From Stagnation to Soaring Profits: DenaliTEK’s Path to a 1,100% Net Profit Increase

Todd ClarkMSP Marketing

In the late ’70s, my father arranged for me to work on a salmon seiner in Cook Inlet, Alaska. Barely a young man and from the city of Anchorage, I wasn’t the ideal deckhand. A turning point for me was when my uncle, the skipper and owner of the fishing boat, yelled at me like a drill sergeant, “Grab it like you own it!” He was referring to the fishing net that had to be partially hauled in by hand. From that day forward, I excelled as a deckhand for many years and, one season, ran the operation as the skipper maintaining our “highliner” status. Twelve years of lucrative fishing helped me pay for college and to stay ahead financially.

In 2001, my wife and I made the bold move of opening our own IT services business. I had many ideas I wanted to implement, but the drive behind this new business was financial freedom. We dreamed of having the freedom to take vacations and retire at 55 years old. Roll ahead 21 years, and we were weary of having too few vacations, long hours, employee issues, constant stress, and no idea how to fund the retirement lifestyle we dreamed of. We were past 55 years old and wondering what we had done with the most productive years of our lives.

We were full of excuses about things out of our control:

  • Alaska is a small marketplace (Anchorage, our largest city, has a population of less than 300K).
  • It’s very difficult to hire technical talent in Alaska.
  • Alaska had been in a recession since before Covid.
  • Covid.
  • Often our productive employees move out of state.
  • It’s cold outside.

One of the financial metrics I started paying attention to is the “Rule of 40.” This metric is one of many methods used to quickly assess the value of a business. Simply, the sum of the net profit percentage and the year-over-year growth percentage should be above 40. Our Rule of 40 sum was an even zero.

At the beginning of 2022, we had lost our largest client and, while we managed to make a financial comeback, we felt like all we had created in over two decades of work was a pair of stressful jobs. Although I had been using the Technology Marketing Toolkit for many years, I realized I hadn’t “grabbed it like I owned it,” as I was taught as a young man working on a commercial fishing boat.

Taking Action

One day when I was on a call with Robin, she was looking over my numbers on the Dashboard. I was reasoning about how my business development was on the right track, and she wisely pointed out I had a serious profitability issue and that should be my priority.

In Q4 of 2022, I took advantage of being a member of the group to visit Robert Herjavec at his Security Operations Center in Kansas City. The opportunity to interact with Robert about specific details and struggles with our businesses was as enlightening as it was inspirational. I decided it was time to “grab it like I owned it.” I started to take advantage of the many opportunities right in front of me as a member of the Producers Club.

Increasing Prices and Profitability

Thinking about Robin’s advice, I realized we hadn’t raised our prices in a very long time. Not only had Robin spoken many times about raising prices, but she also led by example. I studied Robin’s approach and crafted a series of e-mails to be followed up with phone calls to implement strategic price increases. We raised some clients more than 15%, and we provided more perceived value in the process. Nearly all clients were receptive, and we had very little attrition. We ended 2022 with an average all-in seat price of $136.33. By the end of Q1 2023, we had increased our average all-in seat price to $153.11, more than a 12% increase that goes straight to net profits.

Next, since our most significant cost is labor, I made the bold move of firing our underperforming vCIO. I promoted our overperforming administrative manager to the position of operations manager. This eliminated about $100K of labor costs and freed me up to grab the vCIO role “like I owned it.”

Quarterly Business Reviews (QBRs)

Coincidentally, the Q1 2023 Producers Club theme was Quarterly Business Reviews (QBRs). Tired of poorly and inconsistently conducted Quarterly Business Reviews, I personally conducted 34 full QBRs. This was 100% of our clients and included a QBR of our company as well.

Instantly, we had better relationships with our clients, resulting in:

  • More referrals
  • Significantly more project labor
  • More product sales
  • Better client stickiness
  • Fewer day-to-day reactive tickets

Trust-Based Marketing and Cybersecure Alaska

The Q2 2023 Producers Club theme was trust-based marketing. In 2022, I had already set the groundwork. Since Alaska has had nearly the worst rate of cybercrime on a per capita basis, I had started to develop the Ransomware Survival Kit to help our local business community. Robin and her team picked up the project and turned it into an excellent prospecting tool. Meanwhile, I recruited a handful of local business leaders to create a nonprofit organization with this vision:

“For Alaska to have the most cybersecure business community in America.”

Cybersecure Alaska was born. With a little hard work, this new nonprofit had grown a life of its own. It started with a board of five. Interest in our vision and approach grew so much that last year we revised our bylaws to accommodate a board of nine with regional representation. As founder and president of Cybersecure Alaska, I was able to appoint a local business leader to book speaking engagements for me, developing my celebrity and authority, as well as trust in our business community. After each speaking engagement, I asked for a testimonial as a speaker.

Yes, as CEO, vCIO, outside sales executive, marketing manager, janitor and now president of an up-and-coming nonprofit, I was busy, but I was starting to see results. We were already seeing better profitability due to reduced labor costs, higher recurring revenue, more project labor, new logo clients and more product sales.

Insurance Joint Ventures and TMT 5-Step Sales Process

The Q3 2023 Producers Club theme was insurance joint ventures. This one was easy for me since I had already worked the cyber insurance topic into my Cybersecure Alaska presentations. I had also already formed relationships with a few insurance professionals. Talking with our clients about insurance and, in particular, compliance with their insurance policies, I sold several projects related to meeting the requirements of their policies, and I strengthened my relationship with clients and insurance professionals.

The Q4 2023 Producers Club theme was the TMT 5-Step Sales process. Over the year, I realized that not only was my closing ratio poor but also I didn’t have enough first-time appointments (FTAs). This, of course, was having an impact on our new business development. The Ray Green and Sitima Fowler sales training and the process are exceptional. In Q4, I completely rewrote my sales playbook. I realized after debriefing several lost sales that I should have followed the process sooner.

Improving Appointment Setting and Prospect Lists

Taking a hard look at our lack of FTAs, I realized I needed to “grab it like I owned it.” First, I was tolerating a mediocre appointment setter, so I decided to replace a full-time appointment setter with two part-time appointment setters. In the process, I developed a method that attracted over 600 applicants in two weeks and, more importantly, quickly and easily narrowed the applicants down to about a dozen that I could do appointment-setting role-play with. In preparation for hiring the appointment setters, I had to develop training that was both effective and didn’t take too much of my time. This has resulted in consistent and higher-quality FTAs. Having two part-time appointment setters – and the ability to rapidly hire and train another – gives me consistency and allows me to manage for much higher performance.

Next, I realized my list of approximately 800 businesses in my target market was not enough. Thinking we had to settle for only 800 was my own “head trash.” We had used several paid services to build our list. One of Robin’s principles is to know the size of your marketplace. I realized we only knew how many names we could buy on a list. I went to the State of Alaska and obtained the current business license database. This was a very raw database. With a lot of work, I was able to build my list to over 1,400 prospects.

The Results

In 2022, we had $1.7 million in topline revenue and a net profit of 1.4%.

In 2023, our topline revenue increased by 32%. More importantly, our recurring revenue grew by 38%. Combining our revenue increase with our reduced (but more effective) labor costs, we saw our net profits increased by more than 11 times. Yes, a 1,100% increase in net profit! Our 2024 net profits are on track to exceed 21%.

Our Rule of 40 went from about zero for the entire year of 2022 to 46 for the entire year of 2023.


If you are falling short of your goals and succumbing to the same excuses that I was, there’s still time. Whatever your challenges are:

  • Employee issues
  • Vendor issues
  • Poor lists
  • Economy
  • Whatever…

“We Are Now On Track To Meet Our Life Goals!”

These were all holding me back. But while these are all obstacles, none of them will prevent you from being successful!

We are modestly projecting a 21% net profit for 2024, and our business valuation has grown substantially.

The Producers Club has all the training, materials, programs and coaching to get you back on track. Get rid of the “head trash,” start leveraging the resources and “grab it like you own it!”

I am well-suited to serve as a spokesperson, drawing from my personal experience as a business owner in the MSP industry. In 2022, I found myself mirroring the sentiments of a significant portion of MSP business owners – overwhelmed, mired in implementation challenges and not witnessing the anticipated results. This struggle persisted for several years, as I grappled with the same obstacles and excuses familiar to many MSP proprietors. However, a transformative shift occurred just over a year ago when I made the conscious decision to embrace a proactive mindset, seizing control of my circumstances with the mantra “Grab it like I own it.”

This pivotal change not only propelled me toward overcoming challenges but also ignited a profound desire to share my journey and insights with others. I am driven by a passion to empower fellow MSP owners and to offer guidance and inspiration to help them navigate through the complexities of the industry.

Becoming a spokesperson is not just an opportunity for me; it is a mission to foster a supportive community and contribute to the collective growth and success of MSP businesses.

Get more MSP growth strategies from Robin Robins, Dr. Jordan Peterson, Mike Michalowicz, and many more at this year’s IT Marketing Boot Camp.