that struggle. We're particularly excited to tap into her insights on leadership and the intentional decisions that drive long-term growth. On a more personal note, after working together remotely on our autotask implementation, we first met in person in Miami back in 2010 and caught up across the US a few times since then, but it's a it's been a while since we've crossed paths. Melissa, welcome to MSP Mastery.

SPEAKER_00 3:14

Thank you so much. It's a delight to be here.

SPEAKER_02 3:17

Great to see you again, Melissa.

SPEAKER_00 3:19

Great to see you too. I can't believe it's been 16 years.

SPEAKER_04 3:23

It's crazy. Well, I think 2008 was when we actually implemented. So I think that was when we were first working together. But Nick, I think you went in 2009 to the US to the very first ACM.

SPEAKER_02 3:36

Nashville.

SPEAKER_00 3:37

Nashville, where I brought my daughter, who will be graduating in less than 15 weeks from high school.

SPEAKER_04 3:47

So as I'm an AOS implementer, I always ask the same questions at the start. Please share your personal and professional bests from the last six months.

SPEAKER_00 3:58

I had to think a little bit about this. I would say my I'll go with the professional first. The professional really was the fall kicked off with six business trips in eight weeks. It was an inauguration of getting to go be uh an MSP coach and MSP Summit and several peer groups that I facilitate. And I got to go to Jadocon, the last one. So that was really fun as an attendee. And then I wrapped it up with a I built a Google workspace training for a company called Bigger Brains. And so I did like an in-studio recording, which was very humbling. But I'd say professionally, that was really cool. I never thought when I took on this entrepreneurial gig that I'd really travel. So professionally, it was cool. I think you grow. I love to travel, and my very last flight home, I got the sweetest treat of a little boy who was on his very first flight, and he was about four. And it was so fun because he was sitting right in front of me and I got to just observe him and see the newness to him. And I I really I enjoy that aspect of travel, being always doing it by myself. So always having the opportunity to keep myself open to conversations and meeting new people that way. So that was fun professionally. Personally, I'm making it through my daughter's senior year. I don't think there's one thing with that. I have not lost my mind.

SPEAKER_03 5:15

Still talking to each other.

SPEAKER_00 5:17

Really? I said we have our we are we seem to find that battling on the holidays is the most progressive way for our relationship. So we had a Thanksgiving battle, a New Year's battle. I don't think we've battled since then. Our New Year's was very, very therapeutic. It's just coming up. It is, yes. Yes, resurrection of Christ and that the one more stone turned over for us as well. It's been professionally but the joy too is that we were able to celebrate my mom's 90th birthday. Snowstormed kept me from being there, but she's the first in her family line to make it that far, and she had a lot of things against her. She was it's very fun that she's still around and kicking and having a chance to enjoy her as well. So those are many. I didn't do just one, I think and put a bunch together.

SPEAKER_04 6:02

We last year took our housekeeper, Anna, to Thailand for her first ever flight. And she's 34. Wow. Uh yeah. First flight, first staying in a hotel, first lots of firsts. So imagine the four-year-old in a 34-year-old. We were walking through the airport with her here in Bali, and Nick pointed as we got towards our gate and said, See that plane there with the Thai airways? That's our plane. And she looked at it, and then she looked at me and then burst into tears. So I was literally standing in the airport with my arms around her, patting on the back, thinking, Is she terrified? Is she excited? Like, is she coming?

SPEAKER_00 6:46

Or is she just gonna turn around and go home? She made it to the airport. She was she's she staying.

SPEAKER_02 6:53

Yeah, she was a good good traveler. Good traveler.

SPEAKER_00 6:55

Yeah, yeah.

SPEAKER_04 6:56

So yeah, so it wasn't.

SPEAKER_00 6:58

So fun to experience people's verse like that. It's yeah, it's a creating.

SPEAKER_04 7:02

Okay, so tell us a bit about you. You've touched a little bit on your sort of your daughter and whatnot, but how you know, how did you start in the MSP industry to where you are now?

SPEAKER_00 7:14

I would say that if I could talk to my like 20 self coming out of college, she would never believe that she is gonna spend 20 years in the technology industry. My undergraduate was in marketing. I came out and became a retailer, and then I became a recovering retailer. I've spent since I was 15, I've been in client-facing roles. So when I came into the MSP industry, it was the first product support rep, dedicated product support rep for the autotask product. That was crazy to think that there had been nobody dedicated on the support line to it. And then I grew up with Autotask for 18 and a half years. So I always say it was my Autotask Dado Kaseya time. But every people it is amazing, I think, to stay anywhere, especially a tech company. I'm like, people are like, how the heck did you do that? I said, well, eight every two years I had a new job, and eight of those about 10 years or 10 jobs are brand new to the company. So working in retention often with client success managers, I facilitate a peer group for that. I understand being the first person to do something because I did it eight times over. So I came into Autotask as the first product support rep and became the product support manager. I ended up being the first person to get promoted and the first person move remotely. So I was the first remote worker at work, and then I took on implementation and then client experience, and then actually lost my job. Lots of people don't know that. They cut my job and gave me the option of a severance or going back to being support when I had been eight years earlier. And I live in the middle of nowhere, so the job market is not extreme unless you're really good at agriculture. It's like, all right, I'll hang in there, I'll find something. And they really when I think my career truly launched, because I landed about six months later, like a friend took me under their wing and said, we're gonna find a spot like that really fits you. And I became the training program manager. And then I that's how most people would remember was, Oh, you did my training, right? Well, like you guys get the implementation side, but a lot of people didn't get because that was only about two years that I did implementation. But then training and community were the last decade of my time there, and it was the best. Everything I did, but I really think having been in support also makes me better at working with MSPs because I remember the direct lines and things. And so when I work with a support person, I'm like, I get it. Like I first I've been in frontline retail, which is just as bad, and they're right in front of you. You're dealing with the general public and they're right there. You can't even make faces. So it allows me to have really grown up through, and both of the companies I've spent any kind of time with, JC Penny was the retailer I worked for. I started with them and at 18 and I started as a frontline employee. So I don't know how I commend anybody that can do leadership and management without being in that frontline because that has been so to me for giving me better insight, being a better leader, being a better, more understanding individual.

SPEAKER_02 10:29

I think that's a really good point because you think about the successful MSPs out there, and there's not too many of them that went to university, got a degree, and started at an MSP. They all started somewhere in support. And because you you need to learn how to deal with people and how to solve problems, and there must be an innate passion inside of you to solve problems and help people. Like it's a it's a built-in human nature, it's a one of our core needs that we need to be helping help. And I think, yeah, anyone that thinks that they can go and run a successful business in a support industry without experiencing it yourself. And one of the things I do coaching businesses now, I I say, When was the last time you ordered something off yourself? And these owners look at me and go, What are you talking about? I said, I'm gonna order something from your company and I'll give you some feedback on how the process works. Oh, I know how it works. I designed, I said, Yeah, you designed it seven years ago. Do you know what actually happens now? So this is this process of going through and we put it in place and we set and forget. And I was definitely a guilty party in that in that camp for years and years and years, and now because of our journey with EOS and you know implementing it ourselves and helping lots of clients, every quarter you've got to go back and review some part of your business, and really annually you need to be looking at all the core functions and saying, is it still delivering what I want to? So yeah, I agree. Experience to start it off is is very, very important.

SPEAKER_00 11:55

100%. I talk about a concept called swim goggles because I'm a 10-year swim parent and I don't like the idea of lens, people lens it with customer lens. I'm like, a lens you just put on and there's no body associated with it. If you've ever swam competitive with good goggles, there's pain associated with them. They have to be tight, right? They have to be suctioned so that an hour after practice you still have the suction marks on your eyes. But I like the concept of a goggle because when you put on your client goggles, you are tightening them up because the water's gonna get mucky and murky around the changes that happen in your client's business. So the suction has a purpose. And yeah, it's gonna be uncomfortable, but it also keeps up the, but we've always done it this way, or we don't want to do it that way. Or so it keeps clarity in what you're doing. But I think what you talked about, Nick, like that's exactly what you did. You put on the client goggles, right? Like you you said, how easy is it to work with us and what is do I have a feeling of trust? Because the goggles build from a feeling of trust and ease. So yeah, it's critical for people to do.

SPEAKER_04 13:00

No, I wanted to just come back to what you said about having the option to take a severance or step into a different role. I know that's something that we did really well in our business. We had a number of people step into a team leader or a management role. And because we were running under EOS and did that review every 90 days, three months or six months later, they'd say, This is definitely not my gig. And we had a safe place where as a business where people could step back into their old role, and there was never any, well, you know, if you don't like it, you'll have to leave. Or they felt that that was the next sort of path. They'd just step back into their old role or a different role, and somebody else had that, I guess, security and comfort that they could try it as well. And others, you know, that they might, you know, a year later say, I think I'm a bit more mature, I have better skills now, I can do that again. And it's unusual because most businesses you step into leadership or a team leader, and if it doesn't work out, you're gone. You either leave or you're terminated.

SPEAKER_00 14:08

Yes, it's and we know what you said there. I'm sitting there, or I'm my brain going, Do you understand how astonishing it is that you could do that? Because, first of all, how many MSPs are running at any kind of profit margin that they can afford to let someone step backwards and possibly be a little overstaffed in that position and probably hired someone to replace them, right? That's a really well-run organization when you can say, no, no, no, and and the graciousness of that is astonishing to me. I absolutely love that. You were able to do that. Because you're you're right. I made it work. Like I would consistently just figure it out. And the good thing is that I got a lot of comfort in, like I said, eight out of the ten times nobody did it before. Yes, that's hard, but also nobody has a precedent for how they're expecting it to be done. I find that exciting. That'd be my jam. Like, you know, let me add it. I kept doing it right because I loved it. Because I'm one of those people that if I were a salesperson, I'd leave before I get my own numbers. Cause I'm like, I can do that well once. I don't know about after like 20 years. So I I love creating new. And I think that's why I love what I'm doing now, because I get to go take a fresh look at an MS operation. And specific from a client perspective, you guys know because we had to delay this, that I needed new internet.

SPEAKER_04 15:25

You definitely needed new internet. I saw the before and afters.

SPEAKER_00 15:29

I don't even think you can call the before a speed chest. That's like an erroneous, it's like an oxymoron. When I dealt with this client this company, it is just horrific. I literally the other day was trying to cancel something, and I'm canceling for a church and just trying to get things taken care of. And I said to the people list that I've been in your shoes, I'm not complaining to you. I'm complaining to go on record in hopes that one of your executives hears that your disparate systems are painful to your clients, and this is a ridiculous predicament I'm in. You don't have to say anything. I you don't have to apologize. It's not you. But I know this is being recorded, and they need to hear this.

SPEAKER_01 16:04

Just uh it's so fun.

SPEAKER_04 16:10

You've watched the MSP industry evolve for more than two decades. What are the biggest shifts you're seeing right now, particularly when it comes to client expectations and retention?

SPEAKER_00 16:23

They're not going to be ones that you want to hear, but they're the valid ones, right? They're the ones everybody speaks of. But as I reflect on this, I think the one thing is client expectations and they've grown exponentially because fear has grown exponentially. So I think now we've got it's not if we talked two or three years ago, it would have been cyber, right? Now it's AI. It's what is AI doing? What is AI not doing? I have a brother who's a chiropractor who called me last year and said I just sat in on a conference, they were talking all AI. Do you think I can retire before this crap hits? No. No, sorry, you're too late.

SPEAKER_02 17:04

That's one strategy. It's probably not a good one, but you know.

SPEAKER_00 17:08

And I loved it. I think clients expecting you to be able to tell them like how they stay safe, how they use it smart, how they and I, in my opinion, AI has just catapulted into the public arena faster than any other new technology that I've ever seen in 20 years. If you looked at like MFA or something of that, you're people were talking about it for years before it hit that end user, right? This stuff has just jumped over the wall into the public arena with frightening speed, actually, because I think that's what's scaring everybody. Is that like I don't I don't know that I figured this out for my own company, how can I advise them on it? But what I think the good is what AI and side AI comes down to is comes is all ultimately it's an educational issue. You don't need to get in front of, you don't need to know which you need to just reassure your clients that, hey, guess what? We just need to educate your people because they're still the biggest threat. Your people, not your that if you put something into that AI engine, hey, it's free, it's now out on the internet, it's now building other AI agents. You just put up it's that simple. That's the simple starting point, is Linpool. Educate on what not to do. Let's just tell you. I can't tell you the number of people that I've said using it just in in when friendly conversation. Not, I'm not, I don't propose to be a technologist, but just trying to educate friends and family. And they're like, oh, I was doing this. And I was like, are you paying for that version of Chat GPT? No, I'm not okay. Make sure you know and what it's doing. And so just basic education. I think those shifts of VAI, I think the other thing is you always have to talk about mergers and acquisitions because when you retention, I'm hearing a lot of people say, I really lost clients to anything other than a merger or acquisition or something of that sort, or then I'll hear, or they went out of business, or we just didn't really fit them. So I I think people not owning their true retention issue is also a shift. I've heard the industry hasn't felt issues in retention. I'll tell you honestly, I started about it in the summer of 24. And when I would say to people, this is where I think I need to focus, because this is where I think there's going to be more of a hit in the years to come. And I would say you only have two options. I'm delusional or I'm visionary. You can pick which one you want to say. And most really experienced MSP. I'm really blessed to have good friends that are really good MSP owners, right? They've just done it well, they've grown well, they've been successful, they're successful both in balance of life as well as business, because that's important to me. That's actually true success. And they said, No, you're right, they don't know it yet, but retention is going to be an issue. And fast forward one year, I sat down at a peer group and the two most mature MSPs, I said, What are we talking about over the next two days? And they said client retention. And I was like, Whoa, that didn't take long. Like everybody, it's quickly happening. And if it's not, if you're not seeing it, it doesn't mean the rumblings aren't there. Like the rumblings are there already. Your clients are being approached by the mega MSPs for$35 a seat, or you're growing and you're not realizing it, and you don't know the last time you were out to that tier to that location. It feels like just yesterday, but hey, actually, it was six quarters ago. And it's all those kind of things that I think the speed of everything is becoming a bigger issue. But I'd say AI and the merger acquisition is what is need to step up on the retention side of things.

SPEAKER_02 20:40

Yeah, and I've I've seen that in in our clients, my clients as well that I work with there. A lot of their loss of their direct clients is through a merger and acquisition in the client base. For example, you're looking after accounting firms, and there's a VC out there buying up accounting firms, and you know, of course, when they do that, they've want to do the shared services model, so they've got their in-house team that do all this stuff. So, how would you advise an MSP who's in that situation? Because I I see it as an opportunity to go after the bigger group as a client rather than losing my client. But a lot of people get the have fear the other way. They go, Oh, but you know, these guys have been acquired, so that means the other company must be bigger and better. And how am I ever gonna you know level up to them versus having the attitude, well, hang on, we do an awesome job. Our client loves us, we've been invited, we've got a hot seat into the new organization. How do I prepare?

SPEAKER_04 21:37

And often we can we can see how bad their internal team is by them undoing a lot of the security measures that we've had in place of passwords. Oh no, you don't need passwords. Pardon?

SPEAKER_00 21:51

I love your approach to it, Nick, because that's how I usually will coach someone to say don't throw your hands up and say, Oh, the bullies in the schoolyard, I'm out. You don't know. And I continue to say that if you're doing intentional retention, which is really how I try to classify it, your client, A, you should know, believe it or not, you should know that that might be coming down the road. I know that they're under and they're things like that. But there are things and clues that they can still give that give you a little bit of a heads up. And and B, yeah, why why not ask for a seat at the table just to say, hey, listen, I want to make sure the transition is smooth if that's the route you're gonna go, but it's gonna work best if I'm at the table. Can I sit down and be in this conversation? A, because you can show what you know to a group that's acquiring a whole bunch of people you are with a no. Who's so to say that they're not gonna say, what? We have been finding on these acquisitions that we're not evaluating the technology well. Could we get you on retainer to actually start to evaluate the firms that we're looking at for technology and see what does it look like? Could we get you on retainer to help us give some of these sorts of I think you shouldn't throw up your hands now. If it's if you're not doing well enough, okay, that's a sheer out sign. If you don't think they love you enough to put you at the table, then you've got bigger problems because they're not the only one that feels that way about you. So you've gotta, you've got it, maybe it is right to maybe it is right to pack up your stuff, go home and figure out how you get your house in order. Right. But if you know you're good and you know your client was gonna put you at the table, it's the conversations that you have leading up to that. It's how deeply you get into their business that indicates whether you're gonna get a chance to stick around. But yeah, I think too many people throw up their hands and say, even the people I even go so far, and I'm sure there are people that are gonna go, she's crazy. And that's okay, because my family thinks so too. But if your client goes out of business and you want to just wash that and say, I couldn't do anything, I want to say, if you having a strategic business review conversation, are you gonna tell me that you didn't think to say, Where are you? Wait, your budget's been slipping. Is there something I can help you with? You know what? I I know a great consultant who works in your industry. Could I do an introduction? Because you know, you got a lot of people here and I want to see you end up in the right place. No, you can't own all of that because it's still that person. But if you are not having those conversations, if you're blown out of the water by the fact that they went out of business, you weren't sitting and if you're not sitting at the table, that's on you, right? I was just sitting on course the other day with Mark Ignatio and I I love him, I always enjoy his webinars, but he was talking about you should be connect making connections for your clients too, outside of the work you do, connecting them with other people. And I think that same thing. Like if they're struggling, if they're connect them with a coach that they know, connect them with an EOS implementer or whatever. Make that connection for them and don't just look at yourself as just the technology person.

SPEAKER_02 24:49

Yeah, I I agree 100% because it's kind of a theme I've always had is how do we help you help your clients' clients?

unknown 24:58

Right.

SPEAKER_02 24:58

So you're the MSP, you have clients, you need to be adding value to your your clients' clients. Pay it forward, and exactly what you're saying, it's not just about technology, it's about we've got to be in the business mindset, we've got to be uh understanding what's going on in your client's business, in your client's industry. And then introduce and be that center of influence, be that kind of trusted advisor, not only for IT, because basically you can get anything fixed in IT. Like it's not an issue. Fixing a problem is not an issue, it's about how to help people run better businesses, leveraging technology and being ahead of ahead of the game kind of thing. Yeah, it's interesting, and I I I mean I'm going off Jenny's script here, but there's another question that popped into my head, and I this is a real challenge that I've I've had myself, and I know a lot of people have it. You've got a client, you've had them for a while, you know they're not a good client, you know they're not ever gonna pay your new for your new service that you need to do to maintain your credibility in the industry. So they're on a legacy five-year-old plan, you're too scared to have the conversation with them because they might or not want to, or you, or you know they haven't got the money, and it's you you're in this constant battle, like they're not really a great client, they don't fit our place where we're going, they're not coming on the journey, but I'm too scared to lose them, or I'm too scared to upset them. How do you handle that? How do we help our MSP listeners out there deal with those? Because everyone's got one or two of these. It really holds you back because you've got this kind of obligation to this old legacy deal you did five or six years ago for a cousin's uncle's mother's brother or something. And you just don't want to let go of it, don't let somebody down, but or let another MSP step in and take your client. Yeah, I don't know. It's it's a challenge.

SPEAKER_00 26:47

It's a great situation, and because so many people it's like any relationship that is not healthy, right? We don't we have to remember. I think one of the best advice I got was from working for JCPenney, getting Fortune 500 company training, because they used to be that back then, and having someone say to me, if you ever need to let someone go, it is a gift, and that's not a bunch of BS. Because if they are not working in your environment, why would you keep a fish in a sand pit? He's not gonna succeed in the sand pit, right? So it's like you've gotta get you've gotta get those people out. I I think you it takes the time to sit and think about all the different ways that client could be adversely affecting. Because chances are your team knows that, right? They might not know the profit or not profit, but they're gonna know somewhat legacy because they might they learn more than you you think in times. And so I think, first of all, I do think you need to start to consider what is the impact of it. When I worked for Auto Task, at one point I was the customer retention manager. That was actually my title. Until we had it coincidentally, we had the first Autotask Community Live, and our marketing director said, Melissa, you need a different title. No one's gonna want to talk to you with that title. Can we just make up something else?

SPEAKER_02 28:04

It's probably right.

SPEAKER_00 28:06

Oh, it's it comes running hard. I was like, you know what? Essentially, what I'm doing is customer experience. So I think I became like the client experience director. Like I was like, I just throw a director in there. Those are the days before the director didn't have to have 17 different levels to it. But anyway, I didn't every single client that wanted to leave us with autotest for two solid years. I called it the time in which I was chasing the hearse. It was such good knowledge. And so to that MSP that is in that situation, I would say to them, first of all, go back and look at the rest of your base and make sure you're solid in that and that that you're looking at your client concentration. Obviously, whether you're selling your business or not, that's something to consider. Like how much money do we have in one basket, right? This becomes inexplicably more difficult when you're talking about 15% of your revenue. Then you legitimately have to say, okay, how do we deal with this for a while? But how do we consistently build up right the other part of the business? How do we keep making the other and not putting all the profit expectation on that? But how do we continue to do well with the people we're doing well and then continue to lessen and lessen this arrangement to the point in which then we can have a real conversation that like, and it has to be an honest conversation. We don't fit you and you don't fit us. And technology is too important for us not to get you with somebody who fits you well, right? Who fits what your budget looks like, who fits how you want to approach like we just don't fit each other. I think that conversation can go a lot easier when first you wonder what is this gonna look like if they do walk away. And I have to be ready for that. But also knowing full confidence that when you get out of those, this is such a strong word, but sometimes they really are. When you get out of those really negative environments, how much more is your team gonna thrive? How much more are your if you are working with that client on a regular basis? That's maybe not even on support, maybe they are like client experience or success, they're gonna feel better because they're like, I'm tired, I don't have to listen to the moaning anymore. Like the energy that gets put back in the organization, beneficial. And I think the other thing is let your team know the plan. Not like specifics of this is the day we're gonna do it, but like guys were working to find to find them a better provider. But in the interim, this is how we have to work with them to let them in on the fact that we know they don't fit us. That doesn't need to be something that's for my job for me to tell, but let you know, continue to do well by them. Because the thing is, at we even at acquisition I didn't mention, but we forget that there are humans working in that business. And if we're treating them well, those humans might go somewhere else and they might just pull our name with them, right? We forget how powerful the referral can be, even in an acquisition where it's okay, if they're acquired, some of our staff could leave. Does their staff love you? Are they all gonna go to different firms? Are they all gonna mention how great you were? Like always end on the high note, but have that honest conversation before you know what the impact of the revenue is. And if you need to take a little time to get a little less concentration of revenue away from that and build up the other side, then you do that because yes, you have to be responsible, you need to make payroll, you need to, but have a plan. Have a plan, draw a line in the sand and say, by this point, we're gonna have a conversation and have an honest conversation of how our model doesn't fit you.

SPEAKER_04 31:27

We had a term for that. It was we would set people or clients free to find an alternative path to success.

SPEAKER_00 31:35

I love it. That is so diplomatic. Wow, all of that, really pretty. All that very nice.

SPEAKER_02 31:42

And it is really interesting, isn't it? Because the the stress of a a not ideally matched client, let's say, you're giving the power away because there's a chance they're just gonna call you up one day and say, Oh, we're done. And and if you be proactive about it and you plan for them to leave, even if it happens quicker than you think, at least you've got a plan. Like I I lost a couple of good clients due 100% to my fault of of that idea, uh that what you mentioned earlier, Melissa, about oh yeah, I saw those last month. No, no, no, it was 18 months ago. And when I finally caught up with them and said, What happened? She goes, Well, you just stopped talking to us, and they go, But everything was running fine, like we were getting the tickets, yeah. But you stopped talking to us. Yes. That was a big whack around the head for me. And it was nothing to do with our quality of service, it was nothing to do with our technology, it was all to do. I was the account manager and I got busy doing other things because everything was sweet over there and it was not sweet. So, yes, yes, yes, make sure you at least every six months have a good conversation with the owner of the your clients.

SPEAKER_00 32:46

A hundred percent. Yeah, that and that's a very basic start to good retention, right? Yeah, yes.

SPEAKER_04 32:56

If you had to point to one or two habits or behaviors that consistently drive strong client retention in MSPs, what would they be?

SPEAKER_00 33:06

Nick just gave a really good example right there, okay? Because humility is not popular, but it's really important. Like you own that. Like you didn't beat around the bush with we lost these clients and it was all on me. And that's why you've run successful businesses. The best MSP owners, like somebody's asked me once a similar question, like Melissa, what is the difference between really good MSPs and not, or ones that just aren't enough I said the difference is often the humility of the leadership. Like, A, are they humble? And the second characteristic I would give, are they curious? You talked about being a problem solver. That kind of comes at the core of curiosity. But humility is so so key because if you think you know everything, you're wrong, because there are humans involved in this process. And when you can say it's on me, guys, even if it wasn't all on you, it's I'm the one at the home, and so I'm gonna own this. And now we need to go back and fix where it is. That's not to hold people, not to say you don't hold people accountable, but you hold yourself accountable for being the one who controls the temperature and the culture of your organization. And I think one is curiosity. Yeah, just always feeling like you can learn a little bit more and being truly curious. This also came from Nick's answer, but it's to truly how you feel about this. Being truly curious about your client's business. Look to learn as much as you can. Now, being in a vertical, that's really cool because that makes it much easier because you can go deep and start to learn so much more. And I do love a vertical, I love a good vertical. That said, when a vertical starts to go south because of you finding government changes or what a vertical starts to go south because of mergers COVID mergers and acquisitions, like you have to have some other, you have to know if you're gonna go with a vertical, be able to peel the layers off of why you work with that vertical. Not we work with them all because we know them. No, what are the tangible ways that you connect with those clients? Is it because they're people hungry for education and you have a strong educational focus to your service, or is it because they're absolutely need you at the most peak periods of time and you have really how I'm really able to be wicked responsive when the client needs you, like understanding their cycle. Get to that point because then you can find parallel markets more easily. You can't just go, we just know them, that's why it works. Now get do some research on certain why does it work? Why does you know them? But I think there's the big I think it's it's in leadership, it's in the that humility of I don't know everything, I'm gonna own when I get it wrong. And that creates a beautiful culture of like you two obviously created it because you gave people that opportunity, that safe space to go, hey, this job isn't for me. That's it. Work really needs to be that. And I've never a dictator-like leader who ends up with a the organization. It just has never just never happened because good people leave that. They know they can find better spaces. And the people I talk, there's client retention, there's two. There's internal clients, and that's why I like to just talk at client retention, right? You've got to keep your internal clients, your employees. You've got to be connected to them and understand them and how they work. And you've got to get rid of the ones that don't work, right? So that you have even a hope. Set them free should be. Yes, you said that so beautifully. Dave, there's no hope of be having good external client retention if you haven't figured out how to do internal client retention.

SPEAKER_04 36:40

And that we found that a couple of times where we sacked clients because they were not a good fit. And the change in our team when we did that, when we actually said you know, did what we said we would do, which was if a client was not treating our staff well, was just you know, that complete misfit. And we acted on that. Just that change in our team was incredible of wow, they actually did that. And one was a council, so like local government was a big client, but we had various conversations with management and nothing changed. So we just said, Okay, you have X amount of time, we'll transition you off to a new provider, but we're done.

SPEAKER_00 37:25

So much power and your team, I'm sure, gave you 110% beyond that, right? Like the energy they got from that, like because you fear because you're gosh, look at what we're gonna lose, look at the Roman. Don't ever, don't ever don't you will figure it out because you just gave your team the reason to believe that you are truly the only in the sense of watching each other's back, and they will they will up their game to a new level when you do that kind of thing, definitely.

SPEAKER_04 37:52

Melissa, from everything you've seen working with MSPs over the years, what is one shift in thinking or behavior you believe makes the biggest difference to client retention? And that could be internal, as you said, or or external client for MSP owners.

SPEAKER_00 38:09

I think really understanding that you don't understand when your clients see you. And this it Nick, you've gave given me great examples, right? Where you talked about, hey, have you experienced that process? So taking if you had to take one actual step, and it's funny, I could actually show you. I had this in my notes, I just didn't augment this to Nick's thought and story, but actually taking the time to say, I'm gonna go experience what it's like to order a laptop from us, or to, or I'm gonna ask someone, mystery shoppers, something retailers have been doing for decades, right? Literally ask a friend to be like, hey, can you call us and ask this for a quote on something? Can you do and have a couple different people do that and get that feel because that's the start of understanding what the experience really is all about. And it's a really simple step to take. A, because all you have to do is ask a couple friends and then tell them, can you just take good note just and then tell me what your favorite restaurant is and I'll send you a gift card or whatever for your time. You know, it it is not something that you, as the owner, have to put one more thing on your plate. Think of three people right now that you can contact that have nothing to do with your business that don't know any employees. Ask them if they would just take good notes, give them the specific thing they're supposed to call and ask about, and have them record. Have them record it on the put up personal speaker and say, Hey, can you record it on your phone? I don't know if that's legal in all countries, but point is if you're for internal education material, I think anybody is good with that. Well, educational purposes only. Exactly. We shall not, we shall not republish it.

SPEAKER_02 39:44

Even simple, like just ring your own help desk number and see what happens. Especially after hours, especially after hours. Because we have this expectation and it's all set up the wonderful way, and then you go test it and it just rings out, and you go, what the hang on, hello?

SPEAKER_04 40:01

Or get a con get a uh a managed services contract. We did this recently with one of our coaching clients, and it didn't work anything like the owner's expectation.

SPEAKER_00 40:14

Nothing. And here's the key thing: don't knee-jerk about what you find out. Okay, so not a knee-jerk reaction, right? That's what I so feed. But I see so many MSPs, I will bring something to the owner's attention. We're just gonna go fix it. I'm like, hold up, wait, I'm guaranteeing I'm gonna find some more. B, let's present this with the best possible thought. Let's go find out why the team can't execute it the way you thought they were. Not being an accusatory, let's go figure out what the obstacles are. It's not about let's go fix this. It's about let's go figure out why they can't execute it. That why might be they're gosh darn lazy. Then you'll deal with that. But a lot of times that is we can't because the template we used to have for that no longer comes up when I start a new ticket. And so I just put it in underneath this, or I can't figure it out because you changed up the issue, submit, whatever. There's usually legitimate reasons. People do want to do their job well. They really do. It's how much friction is there in them to achieve it. And these little exercises of trying to look on the outside and say, what does this look like? gives you perspective for your client and then your internal client as well, gives you a chance to understand what are they going through? Because really all about trust and ease. When I talk about the client goggles, it's all about trust and ease. Can they trust you? And is it easy to work with you? And when you build those, then you get a good understanding of what your client is feeling. But those are little simple, actionable steps they could take to start to get a better idea.

SPEAKER_04 41:52

I like that word friction because I often say this that I believe most people go to work every day and want to do the right thing. There are a few that actively go thinking, how can I screw up somebody's world today? But they're few and far between. And it is for us finding that friction and lining that out and and removing those because success to me in any business is making it easy for your clients to work with you, for your team to know the right thing to do. So I actually like that word friction. If we can find all of those friction points and just work towards actively and intentionally work towards getting rid of that friction, as you said, not going in and you know, jumping to action, chopping somebody's head off, whatever it may be. But it is, it's finding those points of friction and and just working through those.

SPEAKER_00 42:53

And I think it's making an intentional measure. And the thing that I'm always amazed about is MSPs, your the very definition of your business is about recurring revenue. And yet, how many people have any one person on their staff that is focused on maintaining that revenue? That's I think the thing I've noticed the most and most reconnected with you guys, right?

SPEAKER_02 43:16

Like that is my hot button. Like every MSP I go into, I said, who is accountable for the managed service contract retention and profitability? And there's fingers going everywhere. Oh, the guy who sold it, no, that's the owner, that's the service delivery manager, no, no, no, that's that's the finance admin person's job. Hang on a second. A senior person needs to actually own that relationship and be accountable for the contract itself, making sure it's profitable, meeting the client expectations, and that our customer satisfaction or MPS is high enough that they're gonna renew. But it's amazing how many people just I don't know, I I sold it on free. Um I I don't I don't care. I just do the tickets. I don't look at that stuff. And oh, SLAs are fantastic. Look at these reports. If it the customer's not happy, uh so yeah, it's interesting. But I have to say it's a worldwide problem.

SPEAKER_00 44:10

100%. I love that you say senior person because my big thing is when somebody says to me, How do I fix this? I'm like, here's how I start to work with people on what I call intentional retention. And one of those steps is making sure that the person who's in charge of maintaining, and again, it's everybody's job to retain the client. Let's just be clear about that. But the person who's focused on it, they need a seat at the decision-making table. And that person who's focused on it might just be a client success manager, right? They might be someone making small money, but they need to sit at that table and you need to listen to them, right? Because they are, if they're doing their job well, A, they're not going to look like most people in your company. They're going to be the person who loves people. They're just not a ton of people sitting around in a technology company. They're like, I love people. I could work with people all day long. But that's the client success person. They should be the person who's, I really love people and I love making people happy and I love removing the friction and making it easier. I love so they're going to look different and they're going to slow your decision-making process down. They are. They'll get the hang of it, they'll get better at it, but you've got to let them sit at the table because they've got a wealth of knowledge on things you've lost touch with as an owner of a growing MSP. That's their job to step back in and be that hat you wore when you were the one who went on site every single time and you knew everybody's dog's name and their kid's name. And I find owners never replace. They get an operations person, they become the sole salesperson, and they never get the person who's focusing on the revon is under contract. And for so many people now, month-to-month contract, right? Because people are not gonna too many people in the or this one I'm hearing a lot in the lot is hey, we have a month-to-month, right? So you you need somebody there guaranteeing that you're looking out for the best interests, educating, having the conversations that people feel that they were seeing.

SPEAKER_02 45:58

That customer success role is not always about the customer being doing the wrong thing or us doing the wrong thing. It's about making it a mutual beneficial relationship. And a lot of our success came from ensuring that the customer knew how to do business with us the easy way. Their processes are different to our processes. So let's sit together and work out how we can make this. You know, we you look at it from our perspective, we deal with a hundred different businesses. We can't afford to have a hundred different ways of doing things. You deal with one of us. So how about you change your process? We'll help you with it. We'll even work with your staff and we'll build the documentation, we'll teach them. It's gonna be much easier for us to teach your guys to change one of their habits than it is to have us have a hundred different habits. And you have that proper conversation, they go, Oh, yeah, that makes sense. But sometimes it's the other way, you know. Yeah, we've got this very detailed HR process of recruiting some of our government clients, and we can't change that. Ah, fair enough. So we have to write some custom stuff at our end. But it's the understanding, mutual understanding, and it's a mutually benefit. And sometimes you might start on a$5,000 a month contract, and by the time you've done this a few times, you're all of a sudden you're on a$15,000 a month agreement because you're adding all these extra services custom to that client because that's what they need, and they want you to do it and they want to pay for it. So why not?

SPEAKER_00 47:21

Yeah, bonus. I think you spoke there about its expectation setting, and a lot of people are like, how do I do this better? And it was funny, when I started my YouTube channel along several years ago, I couldn't believe how much I talked about documentation and expectations. I'm like, you swear these are my only two tools, but expectations it's so key. It's setting it up front, and they're like, well, this is messy and we can't do it differently. Okay, tell them the why. People can understand the why. Give them a chance to have the why behind it. And like you said, with your example, a lot of times they're gonna be it's gonna be very reasonable about it. Oh, yeah, we have quirky stuff like that. Not a problem, we can do that for you. But give, don't be cursory about it and don't assume they're not smart enough to get it. And don't push forward without setting the expectation a lot. A lot of escalations I've dealt with in my client facing role roles could have been definitely helped by just a little tiny bit of expectation setting that would have never had to happen if we had just set some expectations.

SPEAKER_04 48:24

Melissa, but there's so much more here to explore with you. But thank you. Thanks for your time. Um, I know it's been a bit of a journey with you getting internet and time difference and everything, but we really do appreciate it.

SPEAKER_00 48:37

Now, thank you so much for the opportunity. It's been delightful to speak with you, and I I'd love to be back.

SPEAKER_02 48:42

I got about another thousand questions.

SPEAKER_04 48:44

And I think I got to ask two of my five that we'd actually set for a script, which as always we go completely off script. But hey, just really enjoyed chatting with you.

SPEAKER_00 48:54

Thank you so much. Thanks for the opportunity.

SPEAKER_04 49:01

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