First, a spot on the skin may be referred to as a boil, skin abscess, carbuncle, cyst, etc. The treatment will not vary much except in the cases where there is a underlying fungal cause, or something more serious, so knowing exactly what you are treating is always good. For what you describe the needling you are doing should be sufficient. As with all treatments you should also be doing local and distal points based on the persons overall signs and symptoms (i.e. their TCM diagnosis). But the needling technique you are using for the "cyst" is generally enough.
The needling should generally go in from the 4 "corners" and "head" and "tail" of the cyst (like a turtle) and be inserted at an angle going deeper under the cyst. The needling facilitate the circulation in the area and opens the pores so that whatever causes the collection will be released. There are herbal rememdies that can be used on the skin as well, but they are generally unneccessary with acupuncture.