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Disrupting From Within: Finding A Blue Ocean Strategy For Your Business With Orrin Klopper [Episode 121]

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In today’s ever-expanding world, it can feel almost impossible to differentiate yourself from other companies. So how can you stand out?

A blue ocean strategy may be exactly what you need. In this episode, Doug C. Brown speaks with Orrin Klopper, the founder and CEO of Netsurit, about how to find a blue ocean strategy to help you find what makes your business unique, and how to make it work. They also discuss critical success factors for any entrepreneur, why your life’s experiences can hold a mirror to your professional success, and much more.

In this episode you will learn:

 

Episode’s guest – Orrin Klopper

CSS 120 | Blue Ocean Strategy

Orrin Klopper is the CEO of Netsurit, which he co-founded 24 years ago during the lead-up to Y2K. Orrin and his partners saw an opportunity to provide managed outsourced services for companies and differentiate themselves by being honest, ethical and fair. Orrin is a passionate Microsoft Partner and is committed to serving both employees and clients by nurturing and realizing their dreams. In addition to his role leading Netsurit, He is active in the Young Presidents’ Association (YPO) and the Entrepreneurs Organization. Orrin holds a master’s degree in Entrepreneurship from the M.I.T. Sloan School of Management.

Orrin and Netsurit are offering a free technology ROI/automation assessment. Learn more here: www.netsurit.com/en-us/netsurit-innovate/#bookmeeting

transcript

Disrupting From Within: Finding A Blue Ocean Strategy For Your Business With Orrin Klopper

I have Mr. Orrin Klopper. He owns a company called Netsurit. We’re going to talk about the blue ocean and red ocean strategy, as well as how you can take some of the meaningful things that happened in your life, good or bad, and how they are tipping points in your life. Also, how that can fit into your blue ocean strategy. The blue ocean strategy is how you find clear water so that you can propel your boat forward if you will. Swim without the sharks, so to speak, in the world of business. Without further ado, let’s go speak to Orrin right now.

Orrin, welcome to the show. Thanks so much for being here.

It’s an absolute pleasure. Thank you, Doug.

You have a cool background and I’ve been doing a copious amount of reading about you because I’ve found your background so fascinating. Before we go there, why don’t you tell people what your company does so we can set the frame?

We’re an IT services business. We are an IT department for our customers and the ideal customer profile is a company that has 25 to 1,000 users or computers. We either are their IT department or we augment their IT department. The day-to-day, we are looking after all of the IT from their service desks to all of the day-to-day IT problems. At the top of that day-to-day operations, we have a service called Innovate where we guarantee an ROI based on automation, adoption, and productivity that we find. If at the end of a twelve-month period, assuming the agreement is $5,000 a month, we commit to finding $60,000 worth of ROI. If we don’t, we continue until we do.

Not a lot of people look at the business that way as they’re giving a guaranteed ROI because you’re going to keep searching one way or another until you find it. It’s pretty admirable in companies and for those of us who are selling, what if we did the same thing? We go in and we guarantee it like an ROI in our actions. How much better would our relationships be with our people and how many more referrals and expansions of the sale would happen due to that fact?

Orrin, we were talking about blue ocean red ocean because your company now is 350 people strong and growing. I know you guys were in the Inc. 5000. You’ve got all kinds of awards and accolades from what I read. It’s interesting to me now that you’re looking at a blue ocean red ocean strategy. A lot of companies should look at this, but you’re forthright enough and intelligent enough to look for this and say, “Where are we going?” Orrin, can you speak to the blue ocean red ocean process that you guys are going through right now?

I would love to be able to say as an entrepreneur and as a business, you come up with your strategy and go-to-market. At least for us, it would be great if we didn’t have to rethink, relook, and reinvent ourselves. However, in our market, there are about 20,000 to 30,000 companies in the US that do what we do in some form or another.

If you go back ten years, how easy was it for us to get leads? It was a much lower investment than it is now. As a function of competitiveness, and it started at the end of 2019 as we went into 2020, where we looked reality in the eye. If we stripped out a couple of extraordinary deals that came from upsells and customer referrals, our organic growth was in an absolute hole, and looking at that reality and what we were investing in marketing, we realized we needed to disrupt ourselves from within.

We went through a huge process and out of that, we relooked at our core offering and we also came up with our Innovate offering. I’m not aware of any of our competitors that are doing this offering in that way. This is what we are putting into our marketing engine. We are leading with that messaging because even at Google optimization or whatever it is you’re using to get leads or get in front of customers, they’re all saying, “I’m an MSP,” which is the industry term for our type of business.

We’ll look after your IT. We’ll guarantee service levels or we’ll look after your cybersecurity but where we arrived at is this Innovate offering. What we found is so many of our customers and the market spent a fortune on technology. They are not realizing the return on what they’ve already invested in. This Innovate service sits on top of that.

We’ve seen some great initial results and we’re a year and a half in with this new blue ocean offering and I suppose, it’s only a matter of time with a lot of blue oceans that it starts to become less blue. However, right now, I’m still excited to see that we are being unbelievably well-received in discussions with our customers about this offering and the fact that we are willing to take this risk.

You’ve been in business for a long time. In 1997, you started a business. You’ve been going at this thing for over twenty years at this point. How many times have you reinvented this blue ocean strategy in your business or embraced it anyways throughout?

The step that almost precedes that is we’ve always taken a quieter and an invested approach to strategic planning. In some years, we’ve overdone it and in other years, we haven’t put enough energy into it. It’s because of what can happen if you don’t do it thoroughly. In our experience, not enough people feel involved and buy in.

Also, if you overdo it, the layer of work we are putting on top of people that are already running the business, their departments, and their functions can create negative energy. We’re in a place now where it’s quite balanced. What I’m going to say now might sound quite rudimentary, but it starts with the SWOT. What are the internal strengths? What are the internal weaknesses? What are the external opportunities? What are the external threats?

Out of that, we are getting a sense of where the market is at, where are we strong, where are we weak, where are we winning, and where are we losing. In that, it almost forces us to face the reality of whether are we differentiated or not, if you look at Porter’s Five Forces. Each year, in a way, we’re running a version of a blue ocean review to understand how we are doing.

The one that we initiated starting in 2020 was probably one of the most radical blue ocean reinventions we’ve ever done. If you look back at when we entered the US market, when we did our first acquisition in the US back in 2016, that in itself from a geographic expansion where we did do some pivots in how we service our customers and the service guarantees that we offered was another reinvention, which was 2016. Yes, we’ve probably done it 4 or 5 times over the history of the business.

There are all-size companies that are reading this, Orrin. Some are your size companies. It’s all different sizes. What I’ve noticed is some of them, when you talk about blue ocean strategies, it’s like, “What does that mean?” I’m a plumbing company. Why do I need to look at things that my competitors aren’t doing? Could you speak to that? From a CEO or a founder’s head, where do you go to grow and continuously grow?

One of the examples that landed it for me so clearly in a book I read was Cirque du Soleil, where it wasn’t theater and it wasn’t the circus, but it was a space that existed between those two where the performers were not rock stars, actors, clowns and so forth. They didn’t necessarily receive this very high premium pay and they charged significantly more than what you would potentially pay at the theater or at the circus.

There are a whole lot of variables in the book and I saw that they’ve released a new book. I can’t remember the name offhand, but it’s the same authors as the Blue Ocean Strategy. If you have not read the Blue Ocean Strategy, it’s an easy read. I’d grab it on audio if you don’t have time to sit with a book and listen to it while you’re working out or driving or whatever it might be. That’s one example.

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Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant

Lockheed Martin was another example where each year, the three different parts of the US military would all have their own aircraft, have a spec for the aircraft they wanted, and they would go out to the market and Boeing, Lockheed Martin, and all of these organizations would tender. One of them said, “What happens if we created an aircraft that met the needs of all three parts of the military?”

Essentially now, they created what you can say in essence, “The military world is a blue ocean and it wasn’t looking just at those independent parts of it.” In our business or in any organization, it’s where you take your core offering or something possibly adjacent to it and you differentiate it so deeply that essentially, your potential customer cannot compare it to anything. It’s almost like, “It’s not this, but it’s not quite that.”

It gives them the sense of, “This is connected to what I need. I can’t compare it to anything.” You are able to build in a pricing premium where you’re not facing the pressures of where a market is commoditized. The red ocean being lots of competition and everybody’s trying to compete. They’re trying to compete on price and they’re undercutting each other. Whereas in a blue ocean, you have almost no competition or very few competitors and you can demand a premium price. It’s deeply connected to the value that it’ll create for your potential customer.

When you’re saying that, I was thinking about Disney right back in its day. Disney came in with this whole new concept that nobody could compete on. They then spread out into different industries besides the film industry, the entertainment industry, and parks. They’re into everything. What about a company that’s going, “I’m doing $5 million now. I’m not Disney. I don’t have 350 employees. I do want to find my blue ocean. How do they go about it?

If I were running a $5 million business now and I was reading this show, I’d go and listen to the Blue Ocean Strategy book. That thinking is still 100% relative. There are some very simple tools where you can map your industry, map your business and see how it compares to your industry. The book explains how you can pull those levers.

Probably another book I would go and read is $100M Offers by Alex Hormozi, where he talks about ways that you can create your own blue ocean. Some of the dynamics in there are so simple and easy to grasp. The applicability of it to each business is different but it’s a super worthwhile listen. No matter what you do, it’s a worthwhile listen.

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$100M Offers: How To Make Offers So Good People Feel Stupid Saying No

He talks about, and you might have seen it for anyone who’s reading, in your industry where some organizations serve all industries. They serve financial services, marketing, legal, etc. The moment you develop a deep understanding and competence in a particular industry and then even drill further into that, into a particular vertical within that industry – take for instance financial services and then go deep into financial services. Now, you’re looking at wealth management, or let’s say private equity.

You then build an offering that is deeply connected to what private equity firms want and you offer some guarantee in it because you know the space so well. You know what their pain points are. Immediately, now you’ve created a bit of a blue ocean for yourself. The book goes on to explain. Looking at your local geography is one piece of what he talks about. Look at the role. CFOs in Boston or CFOs of a manufacturing company that has between $50 million to $100 million in revenue, we have a cost management and reduction program. It’s those concepts of making it very tailored and specific to the audience.

The other piece of it would be to make sure, sometimes even in a business of $5 million, at times as the leader, you can become disconnected from the customer’s voice. You’ve got a couple of account managers maybe managing that frontline and you’ve got a salesperson who’s doing most of the sales. How do you get close to both the new business opportunities and the existing customers? It’s by listening very intently and clearly, that blue ocean starts to become clearer, especially if you’ve got the framework in the back of your mind.

I apply this to sales for people. I was a rep for a company called PAETEC Communications and they sold eventually to Windstream. I was their top guy. I looked at the landscape and the people who could help me in selling and I could help them in selling. In other words, where’s that blue ocean that nobody’s competing in? What I looked at, Orrin, was we had an independent agent force that worked in our business.

They would go out and recruit companies or people to provide telecommunication services. We had our direct sales channel. I asked the question, “What if I could do both?” As a direct, I could utilize the agent model on the direct side because there’s a certain segment of people who don’t want to be writing their own orders and doing their own customer support, which is what the agent would do because they had it 100% on their own.

I said, “Maybe I could look at this hybrid model.” I plunged into it and I became the number one rep in this company of 315 salespeople going into that blue ocean model because there were people who were like, “I don’t need 25% or 20%. I’ll take a 5% commission, but I don’t want to do any of the work. I want somebody to take care of all of this for me.”

If I make an extra $100,000 or $200,000 a year for my company, but it’s all profit, I’m good. It’s that type of thing. That’s how I grew so much that I had 62 incoming calls a day coming into my line from agents. I had to hire a couple of assistants when I was a rep. The reason I bring that forth is that I don’t think people think enough about this blue ocean strategy like, “Orrin has 350 people. Of course, he’s thinking about this,” and that type of thing.

However, how do I think along the path, whether I’m a $5 million company or a sales rep, a $100 million company, or an $18 billion company? We all have to keep thinking that way through the process. We have a company called Intuit here in the United States and they came out with something called Rocket Mortgage. I thought that was a blue ocean strategy for them, even though it was competing. I love your back story. By the time you were born, did I read right that you went to 8 or 10 schools by the time you were thirteen years old or something like that?

I went to my ninth school when I was thirteen. I like to always reflect and say, “I only got expelled from 3 so 6 out of 9 is not bad.” Also, talking about sales, the one thing I realized quite early on as I changed schools is that the school uniform I had was so new that it had some value and I could sell my school uniform. That was one of the early ways in which I learned how to sell something that had value that I no longer needed.

As a salesperson, we need to learn to adapt to any situation. It’s not that I would want my daughter to go to so many schools and I do tend to reframe the positive of things, but one of the things was I learned to adapt quickly. In the example that you gave, which is fascinating, you as a salesperson or sales leader took the initiative to potentially create a value proposition that differentiated you and was your own blue ocean.

All salespeople should be encouraged to do that because if any salesperson came to our sales leadership and said, “I see an angle here.” If we connected this and connected that and I packaged that, we’re going to get in front of more customers. That’s a great story and I would encourage any salesperson or sales leader to think like that.

All salespeople and sales leaders should be encouraged to take the initiative to create a value proposition that differentiates them. Click To Tweet

The reason I brought up the nine schools is because, to me, it would be like, “That’s a lot of change.” Even in my life, I started working early with my dad’s company because I think out of need. I was three years old. I was there sweeping floors. We were helping out when I was 5 and 6, selling stuff. My dad passed early and I never had the chance to ask him if he needed low-cost labor or if he was trying to teach us something. I wasn’t sure but at times, my friends were out doing things and I was working, but I was gaining skillsets. To me, nine schools in that period of time would’ve been traumatic.

Also, not being out with my friends all the time, it was more traumatic for me to be constantly working. I look at life now as I’m a bit older and I go, “Some of these connection points back when we were kids were what formed us to be the way we were. It allowed me to think that way.” If you wouldn’t mind, I know we hadn’t talked about this but I’m putting you on the spot.

Do you think people should look at their lives as a connecting weave that gets them to this certain place? In other words, we all have stuff that happens to us in our lives, but it’s how we take it or not take it or take the direction. I’d like to have your feedback on that. Is the stuff that happens in our past invaluable for your success as where you are now, for example?

It’s such an interesting discussion. I attended this program with a bunch of entrepreneurs. We had run it over about six years. One year we did it, we went to the Stanford campus. We invited Simon Sinek to come and spend an afternoon with us. He is the author of Start With Why. A friend of mine had brought him into his business and I knew a little bit about his methodology.

The one thing he does is he calls you out of the audience live and he will ask you about seminal moments in your life. A lot of them go back to someone’s childhood. He has a way of peeling back the layers of the onion to get to those key tipping points, key inflection points, and key points of meaning. Often, they’re embedded in adversity. Sometimes in intense adversity, you have to overcome so you build a level of resilience and resolve. Those moments carry so much value.

As an entrepreneur and any successful sales leader or salesperson, your ability to reframe and be optimistic is a critical success factor. Think about it. If we got down and suddenly stopped doing it every time we got a no, we would not have lasted very long. I was going to do a post on LinkedIn and I was thinking to myself, “Who are the people that took a chance on me long before I possibly had that belief in myself, and have I thanked them?”

As an entrepreneur, sales leader, or salesperson, your ability to reframe and be optimistic is a critical success factor. Click To Tweet

I’m pretty strong on the gratitude front. I go out of my way to thank people and sometimes, I’ll phone them randomly. I haven’t spoken to them in ten years and said, “I want you to know that door you opened had that.” I’ll give you an example. We have a business in the US now. Our business in the US is bigger than our business in South Africa and it’s growing exponentially faster because an executive from Microsoft who I met at a conference invited us to be represented on a Microsoft Partner Advisory Council. That was back in 2004. Through those trips and journeys, I would fly through New York and then it was on a trip in New York in 2015 that we ended up getting one of the members of our partner advisory council or someone I’d met through that as a customer.

In 2016, we bought a business in New York. Now, our business in New York and the US is significantly bigger than our South African business and it’s growing significantly faster. We can all look back as entrepreneurs, salespeople, and sales leaders and see the people that have given us a chance. It’s because what I’ve seen is people love to see the underdog win. There’s something in it. There’s this feeling. It’s like, “This guy is keen. He’s reliable. I see myself in him. I want to give him a chance.” Knowing that and believing that as an entrepreneur and as a salesperson or sales leader can give you a little bit of extra initiative and bravado in your outreach and what you do.

That’s why I think everybody loves the movie Rocky because Rocky was the underdog and he was the unlikable guy. I’d like to tie this in. It might or may not be a good tie-in, but I also think that trait when applied to a blue ocean strategy, because we have to have a bit of strength when we’re going into a blue ocean strategy and go, “I hope in this phase, I can win.” It all ties together and you did that so nicely and neatly in a package. Thank you for that. I would challenge anybody reading this to call a couple of people a day that have helped you out over life because as you said, Orrin, it opens up doors too, right?

That’s for sure. There’s a great book. It’s not that new. It’s called Getting to Plan B by Randy Komisar and John Mullins. They are legends in the private equity and the venture capital world out of Silicon Valley. They said that 70% of every single business they funded fundamentally changed their business model over the next 2 to 3 years.

Sometimes, as entrepreneurs, we fall in love with exactly how we’ve put everything together and that’s what we think is going to work. We keep on butting our heads against that until we feel that the wall will break but also, keep going, persisting, listening, and seeing, “What can I tweak? What can I change?” Change is a constant for all of us in the business world, whether you’re in sales or sales leadership or you’re an entrepreneur.

A question on that change. Can change also mean, “We’ve been beating this process for a long time? We got it to a certain point and we review it and then say, ‘Should we continue or stop?’”

A big part of our strategy now is around acquisitive growth and the reality of a red ocean market is it makes it ripe for consolidation. If you are in a market that is unbelievably competitive, look at the heavy lifting required to create a blue ocean versus what happens if I took a liquidity event and rolled some of my equity.

Take for instance the MSP market, Doug. There are almost 100 private equity firms that have invested in the MSP market in the US right now. Valuations are at good prices. A lot of the people running MSPs are in their late 50s and early 60s. They’re looking to liquidate. Sometimes when your market has become too much of a red ocean, it can be a good time to consider selling.

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Blue Ocean Strategy: Sometimes, when your market has become too much of a red ocean, it can be a good time to consider selling.

Orrin, I’m sure people’s brains are going, “This guy’s amazing,” and they want to know more about you or your company. How do they get ahold of you?

The best is to reach out to me on LinkedIn. It’s easy to find. You can find me there. I’m very responsive. From there, I can connect you with someone on my team or we can connect directly.

Orrin, I want to thank you so much for being a guest here on the show and bringing your A-game. I appreciate that. I’d love to have you back. I know you’re a mergers and acquisitions guy. You are an expert in that and have done quite well. I’d love to have you back on another episode if that’s good with you.

Sure. It’s such a fascinating space that your show covers. I feel that there is so much content here. I’m grateful for the opportunity, Doug. Thank you so much.

You’re welcome.

Did you ever imagine points in your life that you look back on and you go, “Those were horrible. Those were awful,” but those shaped how you got to your successful points? It helped you build resilience. It helped you overcome certain obstacles or resolve certain things in your life. When you do those, believe it or not, we open up our channels in life and it tells the world, the universe, “I don’t know how it works. I know it just works this way. I’m ready for more, bigger, and better things.”

If you’re wrestling with trauma in your life for whatever reason, resolve it and move forward because it opens up other things for you. When you’re looking at your business, as salespeople, you are in business. If you’re working for a company, you have the ability to affect and grow your revenue and your profits, those commissions that you keep in your pocket.

By looking at blue ocean strategies, resolve those meaningful points in your life. Whether you’re running a solo salesperson or running a team, or running companies, whether you’re doing $1 million, $5 million, $50 million, $500 million, or $500 billion, we’re constantly going to be reinventing ourselves and looking for those blue ocean strategies throughout our business if we want to continue on for decades and decades in business. It’s how it works. Let’s embrace it.

As always, if you love this episode, please give it a five-star review. If you are an expert or you know somebody who’s an expert, we’ve had a couple reach out to us saying, “I’d like a subject matter on this or subject matter on that.” Let us know what it is. Reach out to us at YouMatter@CEOSalesStrategies.com. Let us know what your idea is. We get back to everybody. If it’s a great idea for us and a great idea for you and you’re the expert, we’ll invite you on.

If you are the expert or the person for it and it matches the show, we’ll be happy to have you on. If you, yourself, or someone you know is looking to be in that top 1% earner’s category, or you only want to move your sales from A to B. You know it can happen in your heart of hearts, but either you’re sure or you’re not sure why it’s not happening, reach out to us and let us know.

We are running a 1% academy going forward. If you’d like to be on the waiting list for that, reach out directly to us. You can reach out to us at YouMatter@CEOSalesStrategies.com for that as well because you do matter to us. Also, we have a SaaS product coming out, an automated prospecting and follow-up system that’s meaningful, relevant, and does the work even if you can’t.

If you’d like to have more information on that, reach out to us. As always, I will say, “Go out and sell something now. Sell a lot of it. Play win-win. Make them happy. Make yourself happy.” That’s how you build a business. Play win-win because if you play win-lose, you win once, you’re not going to win again. Think about recurring, repetitive business, and expanding the sale.

Consistent growth in your business exponentially gives you the ultimate leverage. That’s why you play win-win. Go sell things profitably and make people happy. If you want to reach out to me directly, you can come out at Doug@CEOSalesStrategies.com. Send me an email there or @DougBrown123 on LinkedIn. Until next time. Make it a great day, and to your success.

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