At what point in an MSP’s operational maturity is it time to tool up around projects?

Consultant, Melissa Hockenberry, coaches MSP leaders on client retention. Preventing moments when your team is too “in the weeds” to deliver what you promised is key to this. How can better project management help? 

Running an MSP means constantly balancing tools and staff on a scale against the work in the pipeline. If your main business is managed services, the tools and teams you need to run projects tend to get postponed until that perfect future moment when they will become important.  

The problem with this strategy, though, according to Melissa Hockenberry, founder of First Things First Training and Consulting with 20+ years of experience working with MSPs, is that client onboarding is a project. And onboarding happens immediately. “The instant MSPs get new clients,” she says, “They have onboarding projects. It is the very next thing you do after you sign a client.” 

Hockenberry often finds that when MSPs come to her seeking help with customer relationships and retention, digging into the problems they are having now leads right back to onboarding. It is the first impression you make with a new client. If something goes awry – and it often does – you will always have to work harder to repair that relationship because a bad first impression is nearly impossible to overcome. 

From new client to underwater in seconds

Hockenberry’s strategy, with every new client, is to take a giant step back and look at – as the name of her firm indicates – first things first. “Our tendency is to start in the minutia when problem solving,” she says. But the problems in front of you likely stem from something larger. “So, I do a reset process,” she explains. “We go backwards and talk about the goals, the strategies, and the bigger challenges.”  

One of the bigger challenges she finds is poor customer relationships that stem from a disorganized onboarding project.

It happens so easily. 

“Let’s say an MSP is focusing on a geographic vertical,” she says. “They go to a local event to get leads and three of those sign on.” This is great. Except that now they have three onboarding projects and, often, no system for managing that. On top of that, their entire team is already busy supporting existing clients.  

“They have to be ready for this,” she says. But many aren’t. “Smaller MSPs don't have an onboarding or projects team.” Meanwhile, their system for managing onboarding is intensely manual and tasked to someone who has another job. “This becomes like fixing the car while it's moving,” she says. 

No one can develop a system for doing onboarding, learn processes and software tools to streamline and automate it, and do three onboardings while also doing another job. They certainly can’t do it on the timeline an eager salesperson promised to a new client. 

If you take this local-event experience and magnify it across all the new clients a newly hired salesperson closes, you can also amplify the number of poor first impressions you are making with the clients you hope to eventually retain.  

“The first impression you make is the foundation to the relationship,” says Hockenberry. “Relationships build retention, and retention builds revenue.” 

When MSPs start losing clients, they often tell Hockenberry it’s because of price or an acquisition or other things that are out of their control.  

“If the relationship was stronger, though,” she asks. “How many of these things could be prevented? The MSP business is heavily based on trust. Trust builds through the relationship. Layer cybersecurity onto it and trust becomes even more important.”  

If you make a bad first impression with a chaotic, botched, or poorly managed onboarding, you immediately damage that trust.  

“It's really hard to recover,” she says. “If you ever can. You're always fighting it. It’s always in the back of their mind. If anything gets bumpy, they're like, there it is. That's who I thought you were.” 

Design the onboarding before you sell it 

Once you trace your current customer relationship issues back to onboarding, it is clear that to grow the business, you have to start by building a clear, repeatable onboarding process. It needs a team and shared software tools to track the details and schedule.  

“If you don’t do this and your sales efforts are effective,” she says. “Your onboarding people will be overwhelmed, and you will set yourself up for failure.” 

Many MSPs manage projects with shared spreadsheets and calendars. Or they might use the tools in their PSA. This is part of the problem. Spreadsheets and manual scheduling are time consuming, intensely manual methods. “PSAs are good at a lot of things, but they're not phenomenal at managing multiple resources across multiple projects,” says Hockenberry. 

You need tools that will show you the big picture, tell you in advance when your team will be overwhelmed with work from existing clients and other projects, and that allow you to overlay all work and see what will happen several weeks in the future. That is the best way to quickly give a new client a timeline that you know won’t collide with ten other timelines in a few weeks. 

Set reasonable expectations 

There may be nothing you can do to prevent bumpy onboarding until you are ready to invest in people and systems that can give you that big picture, detail control, and long-term view of the work. Even with a perfect onboarding system in place, there could be hiccups. 

Knowing this is a great start. 

“I'm big on setting expectations,” says Hockenberry. Technology is complex. You might find things in your discovery that change the project and the scope. There may be technologies the client has or needs they didn’t tell you about or didn’t know about.  

“If you tell them this is going to be an Autobahn experience,” she says. “They will drive their Maserati and, the moment you hit a bump, it will trash their car. If you say, there’s going to be stops, bumps, and traffic, they will drive slower and bring their Jeep.” So be honest, from the start. 

You can also use this knowledge to buy time.   

“When you get those three leads,” she says, “maybe offer a discount to somebody who's willing to wait 60 days.” If you know that doing three onboarding projects on top of everything else will be bumpy, use that knowledge to set the right expectation. 

“Tell them, ‘I want to be your business partner, but I've got people already in the hopper and I want to give you my best. I can't give you my best right now,” says Hockenberry. 

It’s important, though, to know your schedule well enough to be sure that you will be able to give that person your best in 60 days.

Prepare your processes for the upgrade 

The right software can be a huge help. But it won’t fix sloppy systems. So, before you buy a tool to organize your processes, fine-tune those processes. 

“I recently told a client that even if you're not buying this project management software, let's pretend you're trying to fit your process into it,” says Hockenberry. “That way, when you are ready to buy it, you've kept to guidelines. A willy nilly approach will never fit into any software.” 

That future moment when you are ready to invest in project management tools might come sooner than you think, though, if you are doing all the math. 

“Operational software always feels too expensive,” says Hockenberry. “You will ask, ‘What kind of money is that saving me?’” Now go back to the source of your client relationship problems and add “bad first impression” into your calculations. Then multiply the poor relationships it caused by the reach those customers have on social media and with their peers.  

“It's saving you tons,” she says. “It's saving you first impressions.” 

The same math applies to your client relationships if you make a fantastic first impression. When your clients trust you and your relationships aren’t in recovery mode, maintaining that relationship – and retaining that client – is easy, even when things don’t go perfectly. So is getting new clients. 

“Retention is so much less expensive than sales. And referrals are beautiful,” says Hockenberry. “If you have great client retention, your sales process might be referrals. You are still onboarding clients, but you don’t have to do a lot of advertising and marketing because your clients pass your name to their peers and recommend you on social media.” 

Getting to that beautiful place starts with a masterful onboarding and a fantastic first impression. 

Looking for more insight from industry experts? Check out our blog on how to better manage projects featuring Dean Trempelas.