We Finally Broke The MILLION-DOLLAR Mark In Revenue! Even Better, Net Profit Is Up 24%!
We Started The Year With 2 Serious Problems
At the start of 2018, we had just come off a strong year with revenue up at $894,154 and our monthly recurring revenue (MRR) increased significantly at $16,415. Our goal for the year: to finally break the million-dollar mark in revenue. Having a goal is easy. ACHIEVING that goal is a whole different story.
While we wanted to hit that aggressive goal, we had to make sure that net profit did not slip. I did not want revenue for the sake of revenue but to add proportional profit to the bottom line. Upon review of what we would need to reach $1M a year, two deficiencies stood out: SPACE and LACK OF STRUCTURE.
The first obstacle was space. We needed to rethink our working environment. For years, we had been operating the business from a building behind my house. We had now outgrown that building. If we were truly going to be a $1M+ business, we needed a REAL home that allowed us to GROW.
By leasing an office building, we now have a place to meet with clients. Plus, I have my own office, the techs have a place to work as a team and we have plenty of space for future employees.
The second obstacle we faced was a lack of organizational structure. Because we were all doing everything, nobody was specializing in a particular area. It was time to put structure in place and change the way we worked.
Gaining “Traction” With Better Structure
At Robin’s 2018 Boot Camp, author Gino Wickman spoke onstage. Everybody in attendance received a copy of his best-selling book Traction. It was clear this book would help us to create the leadership and structure we needed to reach $1M.
On the long flight back to Australia, I read the book from front to back and had a picture in my mind of what our leadership team could look like. Once we had the leadership team in place, we wrote down the Vision/Traction Organizer (VTO), which meant we had a documented goal we were accountable for: $1.2M and a net profit of $156K.
Now, HOW Are We Going To Achieve These Goals?
First, the leadership team started meeting on a weekly basis. Their objective was to work through the agenda as recommended in Gino’s book and solve issues immediately so they wouldn’t fester. Next, we started reporting numbers on a scorecard we developed to hold one another accountable. I was responsible for the sales and marketing numbers.
I had to make sure I didn’t come up with a zero, which meant we needed to ramp up the process of finding new customers and selling to the low-hanging fruit, and continue evaluating our break-fix clients for potential managed services to grow our MRR.
Our Most Successful Campaign To Date
MSPs and IT business owners LOVE referrals. They are among your easiest leads to close, they tend to be among your best clients and they are often willing to pay more. However, too few MSPs actively run an incentive-based campaign. That’s exactly what we did.
Using this campaign, we actively seek referrals from our existing customer base on a bimonthly basis. I learned the RIGHT way to set up a referral campaign from Robin’s Producers Club. The key is to reward the customer for the referral without making it dependent on my ability to sell to the referral.
For our referral campaign, we typically offer a gift card to the movies. But we also like to mix it up and tailor the gift to the customer’s wants and needs, including Visa gift cards and bottles of Australian red wine (which comes from one of my customers, so it’s a win-win!). We can expect one or two qualified leads every time we run this campaign!
More Upsell Opportunities, More Sat Quarterly Business Reviews, Fewer Sales Falling Through The Cracks
We recently signed up for Robin’s Infusionsoft program. Boy, this has seriously changed the way we do things – all for the better, of course. Among the differences Infusionsoft has made:
- More Upsell Opportunities – We now communicate with our customer list on a monthly basis by sending TechTips. This marketing drives people to ask questions, which creates upsell opportunities in the areas of security and employee education.
- Sat 50% More QBRs – We also rolled out the quarterly business review within Infusionsoft. Because we no longer have to go back and forth with the customer in getting our calendars in sync, it’s saved us so much time. Plus, since implementing the QBR campaign, we have successfully sat 50% more QBRs than ever before. And we’re just getting started!
- No More Dropped Sales – While we are still very green with Infusionsoft, I can see how this will help our business and keep us accountable to ensure leads, sales and $$$ don’t slip through the gaps.
How I Overcame A FEAR To Land Our Biggest Monthly Recurring Deal
Fear. It’s amazing how this one emotion has the power to paralyze us and prevent us from reaching our goals. Over the past three years, I held on to a F.E.A.R. that was actually False Evidence Appearing Real. We had a long-term break-fix client that was the perfect fit for our managed services recurring monthly contract. Over the past three years, I had been trying to convince myself we had to do this. Instead, I always took the EASY OPTION, which was no action at all. My fear: If I showed my client a new (and better) way of delivering support, I would drive this valuable client away.
At the end of 2017, I finally presented to their CEO and CFO and outlined the future for technology in their organization. I went through Microsoft Office 365 migration, moving their database to an ERP, transitioning aging server hardware to the cloud, and finally I addressed my fear…introducing a new way to support their technology and users under a monthly agreement.
After completing the Office 365 migration and moving them to an ERP, the final step was to meet with the CEO and pin him down on the MRR agreement. We invited him to our relatively new office. Then I met with him one-on-one and said, “You know you need to sign up for this, don’t you?” There was silence for about 30 seconds, which felt like HOURS, and he looked up and said, “Yes, let’s get this done.”
This agreement will culminate in $12,169 in MRR. That’s our BIGGEST monthly recurring deal ever, and it almost NEVER happened because of my fear! Within the first week of signing onto this deal, they told us how much easier it was to get everything sorted. That’s because we removed the barriers of TIME = MONEY and allowed their employees to contact us whenever they needed help.
Simply by continuing to talk about converting to a managed services contract, we essentially engaged in a drip marketing campaign to this customer without even knowing it. Now my mindset has changed dramatically. If I can convert this customer, I can convert ALL of our break-fix customers. Which leaves one question: do we want all of our break-fix customers to become agreement customers? Well, that choice is MINE!
Year-Over-Year Growth 3 Years Running!
By December 31, 2018, we had broken the million-dollar mark in revenue! In fact, we brought in $1,053,486, to be precise. While we did not hit our goal of $1.2M, we increased revenue by 18% compared to 2017. Even better, we improved net profit by 24% and a massive increase in MRR by 112%! For three years straight, DSP Electronics GREW.
There is no doubt that without the continued support of Robin and the team at Technology Marketing Toolkit, DSP Electronics would not be in the position it is today. Not only is it providing advantages for myself personally and professionally, we are also making a difference in our community. We were recently fortunate to be a major sponsor of Relay For Life in raising funds for the Cancer Council. Plus, we were involved in the iCan Challenge, a 50-kilometre fundraiser walk for Melbourne’s Royal Children’s Hospital.