Boost MSP Profits with Better Communication (EP 787)

[Uncle Marv] (0:54 - 8:17)
Hello friends, Uncle Marv here with another episode of the IT Business Podcast, and this is our Wednesday live show, and this is going to be a take two. And I don't know if anybody was able to hop over and join us yet, but if you are, can you please just give a shout out and say hello, and welcome to the stream here. The joys of live, folks, you can't really, you know, plan for these things.

And in the old days, I used to say we were feeling Comcastic because Comcast was such an excellent provider for me in this building. And I've recently switched over to AT&T, and I've technically had no issues with them. I don't know if this was an issue or not, or it could be our friends over at Streamyard.

We shall see. They don't pay me any money, so I'm not too worried about that. Tonight, I have coming back, joining me, Melissa Hockenberry.

You would have met her last week, if you're listening to the show, is in order. And she has a consulting business, First Things First Training and Consulting. And it's basically aimed at improving customer and revenue retention for MSPs by focusing on customer experience and relationship building.

So I've got her back. We're going to recap that episode from last week, and we're going to answer a couple of listener questions and do a little deep dive into what she's got going on. We've also got a Florida Man versus the World segment, and Melissa has brought a Florida Man story from a real live state trooper.

So this should be good. It may be a loss for Florida Man for the first time in a long time. I do want to, real quick, give a shout out.

This show, our premier partner, NetAlly, has been with us for many years, and I have a meeting set up with them to bring you a show here in a few weeks. They were really busy at the beginning of the year, but I wanted to get them on as we usually do at the beginning of the year and talk about the new products. They have a LinkRunner 4000 that is out now, so we're going to talk about that.

I'm also going to be doing that series of shows that I talked about where I will be highlighting each of the tools. I have just about all of them, everything from the LinkSprinter to the LinkRunner to the EtherScope and the CyberScope, tools that I use just about every day when I'm on the road. That bag goes with me.

That is my go bag. So I do want to at least, if I can get my screen here straight, because technical difficulties is what we do here, apparently. So you can always catch NetAlly at netally.com or head over to the IT Business Podcast site and click on our sponsor page. NetAlly is the ultimate solution for IT professionals tackling network challenges. With NetAlly, you can gain instant visibility and actionable insights, cutting troubleshooting time by up to 60%. The auto-test features on all of their devices deliver diagnostics in seconds, and they can even empower your junior techs to be experts in the field.

So that is great. If you saw the beginning of the show, you would have noticed a new sponsor that we have here. And the way that my screen is, you really can't see the logo properly.

So I'm going to have to fix this on the screen. But you will see them. This is great.

I need to come to rehearsal. That's probably what's the best thing is. Yeah, you know who they are.

NetAlly, LionGuard, protecting the attack service, surface, learn how to speak. They are the ultimate automation platform for managed service providers. From real-time change detection to automated documentation, LionGuard gives you total visibility across your IT stack.

I want to highlight them because if you saw my video at Florida Man and at Zero Trust World, you would have noticed that I had a new camera device. And yeah, I haven't quite figured out how to use it yet. But LionGuard is the official gear sponsor for 2025.

So they are helping me to get some new gear to try to make better shows, better than this one has gotten so far. All me, all on me. Can't blame anybody else.

So that is there. In two weeks, I'm going to be in Orlando for ASCII Edge. That is their second event that they're having this year.

It is March 26th and 27th. If you are in the state of Florida or can afford to travel and fly into the state, we shall see you there. Rhythms is your portable internet in a box, and they will be providing me with internet there.

Rhythms is also going to be there, and they are high and mighty off of their award-winning performance in Costa Mesa. So I'm going to have Steve Copeland on the show. We might do a live stream there, and I'll see if I can keep them quiet for a while and talk about some stuff here.

And we've got some other sponsors here. Bvoip has joined the fold there. They're going to be a travel sponsor, helping me to get to some of the conferences there.

I had George on the show a while back, so you know all about them. I will talk about them more as we go throughout the year. And, of course, Designer Ready, your white-label web design, they are going to be on the show as well.

So let's do this, because we had such a horrible introduction. Let me go ahead and bring up my guest, and that'll get us back on track. So as I mentioned, Melissa Hockenberry is our guest.

And I've got my papers out of order already, because that's how we are doing. Well, let's do this. Flip over this screen.

And Melissa Hockenberry, with First Things First Training and Consulting, she is a veteran in our space, and you knew her from the days of Autotask and Datto. And we talked just over a week ago about how MSPs should, well, we spoke with audacity about how MSPs should be handling their business. So, Melissa, welcome back to the show.

[Speaker 1] (8:17 - 8:23)
Thanks so much, Marv. It's great to be here. I hope I can bring you some good technological luck.

I don't know that I've ever been known to do that, though.

[Uncle Marv] (8:25 - 8:35)
You know, it's one of those things where I was having a fantastic day, everything was going perfect, and yeah, there's always going to be some monkey in the wrench, right?

[Melissa Hockenberry] (8:36 - 8:39)
I totally understand it, yes. I have certainly experienced those things, yes.

[Uncle Marv] (8:39 - 8:44)
All right. What was that?

[Melissa Hockenberry] (8:46 - 8:49)
I don't know. I want to make sure I'm not moving anything.

[Uncle Marv] (8:50 - 9:06)
We've got gremlins in the internet here. Oh, fantastic. All right.

So, folks, you remember, Melissa, if you listen to the show, experience at Autotask, you were employee number nine, right?

[Melissa Hockenberry] (9:06 - 9:07)
Yes, yeah.

[Uncle Marv] (9:07 - 9:25)
Employee number nine and transitioned into independent consulting. Your focus has really been a lot on customer experience, basically focusing on the importance of customer empathy for MSPs.

[Melissa Hockenberry] (9:26 - 12:27)
Yeah, yes. Definitely part of the whole retention part is getting, as I talked about a little bit last time, is the fact that so many MSPs are brilliant technically, but their soft side skills are not necessarily their strongest suit. And so, trying to get people to relate a little bit more, I did a presentation last year at MSP geek con in Orlando, and it focused on your customer is not an NPC.

So, if you're not a gamer, that's the non-playable character, right? But what we talked about was that you can gather information from them. One of the tips that I gave was about environmental scanning.

So, if you happen to be online or on site, and I'm really big about that. That's a phrase I always say. I'd like to see more MSPs adopt.

It's not remote work, because remote is distant and removed. It's online work. So, you either work with customers online, or you work with them on site.

And either one of those, you can look for environmental things. If you're on site, that's a benefit. You can, as you can see, you can look around me and kind of know what is important to me.

But even if you're not with me, you can see that, right? And there can be some things that they can point to or connect with. Maybe there's a sports memorabilia that you notice or something of that sort.

So, just trying to teach people to look for the other things. And then, also, I talked a lot about MSP owners and executives setting the tone that maybe their team are not incredibly comfortable with eye-to-eye contact. So, they're going to stare at a computer while they ask you questions.

And they're not trying to be disrespectful. But the actual, you know, the owners and executives taking the time to set that tone and say, I've got brilliant people, but the best way they work is to sort of stare at that screen and kind of shoot some questions to you. So, it's also helping them set an expectation as well.

So, the empathy, it's, you know, teaching people empathy is nearly impossible. Some people are just very naturally empathetic. But relational skills are kind of where you can get a lot closer.

And being able to teach your team some key words, some key phrases that a customer, I also never call them end users because there's nothing good about users as we talked about. But teaching them some phrases like, you know, I never understand this, or I always get lost here, or it just blew up. I have no idea what happened.

You know, those are phrases of frustration. And giving your techs and engineers some calming phrases, things as simple as I understand or I hear you, you know, little things that they can use that acknowledge it that isn't going to naturally make them an empath, which is okay because they're good at what they do. But just some phrases that they can use, sort of having a battery of things that they can go to when they're not really sure what to start with.

The biggest thing is customers being heard, you know. But you can get a lot from their words. And we talked a little bit about that in presentation.

I talk about that often.

[Uncle Marv] (12:28 - 13:13)
So I know that one of the things we talked about was the path that most business owners take that they start out as technicians. So they themselves may not have those human interaction skills and have to learn them on their own first before they can give it to their technicians. What do you say to people that have been kind of in the field for a while?

I mean, I know a lot of guys in the business, you know, 15, 20, 25 years that are just still rough around the edges when it comes to dealing with people. But yet they get frustrated with their technicians because they themselves don't have those soft skills. How do you work with that?

[Melissa Hockenberry] (13:14 - 15:27)
Sometimes it involves finding the soft skills that already exist in your organization, right, and allowing that person a little bit more time with it. So I find people, if you happen to have a service desk coordinator who really does that job, right, they're not a highly technical person, they tend to, if you've got a good service desk coordinator, they know how to fuse situations and they know how to listen better. And sometimes that might seem really strange because you're like, well, they're just my service desk coordinator.

Chances are they've got some really strong skills that your team doesn't. So cross-training, having a technician sit with the person who does that coordination or that conversation, sometimes even your billing person might be a little bit better at that, right? It basically comes down to there are certain people that can be technical and I don't want to use the word compassionate, that's the wrong word, but technical and empathetic.

But it's a rare combination. And so if an owner doesn't have that, you know, I always say if you're looking for someone, your next hire, you know, start to look for somebody who maybe had more of a customer service background and got into technology, right, where you could teach them the tech, but man, they worked in food service or retail, direct retail, meaning, you know, any sort of like consumer-based business. That's how I used to always, when I was hiring for auto task product support people, I would always look for people who had dealt with the public one-on-one because they have really, they have really strong skills and then they could learn more of the technical side of things.

So when you're looking for that next hire or something like that works. Now, the other thing is just finding a friend who has that even who might be willing to come in and talk to. And I think role playing is important because you need to you can't just have this set of phrases.

You actually need to like play it out like, OK, what could you have said differently there? Other than that I have no idea why you did that. That was the most idiotic thing.

You know, what could we have phrased that or how could we have done a little differently? But playing out role play also is a good activity. But you do definitely need to find that person who has the skills.

And sometimes that's a friend. Sometimes that's, you know, a third party. Sometimes it's getting your team some skills training where they're talking some emotional intelligence training or something of that sort.

[Uncle Marv] (15:28 - 16:13)
So I'm thinking in my head that a lot of discussions that I've heard about hiring techs is that they don't have those skills. And the interviews that we're getting, the resumes that come in and stuff, you obviously can't always see that on paper. Now, it's been a long time since I interviewed and I last interviewed when I was considering a tech.

It was four years ago and most of the people coming through. Yeah, they were great technical, but they just I doubt any of them are watching, but I'm trying to be respectful.

[Melissa Hockenberry] (16:15 - 16:17)
I totally understand. You know me. I have audacity.

[Uncle Marv] (16:17 - 16:38)
So, yeah, I mean, but they just I mean, none of them jived in a sense of like I didn't think that I could send them out to a customer site and interact. And that was my fear. So our pool of where we look for those types of people.

Where to where do you go? I know we're off track already, but that's OK.

[Melissa Hockenberry] (16:38 - 18:17)
No, absolutely. I think we often we often keep going to the same well, right? Like we'll go to the tech school or something like that.

I think starting to branch out and getting the word out to your entire network, your neighbors, your everyone. Like when I looked for a job, I was always I was always crazy how much I would like just let the world know, hey, I'm looking because I need this. But I think that's when you're looking for someone like that.

Having a bigger conversation with more people also helps. Just don't go to the same exact pool that you continue to get people in and make sure, too, that you are looking in unusual places, especially oftentimes people are talking about, you know, level one techs and trying to find that. There's a lot you can teach smart people.

Right. Like you might actually go somewhere. You might talk to a local high school and be like, hey, I'm not sure if you have anyone like this that has an interest in this.

I'm currently looking for a side note, looking for a friend whose son has successfully hacked the local firewall at the school district and got kicked out looking for a place for him. Right. That's a brilliant person who.

OK, does he have some of these social skills? Maybe he does. But looking in in more unusual places and trying to get there, there are a lot of kids with an interest in tech.

And if you're willing to teach that side of it, you might find a server when you go out to the to the restaurant who's amazing. And you're like, you know what, I'm going to throw it out there and say, do you have any interest in tech now? Is that going to be more work?

It's going to be work, but it's easier. They all know it's easier to teach the tech than it is to teach the soft skills. So sometimes you have to do a little bit of farming in unusual places.

[Uncle Marv] (18:18 - 18:24)
They'll also not be set in their ways as what as much as they're going to fight you.

[Melissa Hockenberry] (18:26 - 18:34)
It's so true that you can you can teach them that you track time from the very beginning because they don't know any different. So that's always a benefit.

[Uncle Marv] (18:35 - 19:01)
So what we just talked about, one of the notes that I highlighted from the talk before is that you mentioned that the profit is in the people. Because it struck me that one of the best things that I have seen in successful companies is when you have good people, it covers up a lot of the other stuff, if that makes sense.

[Melissa Hockenberry] (19:01 - 20:32)
One hundred percent. And I had mentioned that, you know, I learned that in retail very, very, very young. So I started in J.C. Penney when I was 21. And I realized that it was in when I say the profits and the people, it's important to know that it's both your external customer and what I call your internal customer, which is your employees. And you're right. Like if you have good people.

I mean, when I my early years at Autotask, we had a phenomenal team. The product was not always perfect, but people hung around for the phenomenal team. They're like, we know that you're going to solve this for us.

And so I think it's really important to hire well. And in a past life, one of the things I did was I was certified as a pre-employment assessor for a company that did that. They specifically worked with companies like Sony and the United Nations.

And it was a small technology company in Pittsburgh. And they it was so good to see how to interview correctly because so many people interview wrong. You know, do you have soft skills?

That's not a question. Who's going to answer? No, I'm really horrible at that.

Unless somebody who's really is horrible and doesn't even know to answer. Yes, I have soft skills to that. But getting the right interview questions as well is really important.

But you're correct. When you build a good team and you start to understand your customer, you start to understand who your best customer is. All of those things start to fall in line and good people will get you through valleys and challenges and difficulties.

Finding them is hard, but you can't keep going back to the same place and expecting a different result.

[Uncle Marv] (20:32 - 21:15)
Right. All right. I'm going to go out of order here.

We had an order in the beginning. So I want to make sure that we get to questions because I actually had two listeners write in questions that were kind of a follow up. So I want to get to them while we're kind of re recapping last week.

This first question reads, you mentioned MSPs are super technical, but not always great with the people side, which we just talked about. You help them with customer empathy. What specific exercises do you use to help them understand where clients are coming from?

Any examples? How do you know if it's working?

[Melissa Hockenberry] (21:15 - 22:35)
Yeah, I think the biggest thing is the giving them key phrases that clients use and what that translates to. Right. Because even people who are soft skill people, we don't show our real feeling.

Right. I think the first things that that techs and engineers most often need to understand is that the person on the other side is most likely fearful of this thing that you have mastered. And that's the first mindset shift.

Let's assume they're afraid of technology and that they're not an idiot. That, you know, in the presentation I gave, I talked about, you know, the ID 10T and the pebcac errors. You can think that all you want in your head.

But really, you do want techs that start to give you look for the mind shift and you teach the mind shift of this is a brilliant person, just not in technology. Right. There's something that they could they could beat you all day long in whatever that accounting spreadsheet is or that, you know, or that, you know, software or that interaction with other humans.

This is just their fearful place. And so let's start with how do you want to be spoken to when you're in a fearful place? What is the best way for you?

So I think that's one of the first things I talk about. And then truly role playing, which is awkward for everybody, but it's going to ask about that.

[Uncle Marv] (22:35 - 22:35)
Yeah.

[Melissa Hockenberry] (22:36 - 24:27)
Role playing. I mean, and you can have some people come in. You might even have your own customers that you really trust say, hey, listen, we're going to be doing a little lunch and learn on this.

You know, would you be willing to come in? We get you a nice lunch, maybe a Starbucks gift card or whatever afterwards. But would you come in and role play with our team?

Like, you know, please know they're going to be rough and raw at this. You've experienced them already. Right.

But having your customers come in and have the conversation and say, like, OK, guys and gals, throw out those phrases that haven't seemed to get you somewhere else. And having your customers say, well, if you had said it like X, Y, Z, that would have been a lot easier for me. I could have handled that a little bit more.

So have creatively thinking through getting people actual because, you know, my daughter joined a program and she was expected to say. And it's not Chick-fil-A, but she was expected to say my pleasure instead of thank you. Right.

And that mind shift. The reason people do that is that they want people to see that they're serving. Right.

It's so little things that you do, the more you hear people doing it and then rewarding that behavior. I'm not big on the stick. I'm bigger on the carrot.

But when you hear text, actually, you know, it's working because you start to listen to recorded calls. Right. Where you can hear the tone change.

And the big thing is when you get someone who gets good at it, recognizing them and then even saying, hey, would you sit with this person? Because some people are not as far away from it as you think. They just need new phrases.

It's like any relationship. Right. We just have to you have to stop the I like or the accusatory use.

It's any relationship. You have to rework your language so it fits well with the person you're trying to communicate with. And it is, I think, the best place to start is language first.

And sometimes you say the language and you don't have the attitude yet. But usually the attitude follows once the language is in place.

[Uncle Marv] (24:30 - 25:00)
So I'm thinking in my head, one of the one of the first languages that I learned was to assure the customer that most likely it wasn't their fault. Yes, because a lot of times they'll call and they'll be like, I'm sorry, you know, I hate to call you, but I can't figure this out or I don't know what I did. And I found that a lot of times just letting them know it probably wasn't you.

These are computers. They have their own mind. Let's see what happened.

[Melissa Hockenberry] (25:01 - 26:10)
Absolutely. Beautiful phrase. And I think truthfully, if you do get a servant mindset of like, hey, that's what I'm here for.

You're giving me something to do today. It's not a problem. Like really reassuring them.

Yes. And that's nice when you get that polite customer who's taking it on themselves. I think the harder people are the ones who are calling you an accusatory because you obviously did something wrong to make this happen.

Right. Those are the harder ones to talk down on. But you start to get more comfortable with them as well.

Because when we look at the person as the fearful individual they are, it's easier to have a little bit more compassion. But, yes, absolutely. Letting people know that, hey, this is my job.

I'm here to help you out. And listening for the keys of where they really are, like mentally might sound a little bit extreme, but people do get very frustrated. And so trying to just have compassion in that, hey, yeah, you know, sometimes it's a matter of getting techs and engineers to understand the last time they were incredibly frustrated with something.

Maybe it was a sibling or a spouse or, you know, but why do you feel like, what are some of the things you need to hear when you're at that point? You can translate those to these technical situations as well.

[Uncle Marv] (26:11 - 27:26)
Yeah. So you made a comment that made me think of my first email this morning was an AJ, an admin junior, sending me an email saying, did you do something to this server? Because this person says their outlook is different.

Now, this was a terminal server and there's dozens of people that work on this server. And I just had to simply think, okay, first of all, one, I don't have time at night just to log into a server and make changes. But two, I had to say, okay, how can I address this and not take it as an offense that, you know, they're accusing me of doing something.

So I just simply, when I called them, I said, well, let me ask you this. Has anybody else complained about the outlook looking different? Well, I don't know.

I haven't asked. But can we ask? Because I can't imagine anything that would have changed because obviously I didn't log into your server last night.

But that's not to say somebody didn't click a button or something. And he was like, okay, that's not a big deal. And then, you know, I don't think I ever heard back.

[Melissa Hockenberry] (27:27 - 28:22)
It just uses, right? Right. Yeah, it is.

It's in that situation. It's remembering, oh, I was just the first person they could throw accusation to. Right.

And the faster you can get at not making it personal, the better. But I mean, some people are really rude. And I never, ever say people should put up with, you know, condescending, like rude, rude behavior.

But I do think you have to remember where most people are coming from with it. And not the important is not the important part is not to feel like you have to settle the score in your verbal abuse. It's really important to be like, okay, let's get to the questions like you said, like who else might have been able to, you know, I can assure you, I did not do that.

However, I understand you still have a big issue. Let me ask you some questions so we can work together to get to the bottom of this.

[Uncle Marv] (28:22 - 29:15)
One of the best things that I did with one of my clients where, you know, we went through this, you know, back in the day, you know, we would always go to clients, they'd see us all the time. And there would always be the comment that when you walk through the door, oh, something must be broke. You know, or, you know, you get there and within five minutes, you're like, what'd you do?

My something stopped working. You must have done something. And it was funny because there were times where, you know, I'd be in the car on the way to the office and something would break or they would try to blame me for something.

I'm like, so I was just in the parking lot. So, I mean, if you want to blame it on me, that's fine. It's always me.

And they learned finally to be like, okay, Marv's not here. He obviously didn't break it. So what happened?

[Melissa Hockenberry] (29:15 - 29:33)
Right, right. It always amazes me to the people nowadays when an MSP has a properly configured right to keep things going, like it pays you not to break stuff that people are still convinced that you broke. No, it's better for me if I don't break it.

You know, yeah, yes, people, they have to blame.

[Uncle Marv] (29:34 - 29:41)
It's funny. I mean, you think I'm just sitting here waiting for something to break and nothing's broke today. Let me break this client.

[Melissa Hockenberry] (29:41 - 29:46)
Right, right. Yes, a very antiquated view of how things work.

[Uncle Marv] (29:46 - 30:14)
It's funny. All right, let's get to the second question here. And I had to rephrase it because it came in kind of funky.

You said a lot of MSPs don't get their profitability. What are some biggest mistakes people make when figuring out if they're making money? What tools or tricks do you recommend to see the real numbers?

[Melissa Hockenberry] (30:16 - 33:06)
Yeah, I mean, anybody who knows me from auto test days are going to know that my first answer is going to be tracking time. So and it's not just the key thing is that profitability comes down to everybody tracking time. So you cannot say we're profitable with this client like profitability in a business level should just be a basic right.

But the accuracy of that profitability is obviously affected by any level below that. So you can't say, hey, we're profitable. If your billing team is not putting time on tickets or time somewhere that goes against that client when they're calling in and complaining monthly and they spend an hour every single month speaking to the invoice.

OK, so maybe they don't cost you a lot of service time. But what if your billing team spending one to two hours a month that makes them less profitable? So that tracking of time is really, really important.

The other thing is really forgetting about sales cycle time and the time it takes you to actually win a sale. People forget about that fact there. Oh, my sales team's never going to track that.

OK, that's fine. But then that should be in like your sales and general admin expense. You should be upping that percentage of expense on things so that you are getting where the accuracy comes into play.

So I think most really forget. They think, oh, or the other one I love is the statement that they'll be like, well, we do this. They're an all in client, so we don't need to track time for them.

What you don't bill based on that time, but there's no way that you're anywhere close to profitable if you don't track time against an all in client or whatever you want to call that. So that's my most amazement. That's the most amazement that I have, or we don't check time on project work or I'm always amazed at the not tracking time.

And I get that it takes time. But the point is, is that once you find out your most profitable customers, you can start to hit a very sweet spot in your business because you may start to see trends of like who that that's part of working well with you. And so you've got to get to that level.

You have to get to that level now. It's OK if it's not perfect, but take off 10 percent on that profitability, you think, or 5 percent or whatever. If you're not going to get everyone, which I get that happens, estimate, estimate, but make certain that you're talking to your operations and people like that.

So you're getting a much better idea of who really are your difficult customers, because sometimes, you know, I always say that sometimes people will look for a profit margin that can't possibly exist because they don't have anything that has that profit margin. Oh, we want to be at, you know, 30 percent margin or 60 percent margin or whatever. But they're not anywhere near that on any of the offerings that they're selling.

And that's mathematically impossible.

[Uncle Marv] (33:07 - 36:31)
Do you find that MSPs sometimes don't include all their costs? For instance, I just I just did this on Monday because we were redoing some invoices and. Wow, I start to ask a question and she goes away.

So why don't we do this? I'm going to do something else while she comes back. Obviously.

Tonight is technology night. So while Melissa comes back, I want to go ahead and tell you that we are still in marketing and money month. And one of the things that I'm going to be doing is a profit builder.

Peer group with Lori Hartke. I remember her. She came on a while back and was talking about profit first and she is building a consulting business around that.

It is not going to be a regular podcast. It is going to be a peer group. And I'm going to have a sign up that you can go to.

I don't know. We were thinking of limiting the number of people that came into that, but it's going to be. Here is the link itbusinesspodcast.com slash profit. And what we're going to do is just have three sessions and they're going to start next Wednesday and then it'll be two weeks after that. And then a final session the third week after or the six week. So two, four and six.

You get the idea. It's going to be three sessions every other week. And we're going to basically have a Zoom meeting and talk about how we can build our profit.

Learning how to pay yourself first if you are the owner, how to reduce expenses and how to build wealth for your retirement. I know that there are a lot of people struggling with what Melissa and I were just starting to talk about with knowing your margins and having profits and knowing what it takes to sell the business or have your exit strategy. So Lori and I are going to put together this again.

It's a three week course every other week. It's the Profit Builders Peer Group. I should probably put this in the chat too.

Podcast. Make sure I'm spelling this right. Put my glasses on.

Dot com slash profit. That look right? No, there's no E in business.

So let me go back and put the E in business. That's close enough. So there is the link that you're going to see and that is going to show up on hopefully all the platforms.

We're back to streaming on all three platforms tonight, folks, YouTube, LinkedIn and the Facebook. I'll explain that at a later date. But again, we will be doing this Profit Builders Peer Group and that will be another part of the Marketing and Money Month here where we're going to try to do everything we can to help you run your business better.

So that is that. Melissa is back. So let me bring her back on the screen.

Hello, Melissa. Hi.

[Melissa Hockenberry] (36:32 - 36:36)
Extreme Yard just doesn't like me. And I always like the ducks prior to tonight.

[Uncle Marv] (36:36 - 36:40)
So they're losing some stock money tonight, but they're not public.

[Melissa Hockenberry] (36:43 - 37:00)
So you got a great profit opportunity coming up. That's great. And yes, I think people need to hear what they need to do.

And I agree on the understanding all those things for an exit strategy and being able to start to put some things away. Understanding where you where you are on that profits just critical.

[Uncle Marv] (37:01 - 37:06)
Yeah. All right. Do you remember the question or do I need to repeat it again for you?

[Melissa Hockenberry] (37:06 - 37:09)
So profitability, some tips and that kind of thing.

[Uncle Marv] (37:10 - 37:17)
What are some of the biggest mistakes people make and what tools or tricks do you recommend to see the real numbers?

[Melissa Hockenberry] (37:17 - 39:41)
So, like I said, time tracking. The other thing is tools. Obviously, if you're not using some sort of time tracking PSA, something of that sort, the easier you can make it, the better.

Understand all the ways that that PSA can work and make it easier for you. I know. I don't know if this is still true, but I know one time Autotask could you could actually email in your time to your ticket and it would automatically take care of that for you.

So that that's definitely a tool for things. And then having taking the time to educate your team that this is all in it for them as well. Right.

Some people I know don't educate them to like we talked about education before. If they don't understand why the profit is important. You know, I have my undergrad in business and my MBA.

So obviously, I've lived this stuff for quite some time, but not everybody gets it. They don't get that. Hey, I'm not trying to be big brother ish.

I need you to put time in. So we understand if we're charging enough. So we understand if we can, you know, I don't think a lot of MSP owners take the time to educate their team the whole way down to the importance of that.

And then I would just say, With like sort of the tools and tricks just Being transparent about it like that and being able to just make it easy. And if there are obstacles to them easily getting an accurate understanding Overcome those make sure that you're having an open conversation of like, hey, why are we not doing this, but, but thinking about you started to say You know, not tracking for like, oh, well, we didn't like enter that that laptop that we sold and we didn't, we don't have the prices right on that. The other thing too.

In whatever software you're using. You should have the ability to put on some sort of burdened rate into your team's hourly rate. Or at least calculate that post tracking time you've got to understand what are there, you know, If you put a bird and understand if you put a burden rate in whether it has the sales and general expense and that kind of thing, or it doesn't just Be aware of what you are keeping track of in that burden rate in your software and what you are not Or if you're doing a burden rate at all.

Are you just saying flat. This is what we pay them and I'm going to have to add in, you know, the employee, all the rest of it later, like the benefits and all that sort of thing.

[Uncle Marv] (39:42 - 40:02)
Alright, so let me ask you this because I have my thoughts on burden rate. So let's first let's define it for people who may not know may not have heard that term. And how do you calculate burden rate based on whether it's an engineer, a tech, an owner, that sort of thing.

[Melissa Hockenberry] (40:03 - 41:42)
Yeah, so burden rate the way I have always, I've always thought of it again. It's, I think there's very specific accounting terms, but usually I've told people that if at a minimum, they can get salary and benefits in there. That's a great start.

Like, hey, we know that we pay on this. And in general, everyone's insurance costs us about 40% more than their pay or whatever. You can go further and be like, here's the expense of the building and the expense and everybody's going to carry a bit of that right and that's the true burden rate.

I can't say often enough that in my first year to a business. The phrase perfect is the enemy of good Is so true. And I find it to be true for myself.

I find it to be true for MSP owners as well. Get closer. Right.

You might not get perfect. But if you're shooting for perfect in this and you just choose to not try at all because you can't get perfect. You're so much farther off.

So if you can get salary and the rest. Now, yes, for owners. I don't see a lot of executives or owners tracking time.

So you got to just figure that in at the end kind of thing. But if you are tracking time then should still have the benefits and things you just need to be consistent. You can't say, well, that for this group of people.

We do add this in. But for this group of people. We don't Because in the end, you've got to know this is accounted for in this number, and this is not accounted for.

So document what you're accounting for. And then if you need to at the end kind of take time off or dollars off the what you think is gross profit, then that works as well. But, but don't get caught up in it being perfect.

At least get closer is always what I would say.

[Uncle Marv] (41:43 - 42:49)
So yeah, I do. So I don't know how much I do this compared to everybody else, but I try to put as much into my end point rate as possible and my hourly rate so that, you know, my salary, because, you know, I could work 100 hours a week. I'm not going to pay myself more, even though I should Profit first, but that has to be in there based on a full time hourly salary.

So that's in there. I do put in the cost of the building. I put in the cost of my tools, my software.

I even put in the cost of my, you know, travel when all that stuff is broken out so that I know that, you know, if I have to send one of my, you know, contractors out, or if I have to go out myself, we know what the costs are for me, you know, to be on the road to be at, you know, at a client versus whether I'm here at the office doing everything online.

[Melissa Hockenberry] (42:49 - 42:53)
Good student. You are a good student. Yes.

[Uncle Marv] (42:53 - 43:02)
Because those are two different rates. Because you can't, you can't be making money if you're out on the road. But if you're in the office, you can make multiple streams.

[Melissa Hockenberry] (43:02 - 43:30)
Yes, yes, absolutely. And it just is important. And some people say, well, I'm not interested in charging those things.

So I don't know why I have to figure it out. You just need to know it because you need to know it. It's an element of your business does not mean you turn around and charge it, but it does mean that you may turn around and decide to do a contract increase.

In the coming year or start at least to have the conversation about that. Right. I just think it's you don't need to charge it, but you need to know it.

That's the key thing. Yeah.

[Uncle Marv] (43:30 - 44:08)
I want to throw this up here real quick, Nathan, and I hope he's still there. But when we were talking about when you were talking about the profit sharing, Nathan wrote it also helps bring it in. If there is some sort of profit sharing a bonus on profits really brings it home.

So that was something I was going to talk about where. Letting the employees know that, hey, it's not just profits that we're talking about, we're talking about bonuses at the end of the year, we're talking about a company picnic, we're talking about, you know, lunches that we give, you know, every Friday or stuff like that, that all plays a part of it.

[Melissa Hockenberry] (44:08 - 45:29)
Absolutely. I my favorite story is I did some professional services, probably over 13 years ago, I was on site with a client and they were talking about how they really thought their team was maxed out. And they had done you know they were doing their absolute best and then they threw a bonus out there that if they could get 30% more time tracked, they'd get a bonus on top of that and every single person found 30% more time.

It just tells you, I mean, it's a little disheartening because you're like, wait, we thought we were really busy, but I think it's looking at those things and also remembering what can I take away from people that, you know, AI can do like thinking about automation and things like that, that my team can do smarter work and more valuable work that will automatically make us, you know, I shouldn't say automatically, but will help with our profitability because we're, we're not the little stuff we used to say we had to do we don't have to do anymore, but I love the statement of the bonuses. I think a bonus structure is really good because then it requires you to have the conversation. And always that bonus structure should be on net profit recently talked to an MSP president who it's coming off a gross originally and I'm like, oh heavens no.

Heavens no. Talk to your accountant before you build your, your bonus structure I'd add that to that great comment talk to your accountant as to how it should be structured.

[Uncle Marv] (45:29 - 45:30)
That's interesting.

[Melissa Hockenberry] (45:31 - 45:31)
Yeah.

[Uncle Marv] (45:31 - 45:46)
What about those MSPs that build that into their annual plan, like that's not that you can make it a light item, but they assume that in their pricing, you mean that they're that they're going to get a bonus or.

[Melissa Hockenberry] (45:47 - 46:23)
Okay, then yeah then I think it's, that's less of a bonus plan to me than just a salary perk. I'm sorry, you know what I mean because a bonus plan is really like we got to see where we go. Right.

And if we don't make it we don't make it now, you should be accounting for it like you should say if we get here, here's that extra expense because I promised this bonus but it shouldn't necessarily be a no matter what, and then I always like to cushion and say like hey this is that that stretch goal. But if we get to here I'm going to really happy and I can still play that pay that bonus out, it's going to mean we worked hard but I want to give them a stretch goal or whatever.

[Uncle Marv] (46:25 - 46:31)
I just had a flashback. Pleasant. Well, it wasn't me it was one of my clients.

[Melissa Hockenberry] (46:32 - 46:32)
Okay.

[Uncle Marv] (46:32 - 47:48)
That they got used to bonuses, or the expectation of a bonus. And I remember growing up in the day where a bonus wasn't something you could expect it was if we did well. We will give you, you know, extra above and beyond because we went above, but this was probably 10-15 years ago, where people just were like, well, we assume that there's money there that I'm going to get a bonus and I remember an employee at the Christmas party, getting their bonus check and literally having a fit.

So much point and then. So this, this, this client learned. We don't give out bonus checks, after the drinks have been given out.

We give them either early in the day or the day after or something like that because he had had a few drinks and he was just not happy with his bonus and went berserk and they were like, dude, we didn't have a great year. You're still getting a bonus, you're still having your Christmas party.

[Melissa Hockenberry] (47:49 - 48:55)
Yeah, yeah, it's, um, you know, I love that such wisdom there you hand out the checks before the alcohol. I, I, it is true and I think you're right like you do have to. I know people that are like oh I just people who have already spent it right like oh yeah, I'm going to get and I'm, you have to be really clear that it's a variable number that could be could be zero.

If you don't get where you need to go and it's, and that goes to the education point of like hey guys I'm not trying to withhold money, like if we have it to give you know I'm going to give it, but I also think you can't use bonus as a way to make up for just paying your team, what they're worth like knowing the market value where you are and, or in this day and age, you know, across the US almost but, but being able to understand that and being competitive in your salary and, and that's where things like peer groups you're talking about the profit peer group but that's where peer groups come into play. And they're so helpful with that because you can have an honest conversation with a group of peers. You're in a group and can actually have, you know, those NDAs and you're not going to, but you're talking about what do you pay and what do you do and when you start in that, because it's hard otherwise.

[Uncle Marv] (48:55 - 49:19)
Yeah, and another flashback and this one is on us, expecting tax returns or tax refunds. So, I will say just enough to not get myself in trouble. But when you are an S Corp and money passes through taxes flow through a lot differently as well.

[Melissa Hockenberry] (49:21 - 49:26)
Yes, yes. Yeah, and you got to know that when you make that change right. Yeah.

[Uncle Marv] (49:27 - 49:28)
That's all I'm allowed to say.

[Melissa Hockenberry] (49:29 - 49:31)
We'll keep it at that.

[Uncle Marv] (49:31 - 49:48)
Yeah. But the profit builder peer group we will actually chat about that if you are early in your stages of a business and you want to make a change or you started out as an LLC and should you switch to an S Corp or something like that. That's going to come up in that discussion.

[Melissa Hockenberry] (49:49 - 49:55)
That's awesome. That's really valuable information, because a lot of people don't know that know that trigger where they should go. That's great.

[Uncle Marv] (49:56 - 50:02)
Speaking of peer groups webinars, blah, blah, blah. You also have one that's coming up.

[Melissa Hockenberry] (50:02 - 51:09)
I do. I do this Friday. Yeah, so Friday, March 14 at 11am Eastern.

I have one that's called inventorying your customer retention efforts. So it's a free webinar to help MSPs understand like where are they kind of on the maturity or the continuum of things. We're going to talk internal efforts, external efforts, we're going to talk about some metrics you should know.

But the goal is that it's an hour long webinar. But really, I've about a half hour of content and I want it to be action and I want it to be active and I want them there to be questions and us to work through so that when you come out of that webinar. You do you actually have a little list of like, oh yeah we check that box we check that box.

But while we're missing here, here and here and so that you can take it away and say this is where I think we need to get started or go to your team and say let's tackle this one thing. That we're not doing. I think there'll be some surprising things that people don't necessarily tie to customer retention.

We actually have a good bit of internal items that we talked about and I don't think people think about the retention element of how your business is set up.

[Uncle Marv] (51:09 - 51:25)
So, all right. So I put the link in the chat here if you're watching on the video if you're listening to the audio it is in the show notes. And because this is date sensitive.

This is Friday, March 14 11am.

[Melissa Hockenberry] (51:44 - 52:08)
I know I know it's my logo. I have a really a wonderful young man who'd made my logo and the eyes upside down and so there's dots that connected and I thought, you know, this is a great idea. You know what, and it was kind of funny and I like the phrase and I had a conversation early, probably two years ago now and I had someone said, you're really connecting the dots for me and I was like, that's cool because I already do that.

So I'm glad to hear that's the case.

[Uncle Marv] (52:08 - 52:26)
There you go. All right, well, Melissa, um, let's see we got off to a rough start but I think we, you know, settled in very well and did a good recap. I've got pages and pages of questions I could have asked but I think we covered everything well.

[Melissa Hockenberry] (52:27 - 52:29)
Great. Thank you. I appreciate the time and the opportunity.

[Uncle Marv] (52:31 - 52:45)
Let's see here. Oh, you know what I was going to ask you. Hang on.

Okay, you're going to love this. Oh my okay Let's see, it is.

[Melissa Hockenberry] (52:48 - 53:05)
Where did I put it. Fearful now. Is it one that you came up with or one that it's that it's the stump the chump.

[Uncle Marv] (53:05 - 53:07)
Oh, I left it in the other room.

[Melissa Hockenberry] (53:08 - 53:10)
I might be spared.

[Uncle Marv] (53:10 - 53:24)
No, it was, it was about. It was about the saying that your mother gave you Compliment in your head. Yes.

Great question to follow up for that.

[Melissa Hockenberry] (53:24 - 53:29)
I'm more than happy. I mean, it's been one of those nights if you want to run over and get it. I'm here.

It's not a problem.

[Uncle Marv] (53:30 - 53:35)
That's okay. Probably all over the place. They'll probably be like, he's gone again.

[Melissa Hockenberry] (53:37 - 53:41)
Well, both of us are just randomly leaving to just see if people are paying attention.

[Uncle Marv] (53:41 - 53:42)
So, there we go.

[Melissa Hockenberry] (53:42 - 53:47)
Well, we can always you can always send it to me and I'm happy to write a little blog answer for you that you Yeah.

[Uncle Marv] (53:50 - 54:22)
Okay. Well, ladies and gentlemen. It is that time Florida man versus the world where the sunshine state unique blend of chaos and humor takes center stage.

And with my recent trip to Florida man games. Ah, it was fantastic. So, Melissa has already mentioned the fact that she has what she thinks is a great story.

So sit back and relax and let's take a quick journey into the joy that is Florida man.

[Melissa Hockenberry] (54:23 - 55:45)
So, so my job was to find something local right and I happen to have a connection to the state troopers here locally. And so I asked that question like where's that ridiculous, you know, could be a Florida man story and mine's pretty concise actually. And it does have a term that not everybody might be familiar with because I certainly didn't know it but in the if I need to hopefully how I tell it, you'll get the you'll get the gist of this phrase but Person had been apprehended.

And obviously, the first thing is to sort of search for anything that they should not have. And in this apprehension. They decided to start to do a search and the person had taken fentanyl and they had stuffed it in as they call it their prison wallet.

You don't know what that is. That's a place you would not want to be stuffing things And when they threatened the cavity search the person pulled the fentanyl out and ate it. That was my exact reaction.

I was like, oh, that's disgusting on so many levels. So, um, that's the best I have for Florida, man. I think it doesn't necessarily rival the people who drive excavators into Walmart's but it's pretty not intelligent.

[Uncle Marv] (55:45 - 55:50)
That's a good one. But there's no link I would have a good link for that story.

[Melissa Hockenberry] (55:51 - 55:54)
Is that that story hasn't hit the wire.

[Uncle Marv] (55:54 - 55:55)
Okay.

[Melissa Hockenberry] (55:56 - 56:06)
That's an inside story. So when it does, if there's a police report, I will be certain to send it to you for the validity of the story. It might not have all the details, but it might.

I don't know.

[Uncle Marv] (56:06 - 57:05)
Nice. So I had a bunch of stories to choose from this week from people threatening to blow things up people getting escorted out of the Florida man games. Surprise surprise.

But this story. I decided to go a little mild this week, a 22 year old Florida man identified as Justin Riera was arrested over the weekend after striking a Tampa Police Department horse named Mount Opus during patrol in Ybor City. And this was an incident that happened as bars were closing and mounted officers were clearing crowds from the area.

There is body cam footage, and I will have the link for that. And the officers are telling him not to touch the horse and Riera actually decided to punch the horse.

[Melissa Hockenberry] (57:06 - 57:14)
That's I don't know how Florida law is, but that's assaulting an officer in the state of Pennsylvania canine or horse. I mean, they're all sworn in as officers.

[Uncle Marv] (57:14 - 57:41)
So under Florida law police animals like horses and canines are protected and any intentional harm to them is treated as a felony offense. The footage actually shows about 35 seconds of a chase where they were chasing this dude through the crowd on the horse, and he got arrested. And incredible.

[Melissa Hockenberry] (57:41 - 57:58)
That is amazing. I have to tell you when you said I didn't know the Florida man games existed, and I have my daughter's friend is huge Florida man fan and I said I think you need to put this on your bucket list to attend the Florida man games, so it will it will be happening next year for sure.

[Uncle Marv] (57:59 - 59:20)
I wasn't going to say this earlier, but I will already be back. So this year, this was the second year that it was taking place. It was in a different place last year moved to the fairgrounds to have a bigger location.

So many people showed up, met some great people there. So I was there as a podcaster, but I wasn't there as a full member of the press. Okay, so I should probably put the link in the show notes to the video that I made.

I did record several, several interviews there. I can only use about half of them. So, what you see on that video are the ones that I could put on there, as well as some of the pictures and stuff.

And next year they're going to allow me to go back as a full member, which means I can actually be inside the ring at some of the events because it was, it was like a rodeo, to some degree, so I couldn't get in to see a lot of the stuff. And in the beginning, a lot of people were crowding so that the people in the stands could not see. And they actually had to say, okay, they had to put barricades up and make the team members all stand back so that everybody could see the games.

They had a big, huge field. There was a tractor race.

[Melissa Hockenberry] (59:20 - 59:21)
Oh my gosh.

[Uncle Marv] (59:23 - 1:00:05)
Yeah, a lot of stuff there. And what's even worse, I didn't make it all day. I was, I got about halfway through and said, all right, I'm good.

I missed half the good stuff. So next year, well, so what, so what happened was, we were reading all the rules and they're like, don't bring this, don't bring that. I didn't know what I could bring.

Apparently, I could have brought a whole tent and set up and stuff. So I just brought a table and a banner. Yeah.

So we were out in the sun and my wife was with me and we didn't bring chairs to sit down. So next year, we're going to have to bring a whole setup and everything. And it'd be pretty good.

[Melissa Hockenberry] (1:00:05 - 1:00:08)
You'll make it the entire time and you'll have the inside scoop.

[Uncle Marv] (1:00:08 - 1:00:09)
Yes, we will.

[Melissa Hockenberry] (1:00:09 - 1:00:11)
That's awesome. That's awesome.

[Uncle Marv] (1:00:12 - 1:00:28)
All right. Well, Melissa, thank you for participating in Florida, man. That was a very good story.

That rivals some of the live PD episodes that were taking place a few years ago.

[Melissa Hockenberry] (1:00:29 - 1:00:29)
Yeah.

[Uncle Marv] (1:00:29 - 1:00:40)
And I'm surprised that I'm going to tell people in a couple of weeks about some of these live PD-like shows. We've got some stuff in the works.

[Melissa Hockenberry] (1:00:41 - 1:00:41)
Fine.

[Uncle Marv] (1:00:41 - 1:00:42)
For the IT Business Podcast.

[Melissa Hockenberry] (1:00:43 - 1:00:45)
I think that deserves a stay tuned, right?

[Uncle Marv] (1:00:45 - 1:01:13)
Yes, that's definitely a stay tuned. So, all right. So, Melissa, so again, your website FTFTAC.com.

First things first, training and consulting. And I can read this again as you have it there. Connecting the dots to help MSPs retain customers and revenue.

Thank you very much for being with us on the show tonight.

[Melissa Hockenberry] (1:01:13 - 1:01:15)
My pleasure. Thanks for the opportunity, Mark.

[Uncle Marv] (1:01:15 - 1:01:52)
All right. And for those of you that made it here, thank you very much. Thank you for your persistence in finding the show after our misstep in the beginning.

We will be back with another show next week. And I've got a couple of audio shows and all of that stuff. But thank you all for hanging out.

Be sure to subscribe at ITBusinessPodcast.com and do all the other stuff there, like support our sponsors, shop on Amazon, donate if you want, and help me keep bringing these shows to you. But that's going to do it for tonight. We'll see you next time.

And until then, holla!