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Justin Esgar:
All right. So where were you, Texas?
Eric Anthony:
no, I was in Chicago.
Justin Esgar:
Oh, the not Texas. What's in Texas this week? Channel Camp. Channel Pros Channel. No, channel Summit Channel. Somebody.
Eric Anthony:
Somebody's doing a CMMC day.
Justin Esgar:
You know who doesn't need that? Mac people.
Eric Anthony:
Because they're smart enough not to work for the government.
Justin Esgar:
Exactly. Let's talk about compliance and security tonight. Or we could talk about losing clients. Cause I've lost two in a week.
Eric Anthony:
Ooh, that's a good one. Hold on, I'm gonna take notes.
Justin Esgar:
What's up everybody? Welcome to the All Things MSP podcast. I'm your host Justin Esgar with the OG host, Mr. Eric Anthony. So we're gonna start every show. Eventually I'll come up with like a cool tagline after like bringing the, the, the dark web of chat wi mixed sprinkled with the d o d standards of friendship here at All Things MSP.
Eric Anthony:
And it makes it even funnier when he doesn't tell me he's gonna start.
Justin Esgar:
Yeah, Sir!.
A B R. Always be ready people. Well, you gotta remember something. I'm from New York, I wanna get stuff done. I like getting things done. True story. This is a true story. I had a client one time, actually was my first client, and they needed a hard driver placed in a, this is, we're going back years now. They needed a hard to replace in their, in their G five cheese grater machine. Those big, those big honking ones, right? Yeah. Yeah. And I was like, I, he's like, I was like, okay, I'll order you one, because remember, I had worked for someone for four years. Here I am sort, I'll order you one, take a couple days and then I'll come by, I'll install it. And he goes, no, I want you to go to Best Buy and buy one and pick it up and bring it to me.
And I was like, well, that's not really how I do business. And he straight up goes, well, aren't you hungry? And I was like, I'm not starving. Like right. But that's the New York mentality. He had it. He, he, he, he embodied it. so he is like Friday, 9:00 AM and of course I show up 9:00 AM no one answers the door <laugh>. It wasn't until nine 15 that this girl showed up and she was like, oh, are you the computer nerd? Side note, that girl is now my wife, but he didn't even show up that day at all. Right? So after like barking at me, he did reimburse me plus tax for the drive. But, you know, I, I didn't, I didn't know better. But now I stand my ground on a lot of things. And I think, I think especially when you're starting off, you need to be able to stay at your ground. But New Yorkers go fast. A b r always be ready.
Eric Anthony:
Yeah. So that's a good, first of all, I had the same experience, right? You,
Justin Esgar:
You had the same client and met my wife. When was your first
Eric Anthony:
Not No, no, not the exact same experience.
Justin Esgar:
<laugh> but just demanding clients.
Yeah.
Eric Anthony:
And in fact, so one of my favorites is I was actually working for somebody who was traveling quite extensively, and his laptop got stolen and it, it wasn't any good to him without all of his software on it and everything else, right? This was back before we really did backups. Right. and, but he was over.
Justin Esgar:
Now, let's be honest,
Eric Anthony:
<laugh>, but he was over in Europe, so I had to get a new computer, load all this software, fly it over, meet him in the airport, and then fly right back.
Justin Esgar:
Oh, you hand delivered it?
Eric Anthony:
I hand delivered it.
Justin Esgar:
Wow. Did he pay for your flight?
Eric Anthony:
Oh, absolutely.
Justin Esgar:
Did he pay for first class?
Eric Anthony:
No,
Justin Esgar:
No. I read a consultant's book one time about it was like the rules of being a consultant. And it wasn't about it consulting, it was just consulting in general. And the person was telling a story where he was talking, the, the storyline was like, he was talking about the auspice of being another, you know, one of these other consultants. But their rules were, and their rules were if you are going to make me travel to you, my rules are you must pay for business class. And I only take, you know, like black car limousines. This is obviously well before Uber, whatever. It's because what he's putting out there into the world, into the clients is like, this is my level of success and you either play at my level for me to help you or you don't. Right? And then he, he puts the kicker as like, that consultant was me.
And I was like, haha, pretentious. but I then put into our clauses, like round trip economy plus not the cheap, cheap one because I'll upgrade if I feel like it, and I'll, I'll eat that, but like, at least I'm economy plus hotel. and then I think I have an, our contract, like a stipend for like, just dinner. I, I don't even bother with breakfast or, or lunch and our thing, right? Like you're paying for dinner. If I'm there for more than one night and, and there's usually a requirement of one night or whatever, it's, I've only ever had to use it like once or twice in 15 years. Mm-hmm. <affirmative>. But it really does come in handy if you set those, if you set your rules, you become the demanding one, not the client. And then you set the, the rules around that, right? And that makes your life a lot easier. For sure.
Eric Anthony:
Yeah. So two takeaways from that, in my opinion. Number one is we should talk about what to do about demanding clients. And the second one would be, how do you set up those processes and procedures for those things? And how important is that? So, so let's tackle the first one because this one's, in fact, this one may take the entire episode, I don't know, <laugh> talking about those lousy clients, those demanding clients who just are asking for way too much and, and what are, first of all, what are the downsides of doing that? Why should you not deal with a client that is gonna give you that much grief?
Justin Esgar:
The one of the companies we acquired, this guy, Chris, the owner, John, he actually hate, used to have a thing in his country called the Will Wheaton Law <laugh>. And it's, it's the deal with that, right? We call it the no abuse policy. It's similar. We all, I think all of us as MSPs, our goal civic make money, but our real goal is to help people, right? We're in this cuz we like fixing things and therefore those things are computers and also people, right? We wanna fix people and we're not good enough to be psychiatrists. So we got into it.
It's very easy for us to fall into a pattern where we're always helping somebody. There's the emotional draining client, the one who doesn't know how to do anything. The one that questions literally everything you do for them. You, and I think this is especially in the last two to three years, with the ideas of like mental stability and empathy and, and gratitude and all this stuff becoming more forefront for a lot of people. You have to then realize who's taking advantage of you. Two reasons. One, you probably don't realize that you're per hour price of that person is dropping every time they call you. And what was a thousand dollars, 2000, $3,000 a month contract is really $3 an hour when they're bothering you that much, right? And then two, they're gonna drain you so badly you cannot perform for your other clients and therefore your other work will be affected as well.
Yep. Now there are, there is one easy, not so easy answer to this, which is please be with you. I'm out and call it a day and break up with them. But you need to make sure that you have coverage to do that. And so you need to rewind the clock and like, let's look at your, and we're not gonna talk about today, but like, we have to look at your contracts. We have to look at how you set up your business. We have to make sure that you have put these things in place to protect you for when that client goes off the rails.
Eric Anthony:
Yeah, absolutely. And you know, cuz this has happened several times to me, is you get a client exactly as you described and, and they become so unprofitable it's not worth it. But that brings up the other question of are you actually tracking profit by client? Because if you're not, then you're doing something wrong, right? I'm sorry. Even if you're small, you need to know how much money you are making per client, or you're doing yourself a disservice. Now, I understand when you're small, you have to take almost any work you can get, but there becomes a point, and it shouldn't be too far into your MSP journey where you can start being a little bit picky. And if you need to throw somebody off, you throw them out, right? Because they're, they're not worth your time. And especially the point you made is perfect. Eventually they will start taking away not only profitability on their account, but because they're taking so much time away from you, they're taking away profitability from other accounts. And that's when it gets really, really dangerous.
Justin Esgar:
What you're talking about is essentially the pumpkin plan. I know we've like completely our, our path today is just like this <laugh>. but what you're talking about today is the pumpkin plan by Mike Malowitz, right? So this is a great book. I think every business owner should read it. We'll put it in the show notes. let's get some Amazon affiliate Lincoln going, and we're gonna make some money on the show. the pumpkin plan basically is this, to grow the world's biggest pumpkin. We're talking about those like blue ribbon winners. A farmer will grow 500 pumpkins and then start weeding out the bad ones because the bad ones, even though they're, they're bad, they're still there and they're still sucking up nutrients, they're sucking up water, they're sucking up the literally the lifeblood. Let's convert this msp your time and money and your emotions to deal with something that's not that great when you can put all your time and money into the big one.
Not saying you need one big client, that's a bad idea. But when you need to weed away those bad clients to make a positive impact on the clients who are good for you, that's what we're talking about. So number one, buy and read the pumpkin plan. number two, you know, sometimes we as MSP we we're not really good at talking about our feelings. A lot of us are introverts, right? Not everyone can do a podcast. But understanding that part of your, of your own body is highly important because your own mental health and physical health allow you to do your job. And if you have a client who every day is like, my printer doesn't work, my thing doesn't work, this doesn't work. Why doesn't this work? Hello? Hello. Why are you not answering my tickets? Hello? Why now? Now it's my mouse. I I could have sworn it was working yesterday. This worked yesterday. Why can't you just fix this? Now? It's the toaster. Like you need to be like hold, hold the phone. You are going well above and beyond what I'm capable of doing for you and we need to have a conversation. And it's like a shitty ba a shitty breakup. But sometimes you have to have it.
Eric Anthony:
Yeah. And you know, sometimes it's on their end, sometimes it's on our end. But there's always, there's always a solution to it. The big key, and you mentioned contracts, making sure your contracts are right. This is one of the important things about contracts. They set the expectations not only for the relationship while it's going well, but for the case where the relationship goes poorly. And, and you do need to separate so that it's not emotional. Nobody has to get emotional about this. People didn't follow the contract, the scope wasn't met because by the way, there should be scope on both sides there. You know, it's a responsibility matrix is what they call it in the cybersecurity realm. Who's responsible for what? You should have the same kind of thing in your managed service agreements so that you know what you are responsible for as the M S P and what the client is responsible for as the client,
Justin Esgar:
Right? And, and for those who aren't sure when we're talking about what the client is responsible for, we're talking about easy things here. That, that should be in your, in your agreement. The client should be responsible for giving you access to what you need. The client should be responsible for paying you on time. The client should be responsible for following your rules and regulations when it comes to pay schedules hours of operations, travel, like we were talking about in the beginning. Like these are things that the client will be responsible for. You on the other hand are going to be responsible for making sure their stuff doesn't break to the best of your ability. Keys. Yep. I'm actually reviewing our contract right now for vir excuse me. And like literally like the words best of your ability are in there because you're only human, right?
Like, and right, I've been doing this 15 years, I get called out on things I can do. I I know something and then someone goes, well I can't find that online or find something else out against what I, what I said cuz maybe something changed from yesterday today. You know? Yep. so these are important things to have in your contract. So in your contract you need to make sure you have rules about how, what the client's responsible are, what you're responsible for. You need to have rules around how to break up with your client, how to end that relationship. You need to have rules about why you can break up with your client including, you know, abuse. There's a way to phrase that and talk to your legal team about how to phrase that properly. and there's gotta be a way to get out of your agreement with your client when they're just taking more hours than they should. And that should be the second or third step. Obviously you wanna talk to your client and be like, listen, you know, your schedule for 10, you're using a hundred, we need to have a conversation here, or I need to go, that's an okay conversation to have.
Eric Anthony:
So what is your thought on this one? Because I actually added this into my msa. I don't know, probably back in 2009, 2010. Mm-hmm. <affirmative>, because I had a client who their employees kept calling me about how to use Excel. I'm like, my managed services agreement does not include training your employees to use the software that they should know to use as part of their job role.
Justin Esgar:
<laugh>. Yeah.
Eric Anthony:
Well it literally was taking, you know, tens of hours a month and I'm like, this is not okay. So in their qbr r you know, and, and it all worked out amicably. This was not, you know, something that was you know, ended badly. We just ended up revising the agreement. Mm-hmm. <affirmative> to say that I was not responsible for that. If they wanted training, they could pay additionally, but my recommendation was go out and send them to training. Cuz that's not something I specialize in. It's not something I do on a regular basis. So the problem came up, we talked about it in their QBR r and, and we resolved it, you know, but from there on you better bet that all of my managed service agreements from there on out included that type of clause to say that training on Microsoft 365 and any other line of business applications, regardless of whether I know how to do it or not, is outside of the scope of what you're paying me for.
Justin Esgar:
Right? Yeah. Again, that's setting those rules. We used to have a rule that says we don't work. I mean this is going back 2008. We don't work on blackberries for example, cause blackberries are still a fing. Then I don't, and I never had one, I never wanted to touch one. So we put in there, we have a clause that says we don't do anything with wires in, on or through a wall, right? Because New York City walls are made out of paper and, and, and, and wire, like anything can fall off a wall and we're not AV specialists right? Put in there. So when they come to us and they say, Hey, you know, we wanna mount a TV on the wall and I get to go, you need an AV company. We don't do that. Well, it's it's technology. You're, it, it says it in your contract.
We don't do anything in honor through a wall. We don't touch av, we don't touch blackberries. I can help procure an AV company for you. I can help bring a couple to the table and, and help you make the decision on which one I think you should pick. But at the end of the day, you need to hire a third party for this. We're not the, it's the same reason why you don't ask me to come and like clean your bathroom. I'm not, I'm, that's not what we do. Right? Right. granted we don't have to write, we will not Clorox your toilet in our contracts because there's like an understanding. I think the other problem is that like I have a, we we, we've had clients in the past who have been like, but it's technology. You do technology. Everything's technology. And I'm like that saying, your your microwave is technology.
We don't fix microwaves. You know what I mean? Like the contract has to be clear and concise. It has to set those rules and they have to be hard bound rules. So have a legal teamwork on it to protect you, to protect your client, to protect your client from suing you. And just to make sure that everyone knows where, where, where you stand. This is what I do. I know a lot of who only, you know, only do VoIP or only do Office 365 resell. They don't touch computers. They better say that in their contract because you install Office 365 on a computer. Well we don't touch computers but it's Office 365 but it's not the part of Office 365 we work on, right? Like that has to be explicitly written. So all of these things that we're talking about today are all related down to the same thing of know your boundaries.
Eric Anthony:
Yep. And by the way, if you are still doing break fix, which is still acceptable you know, it's included in your scope of work when you're quoting a project. So this is not just for for managed service agreements, this is for any time you do work for a client, you wanna make sure you're setting expectations properly. and I think we've probably covered that enough. Let's cover the really fun part when you get to the end of the road and you can't reconcile what are some of what you consider best practices for offboarding a client?
Justin Esgar:
So off boarding a clients obvi is always really hard for, for MSPs, right? Because our job we always wanna be sticky. That's right. This big word sticky. So not only do we do your services, but like we'll take over your Google accounts and your office 365 accounts and we'll resell you your Ignite file share and we'll do your single sign on, right? Which means uncoupling all of that is really, really hard. I know plenty of MSPs who do not do any of that specifically for that reason, but they also don't, they miss out on some of that money. So that money turns into hardship later. So if you're offboarding number one is don't take it personally. A client is going to fire you. I have been fired from clients before. I'll be client, I'll be fired from clients in the future. Don't take it personally, do everything.
No. Well let's go back one step in your contract, you should have an offboarding fee. Put that in there, right? So don't take it personally. Your client has, the client has to pay that fee somehow or other, otherwise they're not gonna be off boarded properly and you can just call 'em out on it, right? Then the buck's in there, in the, the ball's in their court when you're offboarding, if there's another IT company involved, don't go into it burning bridges because I've had plenty of companies who have left me gone to another IT company and left that company within three months. Now granted I could have tried to get them back, but there was a reason they left me in the first place. But they're just gonna cycle through people. If you burn the bridge with the client, they'll never call you again. Maybe they will, maybe they won't in the future, but like they never will if you burn that bridge. So that's number one. Number two, continue to act accordingly with the client. You're handing off data to a new, I literally had an offer one time where the new IT company was like, what's the CEO's email password? And I'm like, I'm not giving you that.
They were like, why not? We need that. I'm like, let me confirm with the CEO before I go and give you her their their email password. I can give you like the ad the Google admin account cuz that's part of the normal IT set, but like I'm not giving you their personal email password. And so I went back to the CEO and I was like, they're asking for this. And they were like, please don't give 'em that. I was like, done. Right? You're acting in their, in in your client's best interest cause they're still your client. And so that last day, right, you need to be there with integrity. So give as much as you can give without overstepping, play protective and you know what they're leaving. Tell them what you need to tell them. We have a client who's leaving us. We had a client who left us one time, they move from us to another M S P that M MSP doesn't do Max.
And I was like, I just wanna warn you about this. I don't see Apple anywhere on the website. They're not a member of the Apple consultants network. They don't say Mac anywhere. Like I just want you to be aware If you know, great, if you don't know now you do. You know what I mean? And that's okay. They're like, thank you so much because you want them to leave with a good TAs in your mouth. Maybe they'll leave you away. Yeah, maybe they'll come back. Who knows. But like, these are the things you have to do. So don't be, don't be burning bridges. Don't burn bridges. Don't go into this begrudgingly and angrily. It's the cost of doing business. One client leaves, three clients show up. That's just how business works.
Eric Anthony:
Yep. And, and I wanna say two things about this. Number one is never hold information hostage because most court cases, and there have been court cases around this it has landed in favor of the client, that the client owns that information. Mm-hmm. <affirmative>, that is the client's proprietary information, not yours. actually I have three things to say about this. Sorry. That's okay. The second one is never put multiple clients inside of one tenant because you can't, it's too hard to separate. And, and as we've talked about, separation is going to happen. Third thing is, and you just touched on it, was you need to make sure your sales and marketing funnel is built. It's a process and it continues to work so that you don't have to worry about losing a client, firing a client because you have another client. You have a process for new clients to be consistently coming in to be able to replace that client.
Justin Esgar:
I agree with the first one. The second one, the tenant thing. I think that's subjective because it depends on what you're dealing with. For example, we use addage G as our rmm. It's a multi-tenancy tool, right? But we would never put all of our office clients in one tenant. Right? I don't think you could, but Right. You know what I'm getting at. Yeah. and then, yeah, the sales and marketing, which we'll talk about in another episode, always the biggest part of this. And there's, we'll bring some people on who know a lot more about sales and marketing than than Eric and myself to like make sure that you're getting that set up properly. but I mean, I remember when I was younger, I was like 16 years old and I was doing computer teaching. Like I was training some, I was teaching at a camp and then one of this, one of the campers parents wanted me to come and give 'em like personal lessons.
So I would like drive over this, their house, do an hour with the kid, call a day. And after like, you know, three months, four months, they were like, Hey, you know, we're gonna do something else with, with with the kid. I think he was gonna go play hockey or whatever it is. And I got so upset. I I I, it was the first time I've ever been fired, right? I got so upset. And again, I'm, I'm 16, 17 years old at this point. I was like crying about it, right? Cuz I was so upset about being fired. Now, you know, I'll get stressed about losing a client because that's a natural instinct, but you can't take it personally. And, and I know I'm calling the kettle black here by like saying this and not always doing it myself, but things happen. I've had clients who I was working with them, they were a 15 person office and something went wrong and they were a two person office.
And I was like, I can't support you anymore. Right? And I've had clients who have come to me and said, listen, we don't like the way you do business. You're out. We we're getting rid of you. You know what, I'm not for everyone and everyone's not for me. And it's gonna be the same for you, the listener, right? You have your way of doing things, you have your way of acting and reacting. You have your way of doing ticketing and not, that's not gonna work for every potential client that's out there. Pumpkin plan this, right? The ones who don't work, you can weed out whether in pre or post sales, you know, whether you're firing them or they're firing you, but then you can grow a really good business with the clients that you do have. And then you continue to do the best you can. Do your qbr, find out what other services you can offer them. In fact, we're losing a client and I'm thinking to myself, okay, how can we make up that money by selling a couple of other things to a couple of other clients, which means less endpoints to manage more money on the other side, right? Yeah.
Eric Anthony:
I mean, is it better to make a hundred thousand dollars worth of profit on 50 customers or a hundred customers? 50. That's easy. It's a no-brainer.
Justin Esgar:
Right?
So knowing that, but hold on. There's the, the asterisks on that is knowing that if you lose and you go down to 49, you can pick up that 50th again, right? Correct. Dyer's the kick, right? And we'll, and again, we'll talk about sales market another day, but that, that, that that, that rotational door is what our businesses are. There's also that thing of like, oh, I don't need new clients. Cl businesses that are stagnant are dying. Yep. Slowly. You always need new clients. You always need new services to offer to your clients. You always need ways to en engage with your clients because if you do lose one and you will, you can find ways to not have it affect your overall business.
Eric Anthony:
Right. You know, my summary would be make sure you're setting expectations properly. And the best way, really the only way to set that properly is in your managed services agreement.
Justin Esgar:
Yeah.
Eric Anthony:
The second thing is try, try and take emotions out of it. this is a business, you know, you shouldn't be taking it personal and you know, these things just happen. It's, it's a normal process in business for clients to come and go. But then the third thing is, like we've already said, make sure you have that funnel, that sales process working so that you have a constant supply of new clients to replace the ones that are gonna leave and the ones that you need to weed out.
Justin Esgar:
Yeah. Couldn't have said it better myself. Good. I'm glad I didn't have to. You said it for me. <laugh>, listen everyone, we wanna hear from you, send in your questions post on the Facebook like subscribe to this video. The way this show is gonna get better is when we start answering your questions, right? We're still doing some prelim stuff. Some of this is just kind of Eric and i's ideas where we talked and we just started recording and here we are. But like, send us your, send us what's going on in your business, you know, be if you wanna do it anonymously Sure. Whatever. You wanna send us an email, send us an email. I'm sure we'll have an email soon sent to post. Tell us about what's going on. Maybe be a guest offer to be a guest. We'll bring you on, we'll talk about your business. Eric and I have a combined knowledge here of like 30 plus years of doing this, right. that's
Eric Anthony:
Suffering. That's a
Justin Esgar:
Long, that's a lot of suffering. Yeah. <laugh>, that's a long, that's a lot of hard driver placements. I'll tell you that much. Yeah. we're here for you, the community. And that's what we wanna build the, this platform over. We wanna build it on the community. We wanna build it for the community. it's, it's, it's fubu but for for for it people <laugh> it, FUBU, that's what we should call it. But I think that's copyright. probably otherwise, probably otherwise like, and subscribe. And ladies and gentlemen, we will see you all next time.