Corporate Backup were recently invited by CIAOPS to do a live podcast for their Australian-Tech blog. Despite having to do the call super early, Kevin dusted off his thinking cap to provide technical insight into what we do, and how we do it.
Cloud Storage Has a Dirty Little Secret…
Although ‘cloud’ services are nothing new, noone can dispute the massive spike in interest among users and vendors. The industry has seen massive numbers of businesses taking advantage of revolutionary solutions, followed by massive numbers of businesses finding out that this ‘perfect solution’ has some flaws that weren’t mentioned in the sales pitch.
There are Two Big Secrets surrounding a large number of online services who offer Backup.
- Overseas storage at an undisclosed location means that getting a hard copy of the data after a disaster can take almost as long as downloading it
- In order to be seen as competitive with overseas offerings, local vendors advertise very cheap rates per GB, whilst charging for everything else as an ‘add-on’ despite the service being useless without them. ie. transferring the data to and from their data centre
All of a sudden, the automatic backup that promised to save your clients time and money won’t be available for another 5-7 working days and you just got an invoice for 5x the expected cost!
To avoid problem #1: Corporate Backup use only Australian data centres which we have access to 24/7. External drives are idling away all the time, so we can start preparing an emergency restore drive before we’ve even arrived at the centre! It is then packed up and put on the next available flight/courier to the address you specify.
To avoid problem #2: The fees laid out in our Application Forms are the only fees we charge. There are no hidden extras for things like
- PUT, COPY, GET, POST & LIST functions
- Manual hard drive seed/retrieval
- Traffic charges
Do you have a client who was warned of a potential problem, but ignored your advice until ‘it happened to them’? Did you feel like saying “I told you so!” ? Well…If you’re ever caught short with an overseas/ cheap local provider, don’t say we didn’t warn you 
Targeting the Domestic Market
In our last post we looked at the key differences between an average domestic PC user as oppposed to a business client. Now it’s time to examine the most effective ways to reach and sign up domestic users (and perhaps pick up new business work along the way!)
Approaching domestic users is more a matter of large numbers than it is a singular, focussed effort. You need to have an effect on the way people think, feel, reason and ultimately select an online service. It goes without saying that you need a presence on the top 3 social networks where you can identify yourself as a go-to IT guy, and in return ask people to try out your software free for a given amount of time and then decide if they wish to continue to use the service.
According to ebizmba, the top 3 social networking site are:
- Facebook (surprise!)
Although this is not a lesson in networking, we recommend that you take the time to use these 3 tools effectively, and link them so they all update automatically. Strike a good balance between your following and followers, interact with them and they will share your product with their network.
You can also leverage the online ‘marketplace’ where people go to trade goods and services locally. Gumtree should be the first domain that springs to mind. If you were to place a paid ad on Gumtree for professional computer support you would consistently feature at the top of peoples search results and pick up ad-hoc work as a result. You can add value to your service by offering offsite backup for photos, documents, family videos and anything else they hold dear. Again, this might come in the form of a 14-day trial, but if you create enough value in your service, they’ll sign up.
Although we have never extolled the benefits of print marketing, if it’s done a certain way it can generate a higher ROI than normally expected. A mass mailing campaign in your local area, asking people to ‘test’ your software at no charge, and with no obligation, will generate interest. You must emphasize that you are a local IT specialist, and working on your own ‘Cloud Backup’ solution for Business and Domestic users. (Differentiating between domestic and business will entice some business owners to try your service) Have people get in touch with you so you can set them up with a 1GB trial account, and back up some photos, documents, and anything else they don’t want to lose. Follow up after a few days, have them delete and restore a bunch of files.
Just before the account is due to end, thank your ‘participants’ for trialling your software. Let them know that the software is going to market at X amount of dollars, and offer them a special price for helping you test it. When asking for referrals, again divide them up into Business/Domestic users and offer an introductory rate to all the people your new clients refer.
Bear in mind that you can do almost exactly the same thing to attract business users, either by phoning or visiting their premises and offering them an opportunity to help test your software.
Two Markets: Personal & Business
Both markets are appealing for different reasons, but they have very different needs and as such, very different prices.
If we exclude the plethora of ‘free’ Online Backup services, the average fee for a personal backup is $5-$40/ month at the time of writing, with absolutely no need for any kind of server backup or system state/ active directory backup function. However, personal users are often apathetic, impatient and (I mean this in the nicest of ways) ignorant. Sure they can turn on the computer, surf the net, sync iPods and edit photos but if ANYTHING goes wrong with their computer, you can establish yourself as their “go-to” IT guy for all future IT problems.
When it comes time to consider what to charge your personal users, you have to take into account: Who is my target market? What is being backed up? How much support will they need? Examples of target markets are:
- Students
- Teachers
- Digital hobbyists (photographers, designers, creative types)
- Writers
- Musicians
Although some of these markets may blur the line between personal and business use we will assume that all these people simply want to protect their data on their personal computer at home be it their research, their photos, their documents or their (original) music. I say original music because it is fine to back up someones own compositions, but pointless backing up other artists music that is readily available on CD or iTunes unless they’re happy to pay you to store it anyway.
Now, what to charge different people for your personal service? A 5GB backup should cost somewhere between $5-$10/ month. You should offer people unlimited over the phone support for $99/ year. The big boys do this and there’s nothing stopping you from doing the same.
Payment should be nothing other than direct debit, and you should charge a years’ fee upfront where possible, giving you access to more money more of the time and avoiding delayed payments in the future.
If a small personal user only contributes $159 a year (12x$5 plus $99 support plan) then obviously you need a large number of paying customers to make the service worth your while. Coming up in our next blog are ways in which to market to the personal space AND potentially pick up new business customers at the same time!
What’s in it for me?
You’re well aware that your clients need to be backed up. You’re also probably aware that you can incorporate a small fee into your existing rates for offering the service. Have you sat down and given some serious thought to how much money you can make by providing Offsite Backup alongside your existing services? Let’s look at three examples of small, local IT guys making great money off a service they initially thought wasn’t viable:
Partner 1: Melbourne, VIC
- 100GB Block
- 5 Clients ranging from 6GB to 52GB
- Prices ranging from $45/ month to $100/ month
- Over $400/ month in revenue, costing only $65/ month ex
Partner 2: Coolum Beach, QLD
- 500GB Block
- 9 Clients ranging from 10GB to 172GB
- Prices ranging from $25/ month to $250/ month
- Over $1200/ month in revenue, costing only $195/month ex
Partner 3: Perth, WA
- 1TB Block
- 14 Clients ranging from 80MB to 770GB
- Prices ranging from $10/month to $900/month
- Over $2000/ month in revenue, costing only $260/month ex
You can only imagine how much revenue our bigger partners are able to generate with 10TB of space! Every time you build a PC, every time you pick up a new customer, every time you meet a business owner at networking function you can offer to backup their data for a small monthly fee.
It makes you money, it saves you time, it adds to your professionalism, and when you restore critical files after data loss, it makes you look like a hero
“Yeah sounds good, I’ll bounce it off some customers…”
The phrase that every wholesaler dreads. Not because we don’t want you to talk to your customers about it, but because we want you to be successful and ‘bouncing it off some people’ doesn’t usually bring about the kind of success that you’re hoping for. Your clients are the hottest prospects you’re ever going to have, so doesn’t it make sense to approach them with some kind of plan rather than a ‘let’s try & see’ approach?
Now don’t get me wrong, the law of large numbers says that even the most ham-fisted attempt at piquing clients interest in a new product or service will yield SOME result. But none of us are in business to get ‘some’ result from a herculean marketing effort. That’s a waste of time and resources. You’re in it to get BIG results from a nominal amount of canvassing.
Here’s the tricky part though, our marketing material is available to our partners the moment the application hits our inbox, but that’s not much good to you if you’re trying to gauge your clients interest in the service before taking it on. SO, here are 4 ways in which you can approach your clients properly, and get the go ahead from as many clients as possible before signing on the dotted line.
- Put it on your website (duh!) For reasons as yet unknown by modern science, people respond to material on the internet. Add some credibility to your (potential) new service by giving it a short write up online. Cite some case studies, quote some figures, offer a promotional discount.
- Incorporate Offsite Backup into your Best Practice Methodology. Dont have one? Make one! Best Practice applies to your highest level of ongoing support to your clients. In addition to this, clients need to know that their DR plan will carry no guarantee of recovery unless they incorporate offsite backup into their portfolio.
- Have a one-on-one with clients who have suffered a disaster in the past (as long as it wasn’t your fault) It goes without saying that these clients will be far more receptive to protecting their business offsite.
- Offer the service as a value-add to new or existing clients who are due for a server upgrade. ‘Would you like fries with that?’
Bottom line is, asking people tentatively if they’re interested won’t get you the results you want. Put in place a simple, easy system, have some handy responses to the usual objections (hint: other blog posts) and as always, never, EVER be caught without an application form
Corporate Backup vs. The Rest of the World
The purpose of our blog is to help our wholesalers broaden their horizons when it comes to the marketing and selling of their software and services, however, we’re so proud of what we do that sometimes we might feel the need to plug our services. This is one of those times
We get a lot of inbound enquiries asking about our ‘commission structure’ for resellers. The caller is then blown away when we explain that we do not pay any commission, instead giving the reseller absolute control over what, how and when they charge their clients.
Then we go on to explain that we provide all of our marketing material, free to be rebranded and used to grow their business. Saving them the time and effort of dreaming up and designing their own material!
Once they get their head around this, we offer them:
- Setup of a direct debit account with which to bill their customers
- A featured position on www.australianbackupguide.com.au
- Half a day of remote installations on their clients machines
- Over the phone support and training
- Help with investigating new potential markets
Plus all the normal Customer Service & Support people expect when paying for ANY service.
Our resellers can get us out of bed 24/7 for emergency assistance at no extra cost, and we’ll even get a loaded hard drive on the next available flight anywhere in the world.
If you come across another Wholesale Provider who offers all this and more, we’d like to know about it so we can improve what we do. Second best isn’t good enough, especially when it comes to protecting your clients data, and your reputation.
Ever filled up a backup drive?
Last week we spoke to an IT Consultant who needed to urgently restore an Exchange database.
He went to his trusty Acronis backup only to find out the 1.5TB external backup drive had filled up, and Acronis hadn’t notified him to let him know that backups were now no longer happening… and hadn’t run for two months.
Luckily this IT Consulant was also using Corporate Backup. He was able to pull down the Exchange database across the Internet and restore the necessary mailbox.
Crisis averted
How to Compete with companies offering ‘$5/month unlimited Backups’
The biggest players in the online backup industry offer “unlimited” backups for around $5/month. How can they do that?? How can you possibly compete??
The answer is: They don’t, and you shouldn’t try.
Unlimited is a word that consumers and marketers love. Marketers also love the conditions spelled out in their fair use policies, because consumers never bother to read them. I’m yet to find someone who spells out just how much is too much, though I have found a lot of complaints from people experiencing outrageously slow upload speeds.
Put 2 & 2 together and we realise that the big boys enforce their fair use policy by throttling bandwidth, effectively limiting people to miniscule (25-50MB per 12 hours!) Unlimited backups? Yeah right.
Companies then take this a step further by limiting the size of individual files, i.e nothing over 500MB will be backed up. Pretty useless if your business database exceeds 500MB. Some software will not acknowledge external hard drives either, being spelled out in their loquacious Terms and Conditions that they ‘backup only certain types of files’
Turns out that when they say Unlimited, they should follow it up with “Oh, except for…”
So, back to you, the Local IT expert whose clientele are tempted by stupid online marketing. You can offer:
- Prompt, reliable service
- A friendly, easily understood voice on the telephone
- An SLA that guarantees their most precious data is safe and accessible
- A bonafide disaster recovery plan
- Mirrored data centres
- Backup of all file types
- Backup of Exchange and SQL
- Backup of system state, active directory, COM++, boot files, registry…
Good luck finding a $5/month service that provides all of these.
Clients can’t afford NOT to have Offsite Backup
We all know that sometimes no matter how clear-cut the case, some clients refuse to pay for anything other than the bare essentials. Regardless of the excuse, and we’ve heard some beauties, it all comes down to dollars and cents. If a service is perceived to COST money, rather than SAVE money, it doesn’t get much priority. However, if you can point out where a business is leaking money with its current DR ‘plan’ and counter it with a money SAVING solution, everybody wins.
The Cost of ‘In-house’ Backups: If the daily backup is entrusted to a staff member, it must consume the last 15 minutes of his or her day at least. If they’re on a salary of $60k this represents a cost of $38/week or $1976 a year. On top of this we have the initial cost of a tape drive setup which is likely to run at about $1500, plus the cost of replacing tapes. Plus the loss of productivity and with absolutely no guarantee the backups will work when called upon. Doesn’t sound like good business.
The Cost of Downtime: If a small business turns over $500,000 a year and is open 6 days a week, thats roughly $1597/day in revenue. If it has five staff on $80,000/year working full time, they cost $256/day each. Not to mention every other expense facing a business. A sub-par DR plan is likely to cause at least 3 days closure, with very limited capacity upon reopening while everything else is recovered. 3 days closure represents a net loss of $7034 PLUS running costs.
The Benefit of Offsite Backup: Over a 5 year period, we can reasonably assume that a small business turning over $500, 000/ year will have one 3-day outage and that there will be problems with the restoration either due to hardware failure or human error. Imagine that they have 75GB of data to backup. At today’s prices, this would cost about $150/ month or $1800/ year with the added benefit of an SLA and a guarantee that the data is recoverable and intact. Also, even if the business has complete hardware failure, the data can be restored to new hardware as long as it is the same service pack as the original. This can be done in far less than a day.
Savings Over ‘In-house’ backups per year: $1500 + 5 x ($1976 – $1800) = $2380
Savings on hardware media outlay: $200 x 5 years = $1000
Savings by Reducing Downtime: $7034 – 2 x $1597 = $3840
(ie. Reducing downtime from 3 days to less than 1)
Combined over a 5 year period: $2380 + $1000 + $3840 = $7220
Now to some people a $7220 saving over 5 years might not sound like much but answer me this: If I promised to leave a pile of money on your front doorstep in 5 years’ time worth $7220, would you pick it up the moment I arrived, or just hope it’s still there when you get home from work?
I thought so
Oh and by the way, if you were the IT guy who implemented this Offsite Backup, you would have bagged an extra $9000 over 5 years from just one small business customer. Anyone out there got more than one client?