Should You Give a Proposal at the First Meeting? SMB Sales Strategies Explored

The conversation focused on the practice of providing managed service pricing to customers during an initial meeting. One concept discussed was that MSPs are encountering prospects who increasingly expect immediate, transparent pricing, with many decision-makers opting to make choices after a single round of vendor meetings. The discussion explored how this shift contrasts with traditional industry advice that recommends withholding pricing until after an in-depth assessment and value-building process. Several points were raised, including the observation that coming prepared—with thorough research on the prospect and a clear pricing structure—can facilitate business wins, especially in competitive settings where prospects expect streamlined proposals. A key theme that emerged was the importance of preparation ahead of initial client meetings. The discussion clarified that researching client backgrounds, conducting preliminary discoveries, and leveraging prior experience with similarly sized environments enable MSPs to present informed, realistic pricing. The conversation addressed that exceptions remain: in complex environments or when the client lacks clear infrastructure visibility, an assessment may still be necessary prior to quoting. However, these situations are reportedly less common, as clients often provide substantial upfront context during pre-meeting calls. Secondary topics included practical guidance for financing large product orders, navigating out-of-state project requirements, and managing margin compression. The discussion explored options for financing substantial hardware purchases, highlighting leasing through distributors or manufacturers, encouraging clients to handle their own financing where possible, and considering purchase order (PO) financing to reduce resource strain. For out-of-state projects, building a professional network through peer groups or leveraging distributor partner networks was recommended. Regarding margin management, participants suggested standardizing service stacks, packaging recurring solutions, and reviewing contracts to ensure annual rate adjustments. The use of value-added services, such as cybersecurity and compliance, was recommended to offset margin thinning. The discussion outlined several implications for MSPs and IT leaders. Responsive, transparent pricing aligns with current buyer expectations but requires robust preparation and established pricing models to maintain accountability and ensure fair risk allocation. For hardware procurement, shifting financial responsibility to clients or utilizing external financing tools can preserve operating capital and mitigate margin erosion. Resilient operational models—incorporating peer collaboration, flexible service packaging, and annual price reviews—enable firms to adapt to ongoing industry pressures including rising costs and tightening margins. MSPs are advised to prioritize accountability in client communications, vendor negotiations, and conflict resolution policies to reduce operational risk and protect organizational wellbeing.Title:       Should you give a proposal at the first meeting? MSP Question of the week:   Should you give Managed Services pricing to your prospect on the first meeting? Topics/Events Apple Price hike is not welcome news:  https://www.linkedin.com/news/story/apple-hikes-prices-we-know-this-is-not-welcome-news-8956946/https://www.linkedin.com/news/story/apples-price-hikes-reflect-ai-eras-growing-price-tag-8305905/     20% price increase ipads, macbooks, iMacs – iPhone unchanged How do you finance larger product orders?   Lease, PO financing w/ distributor – don’t tell mfr What if you have a project in another state for a current client ?  How do you deliver? With margins thinning, how can I increase my overall margin? Tales from the field:  How do you deal with an irate customer? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode’s principal focus is on managing employee compensation requests within MSP operations, specifically addressing scenarios in which employees request significant raises. The discussion highlights the need for MSP leaders to weigh current market rates and organizational financial constraints in response to such requests. Both collaborative problem-solving—engaging employees in discussions regarding revenue generation—and performance-based compensation structures were identified as practical strategies for balancing employee retention with business viability. Supporting this, the speakers emphasized transparent conversations with employees about the company’s billing structure, the sources of revenue, and the tradeoffs required to increase compensation. Performance-based incentives, such as commissions or bonuses tied to measurable business milestones (e.g., revenue targets, net new business), were noted as effective mechanisms for aligning individual rewards with organizational profitability. The discussion also noted risks when negotiation dynamics become adversarial, underscoring the importance of maintaining professionalism in both management and staff behaviors. Adjacent topics included the increasing relevance of AI proficiency for workforce retention and the emerging terminology in the sector, such as “Managed Intelligence Provider” (MIP). It was observed that employees lacking AI skills face elevated layoff risks, a factor attributed to shifting operational priorities and the need for continuous learning. While new acronyms like MIP may gain industry attention, participants agreed that most services related to intelligence and data management could be incorporated within the MSP framework, suggesting minimal structural change for service providers. For MSPs and IT leaders, the session underscores the necessity of clear compensation policies, ongoing staff development—especially in AI—and cautious positioning during merger or acquisition discussions. Risk mitigation includes frank financial communication with staff, investments in workforce upskilling, and careful negotiation to avoid undervaluation during business transitions. Performance incentives and clear cultural alignment are practical steps to balance employee satisfaction with organizational sustainability.1. MSP Question of the week: My employee wants more money- what should I do? 2. A single decision that triples some workers layoff risk – Tech workers who regularly use artificial intelligence tools are far less likely to be laid off compared to colleagues who use AI less frequently, Bloomberg reports, citing new Gallup research. It puts infrequent users' layoff risk at 18%, tripling the 6% layoff risk for frequent users. Earlier this year, researchers tracked how often 23,000 employed and displaced workers used AI 3. The RISE of the Managed Intelligence Provider 4. M&A: How do I find the right buyer? Amy’s Book: https://amzn.to/4dSYOcR 5. Tales from the Field: Merger conversation – make sure it’s a culture fit and be fair with the price (no lowballing)   Mastermind Event – July 30-31st, 2026 Register here: https://portal.kernanconsulting.com/mastermind-event Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A significant regulatory development affecting MSPs was discussed: the US Government ordered the suspension of access to the Fable 5 and Mythos 5 AI models by any foreign national, including those inside and outside the United States, citing national security authorities. As reported in the Anthropic company statement, this directive forced abrupt discontinuation of these AI tools for all customers, regardless of business impact. The decision resulted in the sudden loss of access to custom-built AI applications and business process automation tools that MSPs and their clients had integrated into daily operations. Immediate disruptions included the cessation of SEO and analytics engines, RMM automation, and bespoke backup solutions that relied on the now-restricted AI platforms. Further clarification showed these suspensions are tied to concerns about potential backdoor access, disputed by Anthropic but acted upon due to US Government findings. Additional context revealed Amazon—the largest investor in Anthropic and a direct competitor—alerted federal authorities to the supposed vulnerability. Stock prices of competitive AI offerings in China reportedly rose by 48% following the announcement, indicating market reactivity to perceived US regulatory risks. The episode underscored that AI model dependencies—whether managed internally by MSPs or by third-party vendors—can introduce sudden continuity hazards if access or legal standing is rapidly altered. Adjacent discussions evaluated operational models for MSP service offerings. Contrasting perspectives highlighted the tradeoff between providing a single comprehensive managed services plan, designed for streamlined staff training and high-touch customer experience, versus offering a tiered set of plans (“good, better, best”) that, according to shared data, can result in about 70% higher revenue through client segmentation and option-based sales. The choice was framed as fundamentally cultural, influencing both workforce structure and scalability, with differing risk and complexity profiles for technical delivery and sales management. Key implications for MSPs and IT leaders include the need for explicit risk assessments around reliance on AI platforms and third-party tools. Business continuity planning should contemplate not only technical redundancy but also legal and regulatory exposures to abrupt vendor or governmental action. When building service portfolios, organizations should align plan standardization or diversification with internal capacity, capability for sales-driven growth, and staff training. Establishing clear governance for evaluating the ongoing viability and risk exposure of both internally developed and vendor-supplied technology is critical for operational resilience in an environment of rapid regulatory change. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A central discussion in the podcast focused on the applicability of the Entrepreneurial Operating System (EOS) for small Managed Service Providers (MSPs). Divergent perspectives were presented regarding whether the EOS framework is suitable for MSPs with very few staff. The conversation highlighted that while EOS provides accountability, transparency, and structured communication, some very small organizations (e.g., four employees or fewer) may find the framework’s meeting cadence and process requirements disproportionate to their operational needs. It was noted that EOS promises value in promoting ownership and alignment but that this benefit is more likely realized when an organization reaches a scale where individual ad hoc communications become inefficient. Supporting these observations, it was emphasized that EOS, as detailed in resources such as Gino Wickman’s book and related summaries, is designed with flexibility to span small, medium, and large teams. Examples were offered indicating that even companies with four employees have derived benefits through formalizing updates and consolidating communication, provided their baseline culture supports collective knowledge sharing. However, one position outlined that simply reading EOS materials may be sufficient for the smallest organizations to improve focus without fully implementing the structure, especially when daily meetings or formal processes are not otherwise necessary. The episode additionally examined risk management and operational best practices surrounding MSP business growth and eventual sale. The dialogue discouraged running a business constantly as if preparing for immediate sale, citing the need for risk-taking during growth phases. Factors such as maintaining diverse client portfolios, implementing clear master service agreements (MSAs), reducing owner dependency, and minimizing client concentration risk were underscored as practices that support both ongoing scalability and future valuation. A case was discussed in which valuation was negatively impacted by an overreliance on non-contracted, concentrated clients and a lack of W2 employees, illustrating the risk implications of operational decisions. For MSPs and IT service leaders, the discussion underscored the importance of regularly reviewing operational frameworks and business hygiene regardless of size. The tradeoffs between structure and agility require clear-eyed evaluation, particularly in managing risk, scaling sustainably, and ensuring future options for valuation or exit. While formal systems like EOS can strengthen accountability and communication, overengineering processes in very small teams may reduce efficiency. Careful attention to client diversification and contractual commitments is essential for risk reduction and maximizing enterprise value.   Title:    Is EOS good for a small MSP?What are we talking about today: MSP Question of the week: EOS framework in your business – is this good for MSPs? First introduced by Gino Wickman in his book Traction, the EOS framework focuses on aligning teams and driving execution  What the Heck is EOS? (shorter book)  AMYS NEW BOOK!!!   Top 20 questions - Should you run your business like you’re going to sell it? Image of Amy’s book  Amy’s Book: https://amzn.to/4dSYOcR MSP struggle hiring good people – what do you do when you hire a mediocre employee?  Article reference: https://www.linkedin.com/posts/timothykoirtyohannsphr_their-new-hire-was-fired-after-28-days-share-7361376947848843264-5UwS/ What is your quote turnaround time? Tales from the Field: I was doing a valuation this week and shared the results with the owner --  Good revenue 1.5m, good NI 375K, GREAT MRR 75%, good location and team.   No contracts, no office, no employees only 1099, 1 client represents 50% of revenues, and owner wants full exit. Amy and James Events: SMB Online Conference- June 25th panel. Free registration for SMB Online Community members. Register at www.smbonlinecommunityconference.com Mastermind Event – July 30-31st, 2026 in Omaha, NE. Register at  https://kernanconsulting.com/mastermind-event/ Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Discussion centered on the evolving role of Artificial Intelligence (AI) in the MSP technology stack, emphasizing the necessity for MSPs to deploy tools that can comprehensively manage AI, particularly concerning security and shadow IT. Multiple participants highlighted the lack of current solutions that aggregate and control AI activity via a single interface, with an explicit focus on the requirement to educate clients about AI privacy, security, and usage costs. The practical challenge of MSPs asserting thought leadership in AI was underscored, as was the complication of usage-based AI billing models leading to unexpected customer expenses. Supporting details were drawn from the recently released Kaseya State of the MSP report, which showed that customer acquisition remains the sector’s main challenge, with 71% of surveyed MSPs identifying it as their top concern. The report further found that only a minority of MSPs are executing effective sales and marketing strategies to educate clients. Additionally, 48% of respondents reported AI and automation as top client needs, yet a significant drop was observed in customers spending more than $25,000 a year with MSPs, falling from 75% to 41%. This reduction is attributed to clients undertaking technology initiatives independently, diminishing the perceived value of MSP services. Adjacent discussions addressed common issues around automation and AI adoption. Several practitioners noted a prevailing trend of automating legacy processes rather than leveraging AI for forward-looking transformation. It was emphasized that most AI implementations among peer groups are focused on operational efficiencies for past tasks, such as help desk and marketing automation, with few examples of innovative new service offerings. The dialogue also covered practical, risk-related aspects of managing client relationships, particularly when enforcing security measures such as multi-factor authentication in the face of client resistance. Implications for MSPs and IT leaders include the need to strengthen governance around AI adoption and service stack adjustments, actively communicate the value of AI security and management services, and anticipate client concerns about cost control and privacy. The observed decrease in customer spending points to operational and strategic risks around client engagement and service value. MSPs are advised to ensure that automation efforts align with future requirements, not just past service models, and to enhance accountability in both vendor and client-facing operations.   Title:    Should I Adjust My Stack for AI?  MSP Question of the week:  How should I adjust my stack for AI? Kasaya State of the MSP report is out: Running an MSP is harder than ever is the headline. https://www.kaseya.com/blog/msp-growth-challenges-2026/ Question for you! Amy had a post on LinkedIn last week telling MSPs that they are doing AI wrong. The final question was, are you adopting AI for the future or just automating the last 10 years. Where is your focus?. https://www.thirdtier.net/2026/05/31/most-msps-are-using-ai-wrong/ M&A: When is the best time to sell an MSP? Chapter 2 from Amy’s book. https://amzn.to/4dSYOcRAmy and James Events Mastermind Event – July 30-31st, 2026https://portal.kernanconsulting.com/mastermind-event Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A central development addressed is the projected effect of AI on the per-seat pricing model that underpins many MSP service offerings. According to the discussion, AI could reduce white-collar jobs by 30-50%, leading to fewer user seats for MSPs to support and bill for. This scenario presents significant revenue risk for MSPs reliant on per-user contracts. The discussion also references Microsoft’s introduction of Agent365, a product designed to license AI agents within enterprise environments, indicating a move by vendors to adapt licensing models while protecting enterprise relationships. Participants noted that if customer organizations reduce headcount, MSPs will face declining license and seat-based revenue. Discussion suggested alternative business models, such as switching to per-device pricing or developing new service streams, with an emphasis on advisory services and security. The timeframe for these changes was cited as two to three years, which was described as an operationally compressed window for MSPs. Additionally, security, data management, compliance, and governance were highlighted as ongoing service areas with continued relevance as the MSP landscape evolves. Additional topics included increased local competition among MSPs, as evidenced by survey data reporting 100% of respondents encountering significant competition in 2024. Differentiation and targeted marketing were underscored as necessary responses to commoditization pressures. Emotional considerations related to M&A were also discussed, with particular focus on the personal and organizational impact of business sales. Security operations in MSP settings were identified as a rising operational burden, amplified by rapid changes and the challenge of upskilling staff hired for traditional IT roles. Key implications for MSPs and IT service providers center on the need for rapid operational restructuring, with greater emphasis on knowledge-based services such as IT advisory, risk, security, and compliance. There is a recognized accountability for customer education on evolving threats and for managing new AI-related risks that impact both data sovereignty and contractual obligations. The discussion suggests that MSPs unable or unwilling to adapt to these shifts may seek exit strategies, while those staying will need to reassess both revenue models and the skills composition of their teams. Participation in industry peer groups was recommended to share best practices and address common operational challenges.   MSP Question of the week:    How will AI impact the per seat model?  -  How will AI impact the per seat model?  -  Captera did a survey on local competition: Captera did a survey of MSPs. 100% of surveyed MSPs say competition in their region is high.  This was a 2024 study—  in 2026, it has to be worse. MSPs that can't differentiate are suffering. https://www.capterra.com/resources/managed-service-provider-for-small-business/ - Emotions of selling your business – AMY’S NEW BOOK: https://sellmymsp.com/book -  How AI Is Transforming Security Operations: https://www.thirdtier.net/2026/05/11/how-artificial-intelligence-helps-managed-service-providers-deliver-smarter-security/When I talk with MSPs today—whether in my mentored-peer groups or consulting gigs—the same pattern shows up. Security has become the heaviest part of the workload. SOC-like responsibilities are landing on teams that were originally built for backups and patching. That mismatch is where AI can make a measurable difference and a wake-up call for MSPs looking toward the future.                - Not meeting with clients because you don’t know what to say? Speak To Your Clients About Email Threats: https://www.thirdtier.net/2026/05/19/speak-to-your-clients-about-email-threats/             - Tales from the field: Why MSP’s are exiting the channel  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The most consequential development discussed is the rapid proliferation of Shadow IT in client environments, with emphasis on the unchecked adoption of cloud SaaS applications and artificial intelligence (AI) tools by end users. Speakers noted that this has led to a substantial loss of MSP control over client IT environments, eroding trusted advisor status and prompting clients to question the ongoing necessity of working with their MSP. The pervasive use of AI and SaaS products without guidance or oversight introduces governance and security risks, particularly relating to sensitive business data being accessible to third-party vendors and potentially incorporated into external data sets. The episode provided details on how Shadow IT emerges, highlighting the ease with which employees can adopt SaaS and AI tools through free trials, personal accounts, or non-business credit cards, often outside of IT’s direct visibility. According to Amy and El, clients are increasingly self-serving their technology needs, shifting traditional MSP-client dynamics. The conversation outlined specific governance issues, such as most AI tools ingesting client data into the cloud, with limited assurance as to how it will be used or protected unless higher tiers of service are paid for—an unlikely scenario for most SMBs using free versions. Secondary discussion focused on broader industry fragmentation and the challenges it poses for knowledge-sharing, consensus-building, and vendor feedback. The speakers recalled a time when MSP best practices spread rapidly through tightly-knit peer groups or single platforms but observed current information channels are numerous and scattered, such as Discord, Reddit, LinkedIn, and Facebook. This dispersion hinders both MSPs and vendors from collaborating effectively and reduces the feedback loop necessary for responsive product development and operational improvement. The key implications for MSPs and IT leaders include the pressing need to shift operational models from rigid, tool-centric offerings to relationship- and advisory-focused services. There is heightened risk if MSPs fail to address governance and security concerns, especially as end users continue adopting technology independently. Speakers recommend implementing proactive client education, detailed risk analysis on SaaS and AI integrations, and establishing clear communication strategies to reclaim the advisory role. MSPs are encouraged to align compensation models to advisory activities, as future client value is projected to depend more on strategic guidance than product-resale or ticket-resolution metrics.Title: How are you managing Shadow IT? Topics: How are you managing Shadow IT? Is the MSP industry too fragmented in how we share knowledge? Why do MSPs exist? (blog posts from “Amy’s Sayings”: https://www.thirdtier.net/?s=Amy%27s+sayings) What does it mean to be a M365-based MSP in 2026? Upcoming events: Zero Trust Workshop- 3 sessions starting May 28.  Register here: https://www.thirdtier.net/2026/04/27/arriving-in-may-zero-trust-workshop/ Mastermind Event with James (and Amy is a guest speaker!) in Omaha, NE Register here: https://kernanconsulting-mastermind.mykajabi.com/mastermind-event Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Recent reports highlight that Google Chrome and Anthropic’s desktop applications have introduced covert, non-optional downloads onto user devices without explicit notification or opt-out mechanisms. According to referenced analysis, Chrome has been silently installing its Gemini Nano AI model, and Anthropic’s Claude desktop app is deploying browser integrations across all Chromium-based browsers. These installations are performed without seeking user consent and, in some cases, persist even after attempted removal, raising direct concerns for device security and user privacy. The increased risk is substantiated by internal testing from Anthropic, which found that these browser integrations increased successful cyberattack rates by 23.6% and offered minimal mitigation (11.2% reduction) even when defensive measures were taken. This unnotified software deployment expands the attack surface for user devices and can compromise operational control for IT providers managing client environments. The practice also indicates a shift in vendor behavior regarding user transparency and system sovereignty, as noted by Speaker C. Adjacent to these developments, the episode discussed “vibe coding,” where non-technical users leverage AI tools to generate code for business tasks. This trend introduces new support and security burdens for MSPs as clients independently create potentially insecure or unsupported automation. Some MSPs are revising their Master Services Agreements (MSAs) to clarify that remediation of issues stemming from client-generated or AI-assisted code will be billed separately and are not covered under standard support contracts. The discussion also featured account of ransomware attacks on education platforms such as Canvas during critical exam periods, underscoring the importance of contingency planning and backup strategies. The implications for MSPs and IT leaders include heightened due diligence requirements regarding vendor software behaviors, increased need for endpoint and application visibility, and updated governance around end-user-initiated automation. To reduce operational and reputational harm, MSPs are encouraged to establish explicit client policies covering AI tool usage, conduct AI readiness and risk assessments, and formally delineate the scope of managed responsibilities in client agreements. Effective communication and continuous advisory engagement are positioned as vital to maintain alignment with client priorities and mitigate emerging technology risks. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Employee recognition structures and their risk-reduction implications received primary focus in this discussion. Both Amy Babinchak and James Kernan outlined verification-based strategies, such as leveraging Microsoft Teams' Praise app and Bonusly, a peer-to-peer micro-bonus platform, as cost-neutral or low-cost starting points. They emphasized that implementing structured recognition—either verbally, digitally, or via peer-nomination systems—directly supports workforce engagement and mitigates retention risk. James Kernan described anonymized in-house recognition systems, where peer acknowledgements are aggregated and rewarded via a monthly raffle, which included prizes typically sourced from vendor swag. Specifics included integration of recognition apps within established workflows and processes—such as Microsoft Teams for informal praise, and Bonusly for monetary or non-monetary peer-based rewards. Amy Babinchak noted that client compliments of staff are internally broadcast for transparency and morale. Both speakers advocated for public, peer-inclusive recognition in the workplace, with an explicit focus on acknowledging day-to-day contributions rather than relying solely on annual reviews or monetary raises. Further, operational and vendor management challenges were covered: Amy Babinchak articulated concerns that help desk KPIs often measure unproductive metrics and stressed the importance of incentivizing conversational and advisory staff interactions over ticket speed. Discussions also addressed the evolving Microsoft Partner Program, noting its complexity, shifting incentive structure, and the administration required. Alternative licensing approaches—such as MSPs enabling clients to purchase directly from Microsoft or using different distributors—were analyzed for cost and administrative impact. Additionally, strategies for navigating hardware supply chain volatility, including the use of white box solutions and refurbishments, were discussed in the context of margin preservation and client-specific risk management. The episode underscores for MSPs and IT leaders that systematic and visible employee recognition is a quantifiable retention and engagement strategy with minimal operational risk when thoughtfully implemented. Tactical decisions around help desk KPI selection, distributor choice, and hardware sourcing require ongoing evaluation to balance cost control, performance, and administrative overhead. Transparent data-driven management, especially concerning staff performance and licensing economics, can both reduce operational risk and foster a more resilient service provider organization.1. How do you motivate your employees –ways to reward employees https://bonusly.com/pricing https://learn.microsoft.com/en-us/microsoftteams/manage-praise-app 2. Helpdesk KPIs  https://www.dropbox.com/scl/fi/84v9ri236n5ck1x8mgf2w/KERNAN-Financial-Goals-and-KPI-s.doc?rlkey=e1qugzgn8x6lzqgesfqjeawew&st=1ma7g8hq&dl=0 3. Is the Microsoft partner program worth it? And how should I buy Microsoft  licenses? 4. Supply Chain challenges and price increases – whitebox or refurbs? 5. What does an AI MSP look like?   https://www.thirdtier.net/2026/05/01/deep-thoughts-on-msps-in-the-ai-age/ Amy's preferred white box vendor: https://equuscs.comUPCOMING CHANNEL EVENTS: In-Person MSP and Channel Partner Events Reinvent Telecom – May 12-14th, 2026 Zero Trust Workshop -  May 28th- 3 weeks 3 part series   https://www.thirdtier.net/product/zero-trust-workshop/ Mastermind Event – July 30-31st, 2026     FREE PASS LINK: http://bit.ly/kernanmastermind Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Compensation models for technical staff in MSPs require careful alignment with business objectives and operational capacity. Both James Kernan and Amy Babinchak emphasized that financial incentives such as commissions or bonuses can be appropriate when technicians are directly responsible for generating additional monthly recurring revenue (MRR) or securing new accounts. However, they noted that proper monitoring tools are essential to track productivity and ensure fairness—without adequate systems, variable compensation based on efficiency or project profitability can introduce operational risk and potential inequities. Supporting this, Amy Babinchak described implementing a tiered productivity incentive where technicians received additional pay for surpassing utilization rates above 80%, but expressed concern over excessive overtime. Both speakers underscored the necessity of clear job role definitions; rewarding sales activities for technical staff may be appropriate if it aligns with broader company goals and does not compromise core technical duties. Non-monetary recognition, such as trophies or gift cards for ticket resolution or utilization, was also mentioned as an effective, low-cost incentive. The episode expanded to analyze current challenges in industry education and vendor-driven events. Citing a survey from the "All Things MSP" group, Amy Babinchak reported that 86% of respondents believe MSP conferences are now allocating too much budget to entertainment at the expense of substantive educational content. Comments from participants indicated skepticism toward vendor-led sessions, noting that paid speaking slots are typically used for product promotion rather than useful training, raising questions about increasing conference costs and the dilution of actionable takeaways. Key operational topics included shifting preferences among AI tools, with both speakers confirming recent moves toward Claude and Copilot, and persistent debate over MSP documentation practices—ranging from ad-hoc tools like OneNote to industry solutions. The discussion concluded with an observation about payment processing costs: James Kernan highlighted a case where $24,000 in annual credit card fees significantly reduced firm profitability, stressing the importance of passing such costs on to customers or utilizing ACH to preserve margins. MSP leaders are encouraged to assess compensation structures, conference participation ROI, and vendor relationships in order to minimize risk, align incentives, and ensure operational resilience. Question of the week:  Should I pay my tech commissions? Rod Trent Substack: learning to talk to our apps https://rodtrent.substack.com/p/the-new-normal-talking-to-your-apps?r=h2641&utm_medium=ios&utm_source=notes-share-action   Do you think that MSP conferences are spending too much on entertainment and not enough on education?  All Things MSP survey   What is your favorite AI tool right now? Blog post: AI Image Generators Can Now Spell: https://www.thirdtier.net/2026/03/20/breaking-news-ai-image-generators-can-spell/   What tool do you use for Documentation? This is more for the smaller MSPs or internal IT folks not running something like IT Glue or Hudu. GitHub: https://github.com/       TALES FROM THE FIELD: Payment processing fees of 24K reviewing financials during valuation.  Alternative Payments and other payment automation firms help reduce/eliminate these fees by giving customers options for EFT or passing fees to them.https://www.alternativepayments.io/   UPCOMING CHANNEL EVENTS: Reinvent Telecom – May 12-14th, 2026 Mastermind Event – July 30-31st,2026 Amy’s Podcast Appearance Book Tour happening! Learn more about the book here: https://www.thirdtier.net/20-questions-every-msp-owner-asks-before-selling-their-business/                        Do you have a story from the field that you’d like to share? Or a question you’d like us to answer? Email it or send it as a voice memo or video to [email protected], and we just might use it in an upcoming show. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.