Every IT professional knows that the managed services business model is superior to the break-fix model. You don’t need me to tell you that a proactive, preventative approach to IT service is more efficient than running around putting out fires. It leads to higher margins, scalability and recurring revenue while improving customer service. However, convincing your customers is a different story. Generally, they are happy with the service you provide at the prices you charge. They simply don’t know any better. Preventative care seems good on paper, but convincing customers to embrace the managed services delivery model is a challenge for even the best salesman. Here are four important things you need to consider.
1. Don’t sell technology: Typically, customers don’t care as much about individual features such as patch management, anti-spyware, anti-spam, backup, endpoint security, monitoring, cloud computing or Software-as-a-Service (SaaS) as we do. What they care about is how IT systems management impacts user productivity, decreases risk and keeps costs under control. To effectively sell the idea of managed services to your customers, it is important to focus on the end result of your support offering rather than the bits and bytes of how you deliver it. Show them that being proactive and using automation to deliver a higher level of performance, functionality and stability is cost-effective. Their biggest expense is human resources. If you can explain how your technology solution translates into better utilization and productivity of their employees, you can show them in tangible benefits why managed services are so critical.
2. Sell "your company way": If a customer told you that they wanted the best possible IT support available and that money was no object, what would you do? What people, process and technology would you deploy to achieve the best possible results? The answer to this question should be the basis for your managed services support offering. You support offering should deliver “your company way." This is the unique approach and perspective you have developed based on your years of experience. Build a process that delivers "your company way" to every client. That is your unique selling proposition.
3. Raise your price: You can’t deliver quality support by pricing your managed services offering too low. You are not saving your customers any money by charging them less and then delivering a watered-down product. If you truly believe that your approach to managed services is the best investment for your customers, then you should deliver a complete solution and charge accordingly. In fact, why would you even offer a lower-cost, lower-quality solution at all? Your customers are not qualified to tell you how you should deliver quality support. It is your job to tell them what technology support looks like, what it should cost and how the investment pays for itself.
4. Sales focus: I speak in front of IT providers at many live events each year. I always poll the audience to see how many people have a goal of increasing their managed services revenue. More than 90 percent of the hands in the audience go up. Then I ask how many people have a dedicated resource focused only on adding new managed services agreements. Very few hands are raised. Think of other areas of your business that you improved -- did any of them improve without focused resources? This dawned on me one day after I had announced to my employees that building our managed services practice was our most important initiative. I was sitting on the phone getting a price for a firewall project and I asked myself what I was doing. How were we going to reach our goals if I was not focused on our top priority? Managed services agreements are not something you add as just another thing you offer next to servers, firewalls, PCs and block time agreements. If you want to be a successful MSP, you need to dedicate resources focused only on increasing managed services revenue.
The managed services opportunity for IT providers remains strong. Start by making a firm commitment to the managed services delivery model and building a consistent and robust product. Seek out like-minded partners who can help you achieve your goals. The IT solution provider landscape continues to evolve with the influence of SaaS and cloud services, but the principles for success remain the same. Now is the time to establish your new value proposition.
Gary Pica is the president of TruMethods, a coaching and mentoring company helping IT providers and MSPs grow sales and profitability. Pica is a featured speaker at the XChange Solution Provider 2014 conference, running March 2 through March 4 in Los Angeles. For more information on Gary Pica and TruMethods, visit www.trumethods.com
PUBLISHED FEB. 26, 2014