Seven Steps to Managed Services Success
Understand the Value of Managed Services
Customers won’t choose a partner in the managed services model over a partner who is selling traditional block-hour support if the MSP doesn’t truly understand the underlying value behind managed services. Smith says MSPs need to dig deep and really talk to customers to understand why they’d need an MSP
Understand the Value of Managed Services
“I think a lot of resellers get into [the MSP] business because they know that they need to and they need to because the VAR business model is a very difficult model and the concept of recurring revenue is really nice,” Smith says. “But that’s not why your customers need the service.”
Build Your Service Around People and Processes
Don’t spend so much time agonizing over the technology you’ll be using to administer your services that you forget about the most important element to your services: people and processes. As Smith puts it, most competition technologies are going to serve you well-just pick one and move on to planning the processes you’re going to build around that tool.
Build Your Service Around People and Processes
“My number one rule for anybody that’s looking to get into the business is it’s not the tool you use, it’s the people and processes that matter,” Smith says. “The longer you wait to get to working on those processes, the less likely that you have a chance for success.”
Tell Them What They Need
Too many MSPs let their customers make the mistake of choosing the wrong package of services for their needs just for the sake of making a sale, any sale. Forget what your vendors have told you about Bronze/Silver/Gold packaging, Smith says. Instead, create a comprehensive solution that doesn’t give customers too many choices. Tell them what you need, because you’re the expert, not them.
Tell Them What They Need
“Don’t go to market with this bronze/silver/gold solution and go out to the customer site and say, ‘OK, well we really think that you really need this gold solution, but whatever fits your budget is cool with us,’” Smith says. “You give them these options and the first thing you do is you confuse the customer. The second thing you do is tell the customer that you don’t really care much about them because you just want their money and whichever level they’re willing to pay is fine with you.”
Don’t Fall Back Into Your Comfort Zone
Another big mistake Smith sees partners committing is falling into the cycle of finding a new solution, getting a little bit of vendor training, going out to make a few unrefined and unsuccessful pitches and giving up before they’ve even started. New MSPs have to work at it for a while before seeing success. Don’t get discouraged and move back to the traditional model entirely, but instead maintain a hybrid approach at the outset with a mix of managed services offerings and transactional/project-based work.
Don’t Fall Back Into Your Comfort Zone
“You really need to realize that it is a shift in your business model and you really are going to have to spend some time at it once you decide to do it,” Smith says. “Don’t get discouraged and move on. Honestly, if you do that you’re going to go out of business because there are a lot of other people figuring it out and putting the time into it.”
Pitch, Pitch, Pitch
Putting the work into managed services means actually pounding the pavement and getting in front of prospects and in front of current customers. According to Smith, many partners have built their businesses around referrals and don’t really know how to sell anymore. But if you want to convert your customer base to managed services, you can’t afford to wait for referrals the way they used to when they were simply reselling products. Managed services requires higher volumes of customers in the pipeline than a transactional business.
Pitch, Pitch, Pitch
“You actually have to get out there and start marketing your solution and really dedicate some time to growing your business,” Smith says. “Otherwise you’re going to be an MSP with six customers and that’s all you’ll ever be.”
Create Top-of-Mind Awareness
Marketing is all about top-of-mind awareness, Smith says. Partners who only send the occasional e-mail blast or newsletter are wasting their time because they are not developing that top-of-mind awareness of the brand. In order to bring your name to the top of the list when customers are ready to buy, you’ll need to plan out a consistent marketing plan.
Create Top-of-Mind Awareness
“It doesn’t have to be complicated. It could be a postcard mailer once a month, a newsletter every three months and regular e-mails,” Smith says. “But you just have to have these continuous touches with these prospects and your existing customers as well.”
Don’t Pay Lip Service to Consultative Selling
At Do IT Smarter, Smith and his team have a policy that whenever a previously unknown prospect calls for a quote, they’ll refuse and tell that person that there is no way to do that because the team doesn’t understand the prospect’s needs yet. Smith starts by offering a free assessment of the prospect’s network, their business needs and their pain points. Then he discusses his findings with the prospect to make sure he’s got everything right. Then he’s ready for submitting a proposal.
Don’t Pay Lip Service to Consultative Selling
“What you’re doing there is you’re building that relationship with that customerso by the time you do give them a proposal it is something that you really believe in,” Smith says. “It just makes your presentation that much more powerful and you definitely have a much higher success rate.”