Discover Double-Digit Revenue Growth Selling Healthcare IT Services

By The Business Solutions Network

After joining a peer group and ramping up its marketing, this MSP gained clarity into the best new growth opportunities.

Holston IT co-owners Alison and Tim Meredith found that hiring employees to take over some of their responsibilities was a necessary first step to enabling them to find new growth opportunities in healthcare.

Photo By Tim Schermerhorn

Since its inception in 2008, managed services provider (MSP) Holston IT, which is co-owned by Tim and Alison Meredith, has strived to differentiate itself from its competitors. Initially, the company focused primarily on providing quicker service response times and hiring technicians whose people skills matched their IT knowledge. These things helped, but ultimately they didn’t automatically translate into revenue gains. “It is easy to get so caught up doing the day-to-day activities of installing computers and upgrading servers that you neglect bigger picture activities such as vetting new technology offerings and expanding into new markets,” says Tim.

He and Alison attribute their decision to join a business mentoring group a few years ago as playing a key role in sparking new growth opportunities. “We started meeting with other IT business owners, and they challenged us to spend less time working in the business and more time working on it,” he says. “One change was hiring more employees to take on some of the tasks we had been doing previously — not just IT tasks, but other tasks, too, such as billing, payroll, and other operational tasks.”

Turn Your Happiest Customers Into Salespeople
Holston IT now has four part-time employees on payroll that handle many of the activities Tim and Alison used to do. One of the first big changes this led to was enabling Alison to focus on developing a marketing program for the company. “Before a prospect makes the decision to give you a check, the only data they have to judge whether that decision is going to be worthwhile is their experience of your marketing and sales processes,” she says. “One way we’ve learned to instill confidence more quickly is by presenting prospects with testimonials from happy clients that we have helped to overcome similar business challenges.”

About once a month, Alison conducts an in-person interview with one of Holston IT’s clients. “Afterwards, I compile their comments into a one-page article that I use in our newsletter and other drip campaigns such as email blasts,” she says. “After years of doing this activity, we now have nearly 30 full-length success stories with specific feedback on dozens of business challenges we’ve solved for our clients.”

The MSP also uses the success stories to overcome objections and identify trends. An anecdote that illustrates the first benefit is a recent managed services win with a local 50-user public library with two locations. The library, which is run by a board of directors, was looking to hire a full-time IT person after its previous IT person’s resignation. Alison knew that Holston IT could provide what they needed. She reached out to them and began a months-long process which culminated in her leading part of a board meeting. “After asking them about the most important traits they were looking for in an IT person, I wrote their answers on a white board and helped them narrow the list down to the top three traits, which were described in three keywords: fast, polite, and competent,” she says. “I could have predicted those responses ahead of time, but I’ve learned that it is important for prospects to verbalize their requirements rather than having someone tell them.”

After identifying the library’s most important needs, Alison told them her company could provide a managed service that would exceed the services a full-time IT person could offer and cost less. Next, she backed up her claim by presenting the board with customer testimonials that highlighted the three keyword traits identified earlier. “Shortly after that meeting, we won a managed services contract with them, and they’ve been a happy client for nearly two years,” she says. “Having testimonials readily available played a key role in aligning our value with their business needs and winning their trust so quickly.”

Sell More Services To Your Best Customers
key insights and trends. One example emerged from the MSP’s medical clients. “Our best testimonials came from our medical clients so we decided to explore growth opportunities in that market first,” says Alison. “The HIPAA omnibus rule, which came out September 2013, was a key driver, too, because it brought healthcare business associates, including IT providers, under the same compliance requirements as the healthcare companies. We felt confident our clients’ data was secure, but we weren’t sure they were fully HIPAAcompliant.”

To get up to speed, the MSP joined a local Medical Group Managers Association and began actively attending and participating in member meetings. “We’ve learned a lot from this association, including industry lingo, how the decision-making process works, and common business challenges,” she says. “A medical practice’s IT hardware and networking needs aren’t very different from those of a law practice or an insurance company, but healthcare providers perceive their needs to be unique. And, the way I explain how our technology helps them meet their business needs is unique.”

One of the biggest obstacles Holston IT runs into when prospecting healthcare providers comes from office managers. “Medical practice managers are rarely the final decision makers, but almost always the initial point of contact. They often go to great lengths to insulate doctors and other board members from speaking with us,” says Alison. “That means the decision makers don’t hear our presentations and can’t ask us questions; they only want to see a proposal. The manager wants great service. The doctors want cheap prices. Crafting a proposal that addresses both of these concerns is challenging.”

One way Holston IT overcomes these challenges is by providing prospects with a free consultation to show them where they stand regarding three common gaps in HIPAA compliance. This exercise helps establish the MSP as an expert, which makes gatekeepers easier to work with, and often leads to billable activities such as risk assessments. “To best serve our clients while also maximizing our margins, we chose not to hire a HIPAA expert or even to invest time and money training one of our existing employees to become a HIPAA risk assessment provider,” says Alison. “Instead, we partner with a company that provides this expertise to us and our clients.” (See the sidebar on page 16, to learn more about Holston IT’s partnership with HIPAA Secure Now!.)

“We felt confident our clients’ data was secure, but we weren’t sure they were fully HIPAA-compliant.”

Alison Meredith, co-owner and marketing director, Holston IT

 

Make Security Your Sales Litmus Test
Holston IT’s growth in the healthcare vertical has led to additional growth in other parts of its business, too. Specifically, the MSP is much more proactive about security-related topics. “We no longer wait for customers to approach us about backing up their computers or encrypting their data; we know it’s something all companies need so we address it up front,” says Tim. In fact, the MSP uses a prospect’s attitude toward security as a litmus test for forming a long-term business relationship. “Companies that don’t value security tend to be the same ones that complain about pricing and become a drain on our labor resources and profit margins,” says Tim. “We can make more money with security-minded companies and develop longer-term managed services partnerships with them.”

Growing its managed services revenue hasn’t come without its challenges, too, however. There is a lot of up-front effort that goes into establishing a new managed services client, and it can be several months after an initial engagement that the MSP starts seeing a positive cash flow, he says. “We’ve learned to offset this lull by asking for cash quicker and not accepting 60-day payment terms,” says Tim. “We also restrict how many new managed services clients we bring on each month. We can comfortably bring on two new clients a month without a problem. That’s what we’ve been doing now for nearly two years, and it’s working out well. Last year our revenue was up nearly 60 percent over the previous year, and this year we are projecting to beat last year’s numbers by more than 20 percent.”