In June 2010, we featured Richard Anderson, CEO of Next Level Café on the cover of Business Solutions magazine. This managed services provider (MSP) had experienced 21% sales growth in 2009 over the previous year, and it was projecting up to 20% growth by the end of 2010. In this feature story, titled “The Price Of Success,” Anderson shared that changing from the traditional pricing model to a headcount-based pricing model that allows for the impact of cloud and hosted models was a key factor in his current growth. His future growth was going to be dependent on his ability to have deeper business strategy conversations with his existing customer base. I caught up with Anderson recently, to find out how his goals played out over the past two years.
How has your business fared since we last spoke with you?
Anderson: A coach and good friend of mine once clarified that, as a small business, we are often forced to focus on either operations or sales. It is difficult to do both because you either have too much sales or not enough, but seldom “just right.”
In the months that followed our interview, we continued to execute the remaining steps on a 9-month plan that included a transition of our pricing model (to user-based pricing, as described in the article), but we also rolled out a new Account Management structure/model, transitioned several people into new roles (putting them in the “right seat on the bus”), and stabilized the revolving door of customer attrition.
In the final month of our 9-month plan we had two major OPERATIONAL challenges – the first was a murder trial which required me to serve jury time for 4 weeks. The other was the unplanned departure of our operations manager. The remainder of 2011 was, again, focused on realignment, training, and retention.
2012 is now focused on SALES. Our team is solid, client and employee retention is stable, and our focus has shifted back to growth.
What has contributed most to your success since we last spoke?
Anderson: We were an early adopter to the Office 365 offering, which largely contributed to our transition from device-based pricing to user-based pricing. One hundred percent of our clients are using some form of cloud-based services. As the LOCATION of technology moves from premise to the cloud and as the BYOD (bring your own device) movement gains momentum, we continue to believe that USERS are the one key variable in which all support and services must be based. There is always some new device, service, or cloud offering, but the USER remains constant.
Are there any new technologies/solutions you’re offering which are impacting your business?
Anderson: Again, Office 365 is part of our offering, but from a revenue point of view, it is only a miniscule part of the total picture. What it DOES do, though, is:
a) open up new doors for project work,
b) create a low-risk entry-point for future MSP sales and
c) simplify the ongoing management/maintenance for Exchange – which allows us to focus our time/energies elsewhere (adding value, providing education, etc.)
Speak to any failings (small or large) you’ve experienced since we last spoke.
Anderson: Failure is constant, I believe, in any business venture – and we’ve had our fair share. The challenge is learning from them or converting them to successes. Here are two that come to mind:
- Not having a solid pipeline of new-hire candidates nearly killed us in Q4 2011 when we had unexpected turnover with no readily identified candidates to fill the opening. We managed to fill the void by leveraging a relationship with a staffing agency and a local competitor who shared some recent resumes with us – and, with a lot of luck.
- Not recommending the RIGHT answer due to a perceived lack of appetite. We spent many years holding back certain recommendations because we assumed the client didn’t have the money to invest. We have begun making those recommendations more proactively, even to those clients that don’t appear to be able to afford the “right” solution – and we’ve been pleasantly surprised with the results.