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Managed IT Services Model Reality Check: Part 1

Ray VrabelIn my last blog, I focused on some of the stumbling blocks you might encounter when switching to a managed IT services business model, and how to overcome them. This next two-part post, one today, one Monday, discusses how you can give your established managed-services business a reality check. Now that you’ve been at it for maybe six months to a year (or more), it’s time to look at your business as a whole, not just in parts. Let’s see what’s working, what’s not and what needs to be fine-tuned.

Below are the first three (of six) items to be looking at when conducting your managed IT services reality check. The remaining three items will be discussed in next month’s blog.

1. Sales and Marketing: Now that all systems are hopefully in place regarding your sales and marketing teams, KPIs are established, and employees and customers are happy, you can look forward and focus on the business instead of being in the business. This can mean anything from building up the business, keeping an eye on employee metrics, and not having to put out constant fires now that you are working with clients on a mostly managed IT basis.

This is also a great time to solidify your marketing message by ensuring that it is strong and refined when it comes to obtaining new business. This could include anything from sending direct-mail postcards to email blasts to regular blogs, social media updates and more. Another idea that has worked for some of Continuum’s MSP partners is an online or in-person “Lunch and Learn” webinar or seminar. This is an opportunity to not only show off your newly branded business (more about branding to come in part two of this post), but to take questions from interested prospects and leads who might convert into new business.

Remember to ensure your website is updated to reflect your company’s new vision and mission, and also that both your sales and marketing teams have the right tools to scope out new projects and assess new revenue. These are all items that MSPs should be focusing on once they have made the switch from break/fix to recurring revenue.

2. Pricing: This is very important because it can be your single biggest barrier to entry when it comes to gaining new customers and migrating current ones to your new model. As you refine pricing, keep costs in mind. Keep these questions in mind: What is my total cost of delivery? How much does it cost to deliver while keeping profits on target? Other times, it could be that your pricing might be on point, but your prospect says they don’t want to do business with you because they can hire someone to do IT for less money. In this situation, you could be looking at one of two scenarios: Either they aren’t serious about working with you on a managed-services basis, or you just might have to do a slightly better job of explaining your new business model, its value-add and all of the new cohesive services they will be getting. If it’s the latter, then it’s easy to be undercut because any “Joe the Computer Guy” selling phones out of a van can promote himself as offering a cheaper alternative.

If they still don’t understand the ROI and value of how your services will benefit them, then it’s not something you can control. Don’t be afraid to pass on a client that is just looking to nickel and dime you. They may be looking for the cheapest – rather than the best – way to run their business.

3. Account Management: As I mentioned earlier, now that you are focused on looking forward, task your team with regularly reviewing client accounts on a monthly and quarterly basis. It’s important at this stage to ensure that this happens. You don’t want your staff to take on the attitude of, “OK, we have our house in order, and we can forget about all the existing clients we converted to our new model.” While you always want to be promoting and prospecting, you don’t want to neglect the loyal clients that are investing their trust and faith in you to provide a solid ROI for them with this new model. The key is maintaining your current client base with their best interests in mind and reinforcing your value — all while looking for new projects, because your focus is now on managed services and being proactive.

Mid-year is definitely the best time to perform your company-wide reality check. Review the three items just discussed, and even if you spend a bit of time going over these areas, it will save you from many headaches and scrambling around at year-end.

Coming Next: Part two of this blog will discuss three more items to add to your midyear reality-check list. While I won’t divulge the entire list, I will offer that the focus will be on rebranding and some other items that you might not have previously thought to include in our new business model.

Raymond Vrabel is Continuum‘s Director of Technical Account Management and participates in product and service growth initiatives. He manages Continuum’s Technical Account Management team which supports over 3,500 partners worldwide. Vrabel has more than 15 years of experience in the IT industry, specializing in managed IT services, disaster recovery and cloud solutions. Follow him on Twitter:@rayvrabel.

 


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