VARs & MSPs: Just Say ‘No' To Bad Customers

By Abby Sorensen, Editor

When James Laszko founded Mythos Technology in 2010 he likely didn’t expect he’d be able to afford to fire the lowest performing 20 percent of his customers in 2018. But that’s exactly what he has set out to do this year. You can read more about his customer rightsizing initiative in the May 2018 issue of Channel Executive magazine. In the meantime, there is another side to the Mythos story: how to find the customers who are the right fit so they won’t end up on the chopping block a few years down the road.

Most VARs and MSPs think they don’t have the luxury of being picky about which customers they do business with. Hardware and software is becoming more and more commoditized, and clients are more and more willing to handle their IT services with only in-house staff. It’s easy to get trapped in to thinking that all new business is good business. Laszko, on the other hand, knows that not all customers are created equal. That’s why Mythos looks at more than just the ROI of a contract when evaluating the overall fit of a customer. Laszko is also very conscious of the fact that cultural fit is just as important for customers as it is for any of his new hires. Since Mythos new sales are primarily driven by Laszko, he was able to share firsthand experience about how he vets prospects to ensure they are the right fit.

Find Customers With Common Core Values

Short of performing a DISC assessment on the decision makers and leadership team of all new prospects, Laszko does his best to get a feel for a customer’s personality and character. “It really does come down to interviewing customers, just like we interview our employees,” says Laszko. “We always tell prospects when we first meet that this is just an interview for us. They’re going to be interviewing us as well, and we’ll look for some kind of a spark.”

Laszko wants needs his team to be actively engaged in growing his customers’ businesses, and because of that personality fit is a key. He’s fired customers in the past that treated his support team poorly. Mythos looks to establish a partnership built on trust and respect from the outset. It helps that most of the Mythos client base are companies with fewer than 500 employees, so his team can build relationships with their staff.

MSPs Need Some Degree Of Cookie Cutter, Even If Customers Disagree

Laszko understands MSPs need structure and process repeatability in order to scale. Along the same lines, he also understands, “At the end of the day, it’s the customer’s business and they do business their way. We’re a plugin for them. We’re going to be somewhat flexible from an SOP standpoint. But with contract terms and guarantees, we approach it as we’re the subject matter expert on how technology plugs into any business.”

Mythos spent years developing its service levels, pricing strategies, and vendor offerings. Without consistency, the business would have stalled. So when a prospective customer starts to butt heads during the sales process about what is the “best” solution, that’s usually a warning sign the relationship isn’t meant to be. Laszko points out, “We’ve got 20-something years of experience doing this, and we really think that our stuff is right. If they can’t trust us on that, then they’re not going to trust us on anything else.”

Look For Red Flags During The Sales Process

If the sales process with a prospective customer is painful, chances are the relationship after the contract is signed will be painful too. The biggest red flag is when customers zero in on cost, and cost alone. Becoming a trusted advisor as a technology partner is based on providing value, not selling hardware off a menu. The prospects who immediately compare your prices to those of their previous IT provider likely don’t understand the true need for your services.

“If we can’t reframe the conversation to be about business process outsourcing versus just IT, or just technology, or some guy named Fred who used to fix their stuff, then it tends to throw up a warning signal pretty quickly,” he says. Laszko constantly focuses on pushing a value-based sale, and to do that he tries to get as much face time as possible with prospects. It’s not always possible – or scalable – to share a beer with the decision makers at all prospects before signing on the dotted line. But that personal touch goes a long way in establishing an initial relationship.

Laszko says, “If there’s a connection on a personal level, we can overcome a lot of business hurdles, because there’s a true relationship where we’re striving to fix things. I’m honing my skills to figure out why certain customers are a wrong fit. That way when we’re selling to the next customer we know what the caveats are, what the red flags are, and can use what we’ve learned to help make that customer successful.”

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Company Background:

• Headquarters: Temecula, CA
• Number of Employees: 11
• Year Founded: 2010
• 2017 Growth Rate: 32%
• Geographic Footprint: Southern California
• Services Provided: IT consulting, managed services, VoIP, print management, business continuity
• Verticals: Financial sector, community banks, credit unions, CPA firms, construction