From The Editor | May 11, 2018

Why Peer Groups Matter: Value For Everyone

Principal Financial Group

I spent a few days in Dallas last week with my friends at HTG. I try to attend as many of the group’s quarterly meetings as I can, because there’s no better place to become immersed in the MSP community. Honest and transparent conversations with the leaders of operationally mature—and actively maturing—managed services businesses are what direct our MSP Insights and Channel Executive editorial content.

But, the value I derive from the meetings is peripheral. By design, the bulk of the value is aimed at MSP peer group members. Not a single group member I’ve spoken with over the past year—and there have been dozens—has lamented their decision to commit to the experience. The experience, by the way, is neither cheap nor easy. Many of them credit the peer group for driving, if not saving, their success in business and in life. There’s value immeasurable in peer-driven accountability, both personally and professionally.

But the value exchange runs deep and wide at these quarterly meetings. It also benefits vendor peer group members, and the vendor sponsors that support these meetings. Let me share a few examples from my experience last week.

This visit was a bit different for me, in that rather than spending my time in HTG’s MSP peer group meetings, I was invited to present to one of its vendor peer groups. Run very much like HTG’s MSP meetings, about a dozen sales and marketing leaders from some prominent IT systems vendors comprised the group I sat and talked with.

At one point, three MSP leaders walked into the room and took chairs facing the vendor group. What ensued for the next sixty minutes was a no-holds-barred conversation about how specific vendors are doing their MSPs right and how they’re doing them wrong in terms of sales, marketing, support, and more. It was, at times, uncomfortable to witness. Never impolite but brutally honest, the MSP execs candidly called out vendors whose sales and marketing teams sat across the table for the inadequacies of their applications. Vendor representatives appropriately pointed out where user error or ignorance might solve a specific problem. There was great value exchanged as a result of the very transparency of the environment. MSPs and vendors alike walked away enlightened and armed with takeaways that would drive improvement.

Big Value For Vendors, Too

Aside from providing a venue for brutally-honest product feedback, peer groups can present the right vendors with an incredible sales and marketing opportunity. While there are typically strict rules limiting vendor exposure to members, particularly during member meetings, member groups can and do agree to allow vetted vendor representatives an opportunity to conduct “Lunch ‘N’ Learn” sessions. There are strings attached for the vendor – the sessions are supposed to be topical and informative, not commercial – but there’s a general understanding that if the group wants product information, product information is what they’ll get. In fact, well-prepared vendors enter Lunch ‘N’ Learn engagements with a prepackaged offer, typically a discount or free trial, in anticipation of the group’s interest.

I’ve seen firsthand the collective response of a group of MSP execs to a great offer from a promising application presented in this setting. I remember admiring the vendor rep’s restraint at not dealing contracts across the table on the spot.  This week, when I returned to the office on Monday, I received an excited e-mail from a vendor business development leader who’s relatively new to HTG. He had presented a Lunch ‘N’ Learn at the Dallas meeting. Within 24 hours of his presentation, he said the entire group had signed on.

If this business development executive and the application he sells do right by this group of MSPs, the company just found the proverbial barrel full of fish. Good solutions that yield measurable ROI or efficiency gains spread like wildfire in these settings, where transparency is the norm and help is the word of the week. One fan turns into a legion in very short order. Of course, that can work the opposite way, as well. Hence the thorough vetting of those vendors invited to the inner circles.

Still, the greatest return on the peer group investment belongs to the tech solutions provider exposed to the wisdom of—and subjected to the accountability imposed by—his peers. There are expectations. Those who can’t (read: won’t) meet those expectations don’t stick around very long. Those who will are rewarded with the best profitability and highest valuations in the industry.