Welcome to the Rialto Marketing podcast. Today's episode is a revenue acceleration series interview where we talk to seven figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad and the ugly so that you can learn from their experience.

Join Tim Fitzpatrick and Frank Stephens for this week’s episode of The Rialto Marketing Podcast!

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Restructuring To Facilitate Growth

Tim Fitzpatrick
Welcome to the Rialto Marketing podcast. Today's episode is a Revenue Accélération Series interview where we talk to seven-figure B2B professional service firm owners that are actively trying to grow their business and get to the next level. We talk about the good, the bad, and the ugly so that you can learn from their experience. Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe you must remove your revenue roadblocks if you want to accelerate growth. And marketing shouldn't be difficult. Thank you so much for taking the time to tune in. I am super excited to have Frank Stephens from CTS with me today. Frank, welcome, and thanks for being here.

Frank Stephens
Thanks for having me.

Tim Fitzpatrick
Yeah, I'm excited to dig into this with you. I want to ask you a few rapid fire questions to just help people get to know you and kick things off. You ready to jump in with both feet?

Frank Stephens
Ready to go.

Tim Fitzpatrick
Okay. So very quickly, Frank, what do you do and how long have you been doing it?

Frank Stephens
We are We're an IT Consulting Group, focusing on managed IT services, cybersecurity, and application web development. We've been doing this for just shy of 22 years. So it's been a long and fun journey.

Tim Fitzpatrick
So it In those 22 years, what have you learned? What's the most important lesson that comes to mind?

Frank Stephens
The most important is a tough one to narrow it down to one. If I had to pick number one, it's the teammates and the people around me. Without them, the growth would be limited, and I would have probably a lot less hair and more gray hitters up there. But very close second is something of the few takeaways I took from college was cash flow, and that cash is king in managing the cash flow of the business. As a small mid-size business, that is definitely critical in all aspects.

Tim Fitzpatrick
I know that that is a tough question to answer because there's so many things that we as business owners and entrepreneurs. It's like a daily learning lesson. It's always hard to pull that out. But yeah, I love that. Man, we can't do it ourselves, and we can't go anywhere if we don't have the right people behind us.

Frank Stephens
Correct. Absolutely.

Tim Fitzpatrick
Yeah, I love it. We know 22 years, man, you've been through ups, you've been through downs. We know growing a business is hard work. If it was easy, everybody would be doing it.

Frank Stephens
Yep.

Tim Fitzpatrick
Do you have any mantra or motivational saying that you say to yourself or you share with your team to push through those times when you run into roadblocks?

Frank Stephens
Yeah. I mean, like every business, we run into our obstacles now and then, and there's definitely some challenges. So when this stuff comes in, I mean, I tell them, Hey, guys, we're smart. Let's take a step back, take a breath, realize that we're going to get through this. Tomorrow is almost another day. Let's identify the issue and start chopping it away bit by bit. And when people start to freak out a little bit less, no matter what the critical issue is, we get it done.

Tim Fitzpatrick
I love that. You know what? It's a great reminder because when something happens and if we get into this frantic state, That's never a good place to make decisions from. And so saying that helps you step out of it a little bit. You look at it and think about it a little bit more objectively to figure out what the best course of action is. So I love that. Thank you for sharing that.

The Concept of Obsessive Client Focus

Tim Fitzpatrick
So when we connected for the pre-interview, you shared the fact that your company has been built on this simple concept of obsessive client focus, right? And a lot of businesses talk about, Hey, our clients are our most important thing. It's funny that I'm asking this question because I saw somebody post in a group that I'm in a couple of days ago about, Gosh, so many people talk about client focus, and then when the rubber really meets the their actions don't communicate that at all. So obsessive client focus, break that down for us a little bit. What does it mean to you and what types of things are you doing to live that?

Frank Stephens
Yeah. I mean, day to day, what I do and what I preach to the team, and we do live by this, is there are tons of IT social providers out there and MSPs throughout. I mean, if you're in Chicago like we are, you could throw a rock and hit five of them. So what really sets us apart is that obsessive client focus. And the way we live by it is no matter if it's a small ticket issue, as simple as a pass or reset, or a compact large deployment with virtualization or moving someone to the cloud, we put ourselves in the shoes of the client. What is the experience that the client wants to feel? What is the story that they're going to be sharing with their other business owners and CFOs and CEOs? And so when you put yourself in their shoes, because we're all techs, right? And my whole team is tactical of nature except for admin staff, and they lose the focus of, hey, there's stuff besides the ones and zeros. And it's our client's business that's most important. And when you put yourself into their shoes and what they're expecting from that experience, from the end result, how fast we take a ticket, how do we gage something if it's more high priority or deemed critical? And that really helps my guys understand. And the way we operate then is something that it's an enjoyable experience for the end client. So it's actually taking the tech out of it and making sure that they're business operations, because at the end of the day, they don't care about a pass, reset, or multifactor authentication. They want to be profitable. They want to be efficient, and that's what they want to do.

Tim Fitzpatrick
Frank, that is such a cool distinction, right? Because I think a lot of people think about client focus and great customer service, but they're thinking of it more from their perspective. How can I do this? But when you put yourself in their shoes and you're more empathetic, the decision of what you actually need to do to address that becomes much simpler, doesn't it?

Frank Stephens
Yes, absolutely. You dumb me down. Just the other day, I was out for a quick story, but I love being out in the world. My family were at dinner, and we saw one of the servers drop a lemon off of this ICT, and no other servers cared, and it just sat there and I'm like to my wife, How long is that going to sit there? I try to tell these stories to my team all the time when we have our little rau rau. It's like, Hey, guys, if you see something that's wrong, just because the client doesn't see it or notice it or our alarms aren't going up, do the right thing. In the end, I think that's really going to be paying off dividends. We don't lose clients. It's because that experience that we give them.

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Incentivized Referral Program

Tim Fitzpatrick
That's awesome. You have a referral program. We're switching gears a little bit here. Referrals are such a low hanging fruit for most MSPs, for most professional service businesses. A lot of companies are getting referrals, but they don't have a system in place. They don't have a referral program.

Frank Stephens
Correct.

Tim Fitzpatrick
Can you share with us, how long ago did you implement your program? How's it working? What does your program look like?

Frank Stephens
Yeah, we probably implemented this probably four to five years ago. Prior to us doing some really organic and internal marketing and pushing out to new clients, just like any other small business, we grew by referrals. How do you manage that? How do you create a sales pipeline with referrals? One of our big verticals is accounting and law firms, and they're all tight knit group. And so they were giving us referrals, which is great, but can't control the process. So we developed an idea that essentially, if you are a current client and you're happy with this, obviously, as you would refer us, if you bring us another MSP client on a referral and they sign up with us, essentially what we do is we give you guys, we give that client a commission on it. So let's assume that I'm bringing in, let's say, a $3,000 a month MMR client, monthly recurring revenue client. That client, our client, if we do bring that in, they would essentially get three times MRR, which is super aggressive. So for our client, they're going to get $9,000 credit of IT services just for the referral. And it has been super...It works. We announced it all the time on our accounting and invoicing and all of our AR and AP, all of our things are tagged with it. Every single invoice that we have, it's got a little guy with a little announcement saying, Hey, looking to maximize your investment and get free IP from us. So we're constantly to our clients, and we probably get 8 to 10 leads a year. And these are not just BS cold leads. These are like, Hey, ready to talk to Sally. They're expecting you to call. Those are slam dunk opportunities for us. So It has been very successful.

Tim Fitzpatrick
I want to pull some stuff out here that you just shared because I think there's a ton of great stuff in here. One, the fact that not only are you paying a fee, a referral fee, it's significant.

Frank Stephens
It is.

Tim Fitzpatrick
So it's three months of MRR. Now, you can do that because you know the long term, the lifetime value of a client and how long people stay.

Frank Stephens
Correct. So my cost of acquisition might have a little spike in it. But if that client sticks around, again, for a decade, that referral fee It's nothing. It's nothing. So might as well do it.

Tim Fitzpatrick
So you're paying a little up front to get that lead, but those leads close at a much higher rate.

Frank Stephens
Absolutely.

Tim Fitzpatrick
They're already predisposed to working with you. And There's a huge incentive for the people that refer you to do so. The other thing that you noted, which is super important from a promotional standpoint, is you're talking about the program all the time. You're looking at ways that you can promote it throughout the customer journey, and you're just doing that. Because these types of programs, you don't just announce it and it becomes successful. It's the repetition over time.

Frank Stephens
Over and over. You have to.

Tim Fitzpatrick
And you put those things in place. So kudos to you. I love it. Your referral program is your system, right? So a lot of times when we work with clients and we talk about putting a referral system in place, a program, referral program can be part of that. But the system itself is just about identifying when you have opportunities where it makes sense to ask for referrals, when you've brought a new client on board, when are they at their most happiest? For MSPs, You touched on this, Frank. It's like you're serving support tickets all the time. When you've closed out a support ticket quickly and they're super excited and they're happy, that's a great opportunity to remind them or to ask them, to remind them about your referral program or to ask them for a referral. So it's identifying those points is how you put a system in place to do it consistently. It's still not predictable, but you can boost the number of referrals that you get throughout the year.

Frank Stephens
Absolutely. Like you said, they're absolutely deliciously warm, and they sell themselves in those cases, so it's nice.

Restructuring To Facilitate Growth

Tim Fitzpatrick
I love it. Thank you for sharing that. Now, the other thing you shared with me during the pre-interview was you had mentioned that you had restructured a few years ago. I'd love for you to break this down a little bit so that people can learn from that. One, what did you do from a restructuring standpoint? Why did you choose to do it? And then what's happened from that?

Frank Stephens
Basically, we grew the first, probably 17 years, double-digit growth every year, whether it be 15 to 20 or 40 to 50 %, we've always had steady growth. And in just talking to other MSPs and other business leaders and business consultants and how I want to continue managing the growth of the business as we Excel, I did want to lose that core customer service and great service and support that we were giving. So prior to that reorganization, people said, hey, you're a flat organization. What I mean by flat is there's Frank and then there's a bunch of techs, a bunch of developers, a bunch of cybersecurity guys. And so what we did was we actually, we became a real company, we joke internally. But essentially, I hired a general manager, and we created a proper flow chart and organization chart where there's now supervisors, there's now accountability within each department. But having that general manager where I'm able to now pass off a bunch of responsibilities that I had, I was wearing the big hat, right? With all that stuff, the accounting piece, the financial piece, the budgeting, all that I was able to take off my plate.

Frank Stephens
And so the benefits that I saw is my expertise is business development and talking to people. And also I'm obviously technical in nature as well. So I was able to take my true skillset and apply that to the business. And we're seeing even bigger growth. And it's a richer experience for the team. I'm able to get involved or get less involved depending upon what we're working on and what we're doing.

Tim Fitzpatrick
So that, prior to reorging, it was the buck stops with Frank. A lot of stuff was coming directly to you.

Frank Stephens
Correct.

Tim Fitzpatrick
With the reorg, you put buffers in place, if you will. It sounds to me like your general manager is really acting in a chief operations type role. They're overseeing a lot of the operational aspects of the business and managing those. Then below that person, there are super supervisors in specific departments that require it or need it.

Frank Stephens
Correct. So if you think about it, prior to the reorg, the layers of people from a standard tech, to me, it was either there are only one or two levels. The downside is there's some people that I rarely get to meet or interview that could join my company anymore. We had that this last year. I met them for my first time. Like, oh, you've been here for six months. Nice to meet you. The downside is we're losing that family feel to the business, but we're a stronger organization. So the way we are now is I'm at the top level. I have a general manager. We're that CFO, COO? Underneath there, under the three services that we have, now we have department heads. Then underneath there, there is actually senior and then junior people underneath those individuals.

Tim Fitzpatrick
How many people do you have in your company?

Frank Stephens
We have some people overseas as well, but total W2 and as well contract. W2, full-time FTEs and contract, we're around 20 people.

Tim Fitzpatrick
Okay, got it. The reason I asked that question is I think some business owners aren't quite sure, how many people do I need to have to start to do this? I think the reality is, as a business owner, if you want to take yourself out of the day to day, you need to hire somebody to to manage the business as quickly as you possibly can. But I want to pull something else out that you shared, which I think is critical. As you said, look, I'm great. You're tech, But you're really good at the dev side of the business. When you were where the buck stopped, you didn't have the time to devote to that. Now that you've pulled yourself out of it, you have time spend in the business where you excel, where it's the highest and best use of your time. And because of that, you've been able to generate even more business from that. And so, you know-

Frank Stephens
Correct.

Tim Fitzpatrick
I think when a lot of people look at making changes like this, they go, Oh, my gosh, I got to hire whatever, one high-level person or two or three, that's going to cost me X amount of dollars. But in the long run, it allows you to generate growth that more than pays for the initial investment.

Frank Stephens
Correct.

Tim Fitzpatrick
As long as you go into it with a plan, here's how we're going to do this, here's how we're going to execute on this. Then as the business owner, where am I going to shift my time so that we can continue to grow? It's the best of both worlds long term as long as you go into it with.

Frank Stephens
It is. But like you, I think, alluded to, it's a scary thing. As an initial business owner, as we were growing, I got work coming in and I'll hire a tech, and then that tech will pay for themselves. If you want a quality general manager, they don't make 30 grand. They make real money. It's like, Okay, can I absorb that? It's almost a leap of faith. If I give this person six figures, will they deliver and create the efficiencies within the organization that will pay for themselves as well as have me go out there and now close more deals? Knock on wood, I got it, and I found a winner, which has been amazing for the growth of the organization.

Tim Fitzpatrick
I love that.

Frank Stephens
But good It's a leap of faith.

Implementing AI tools within Sales and Marketing 

Tim Fitzpatrick
Let's talk a little bit about marketing. I know AI is all most people can talk about at this point. It is infiltrating all kinds of industries. You've implemented some AI tools within your sales and marketing efforts. How's that working? What are you doing?

Frank Stephens
Yeah. We're doing a lot of cool stuff. And yes, the AI is It's a big buzzword that's been around for the last year or two. But what does it mean? So for us, specifically, we've implemented AI. The first piece that we did was we do a weekly blog, six to 600 to maybe a thousand words. And initially we outsourced that, or we wrote them internally and utilize and ChatGPT, we're able to give ourselves a framework so we can reduce the amount of effort to create those. But the biggest AI thing that we've implemented a few months ago is basically we subscribe to something like, I'm not going to mention names, but there's tons of lead generation tools out there that I can say, cool, I want to focus on accounting firms. Give me all the accounting firms within, drop a pin at Northbrook, Illinois. Give me 25 miles radius. Give me all the data. You've got phone numbers, you got cell phones, you got email addresses, you got mailing address. And if you're doing a manual process like we were prior to this, we're sending out a cute email, someone's picking up the phone, and it's a slow and tedious process where you're only able to maybe reach out to 50, maybe 100 people a day. Utilizing AI with basically pulling that in and utilizing there's tons of options out there. There's MailChimp, there's ZOHO, whatever you want to use. But pulling those out and having AI pull the data live, meaning that as there's a new accountant or a new attorney that comes in to do the thing, whatever your filter, that person is automatically getting emails now, and it's a workflow with intelligence behind it. So if they ignore the first email, they're going to get email 2B. If they reply or whatever, they might get 2G. And it takes them down the sales process for us, our sales funnel. And then basically at the end of the day or whenever it is, it comes to be more of a warm lead. So our exposure is much huger out there. The branding is increased in all that. So all that legwork is being handled by machine intelligence now. So that has been huge for us.

Tim Fitzpatrick
So you're using it to help automate your cold outreach efforts, right?

Frank Stephens
The lead generation is now AI paced. That is correct. And the cool thing is it gets smarter. It is adjusting the content based on response, open rate, reply rate, and what have you.

Tim Fitzpatrick
Got it. Those Those people, those cold contacts are going into some AI generated and AI tweaked cold outreach sequences. Once they go through the sequence, if they don't respond, they're dropping out, but you're using it to do more cold outreach at scale.

Frank Stephens
We are. The other thing, and we have not done this yet, but the other piece that we're doing is we have obviously business development people in-house that are then picking up the phone, and if they at least open something, maybe we make a call. There are AI tools out there that will start making those calls for you. To me, that's a little scary. I'm not going to lie. It's not the full thing that we want to do. I don't think that's the white glove sales approach we want to take. But that initial push out, it's a man versus the machine. I can have this pump out literally thousands of messages versus a human doing maybe a fraction of that a day. It's not just not even email spamming, because, of course, that would be wrong. But in this situation, there is intelligence behind the way it's handling the messaging, both on a response and It's cool stuff.

Tim Fitzpatrick
Is the AI responding? Or once somebody replies, are your biz dev people getting involved at that point?

Frank Stephens
Depending on where they are in the funnel, the AI is actually doing responses on our behalf. Yeah, it's pretty cool stuff.

Tim Fitzpatrick
But then if they're at a point where it makes sense to have a phone call, your biz dev people are getting a task to follow up on it.

Frank Stephens
Absolutely. So it's truly just around that initial lead generation perspective that's handling all that piece. At the end of the day, it's not going to complete the entire sales cycle. God, that would be amazing. No, you have to have someone involved. And I mean, our coding process is not... We're not selling widgets here. It is a conversation of what services that they're looking for because we are truly solution agnostic. So whatever solution is best in packages for them, that's what we're going to provide to them as a quote.

Tim Fitzpatrick
It's interesting. There's a few things I want to pull out here because I think this is really good. I have heard people say, I've not heard the phone calls, but I have heard that people are testing AI to handle sales calls, and I've heard that it's pretty freaking impressive. At the same time, I'm not sure how many of us actually want to have a conversation with AI. It's going to be interesting to see how that evolves, because I think if it evolves too much, people are just going to stop. If they don't know who the number, they're going to stop picking up the freaking-

Frank Stephens
Absolutely, they will. Yeah.

Tim Fitzpatrick
So it's going to be interesting to see where that goes. But you're using AI at this point to be more efficient. Because we use it for ourselves and for clients as well from a marketing standpoint. And what I have found is, and you touched on with your weekly blog post, it is a great way to get a base that you can then tweak and build from. So it doesn't eliminate the work. It makes the work more efficient.

Frank Stephens
Exactly.

Tim Fitzpatrick
To get through it. There are so many AI tools out there at this point. As business owners, I think it is so important for us to just figure out, Hey, what are the tools that we can really maximize the return from that tool on? Let's hitch our wagon and start using that tool because at this point, you could subscribe to hundreds of AI tools and be wasting thousands of dollars a month. You got to think what you're going to do.

Frank Stephens
Correct.

Tim Fitzpatrick
You mentioned ChatGPT. There are other competitors that are quickly gaining steam in the space. Whatever you choose to use from a marketing standpoint, what we found is it's all about the prompt. The quality of the prompt determines the quality of the output.

Frank Stephens
Absolutely.

Tim Fitzpatrick
Right. And so you got to play with it, test it, and tweak it. But there are so many things from a marketing perspective that we can use it for to become faster and more efficient, and you're doing that. I love it, and thank you for sharing that.

Frank Stephens
The next AI for an MSP, though, is self-managed prompts. What I'm talking about is client puts in a ticket, says, I don't know, I'm having outlook issues, blah, blah, blah, blah. Our back-end tool recognizes who it is, and it automatically performs standard functions on that machine. I would love to be there one day, but we're actually doing some tests with that. It's pretty cool stuff. It's scary, but it's pretty cool stuff.

Tim Fitzpatrick
There's no reason that there's not going to be new employee comes in, you gather the specific set of information, and AI automatically sets up email and whatever else from a tech standpoint.

Frank Stephens
It just slams it through. Yeah, absolutely. Yeah, it's cool stuff.

Tim Fitzpatrick
Yeah, you're not going to need a tech to manually do that stuff.

Frank Stephens
Yeah, let's automate where we can and create those efficiency, like you said, where we can. Yeah, I love it.

Conclusion

Tim Fitzpatrick
So what's been the biggest driver of growth? 22 years? I mean, you're doing something right, Frank.

Frank Stephens
Yeah.

Tim Fitzpatrick
Well, if you had to pick one thing, again, this is a tough question, but what would you say has been the biggest driver?

Frank Stephens
The biggest driver is, I would say the relationship. And when I say by relationship, and I practice what I preach, right? I've encouraged my team to create personal relationships with the clients. I don't care if they're a low level person or there's a CEO or CFO of an organization. It's those relationships that when something happens, good or bad, we have that to back ourselves up with. I mean, to the point in which at my wedding, 16 years ago, I think like 20 % of the invites were clients of mine. And those are the relationships that we dive into. And I cherish those because on the flip side, we're not just doing IT for them. We are doing business consulting for them. What I mean by that is if there's a merger acquisition, if there's an expansion to a different country, they will bring us in on those conversations to make sure that from a technological perspective, and even from a business perspective, in some cases, they're going to be making the best decisions. So the cool thing about us is we're like lawyers and accountants. We have our hands in tons of different industries. We manage just shy of 200 clients throughout the Midwest, and we've seen good things and bad things for clients. So for us to be able to share those experiences with our clients, it deepens our relationships with them. So our success is build on our relationships. In that, hands down, that's probably what my I would say.

Tim Fitzpatrick
So knowing what you know now, anything you do differently?

Frank Stephens
You know what I would have done differently? Probably about much earlier is I would accept delegation to other people and have belief and trust in them to do things. Maybe not the way I would do it, but to put faith in them to have it done. I would have slept more hours over those years, probably in the early years and mid-years. So delegation, and That's been huge for me. And I wish I would have implemented that sooner.

Tim Fitzpatrick
It's hard for a lot of us as business owners to let go of certain things. But, yeah, like you said, we need to trust. We need to let go and see what happens. Mistakes are going to be made, but we can overcome those.

Frank Stephens
It is. And you know what? When mistakes are made, we'll become a better person, and we'll be a better team.

Tim Fitzpatrick
They're learning experiences, right? They're learning opportunities. It reminds me of... One of my mentors talks about processes and writing processes and SOPs. It's like, we have to write those for smart people. We have to also just trust that we're hiring smart people, and they're going to do good things. We're all going to make mistakes, but you shouldn't have to handhold anybody. If you do, then you hired the wrong person, and you need to move on.

Frank Stephens
Yes, indeed.

Tim Fitzpatrick
This has been fantastic, Frank. I really appreciate you sharing this. We talked about a lot of stuff in a short short period of time. So thank you for sharing all that value. Where can people learn more about you if they want to connect?

Frank Stephens
Yeah. So our website, onlinects.com, that's O-N-L-I-N-E-C-T-S.com. You can also find me Frank Stevens on LinkedIn as well.

Tim Fitzpatrick
Cool. And we'll make sure those are in the show notes. If you guys like this, enjoyed this conversation, go connect with Frank. Go check out CTS at their website. Frank, thank you so much for taking the time. I appreciate you doing so. Those of you that are watching, listening, I appreciate you as well. Frank shared all kinds of great stuff about what they've done to grow. If you want to connect, learn more about where you should be focusing now to get where you want to go, you can always connect with us over at rialtomarketing.com. You can also check out RevenueRoadblockScorecard.com, which is where you can determine which of the nine common revenue roadblocks are slowing down your growth. Takes less than five minutes, so go check it out. Frank, thank you again. Till next time.


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About the author, Tim Fitzpatrick

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