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How to Sell Managed Services

Customers whose businesses are down for the count if their IT stops working are often the best prospects for managed services offerings. That’s according to Ted Warner, president of Connecting Point, a managed service provider in Greeley, Colo. Warner made those observations and others during a panel discussion as part of the the Ziff Davis […]

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Jessica Davis

Mar 20, 2007

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Customers whose businesses are down for the count if their IT stops working are often the best prospects for managed services offerings.

That’s according to Ted Warner, president of Connecting Point, a managed service provider in Greeley, Colo. Warner made those observations and others during a panel discussion as part of the the Ziff Davis Media Virtual Trade Show for Managed Services session, “How to Identify Potential Customers: Who Needs Managed Services?”

Warner noted that such prospects, “the IT-dependent,” understand the value of lost productivity in dollars per hour. They allocate budget dollars to IT, refresh their networks, and tend to be loyal and demanding clients.

Other categories Warner referred to included the “IT-aware” and the “IT-tolerant.” Prospects who are IT-aware are often good prospects. They have systems to allow for business continuity if their IT is down, but they may have nagging concerns about IT hazards and attacks. They probably have no budget for IT, but are willing to spend money, and they are loyal if their service provider produces for them.

“You have to keep selling them,” said Warner of this type of prospect. “They may not understand that you are getting alerts and you are patching their system.”

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The IT-tolerant are fair to poor prospects as managed services customers. They view IT as an expense and try to minimize it. They tend to shop for the lowest price and will jump from provider to provider, Warner said.

While many vendors and providers quibble over the definition of managed services, panelist Abizer Rasheed, CEO of Netfusions, a provider remote IT management and monitoring services, based in Keego Harbor, Mich., said he followed the definition of the MSPAlliance. That organization defines managed services as providing organizations with predictable business and focused IT services that optimize operations, manage risk and deliver measurable value from technology.

Rasheed noted that prospects at different-sized businesses required different sales approaches. For smaller businesses, the focus should be on reducing IT support costs and providing a fixed budget.

For businesses larger than 50 users, existing IT staff may feel threatened by a managed service provider. For these prospects, the opportunity can be to offer 24/7 monitoring and remediation of servers.

“The IT staff may view you as a threat and view patch management as job security,” he said.

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Overall, managed service providers’ goal should be to standardize the services offered and to create a focused marketing message and take advantage of economies of scale, he said.

A third panelist, Michael Proper, president and CEO of DirectPointe, in Lindon, Utah said it is important to define and validate the market, by aligning your business to customer needs. Once that is accomplished, an MSP should decide on a focus such as phone, PCs, servers or networking.

“It’s very important to look at each layer from a life-cycle perspective,” he said. “You should only focus on areas that you can completely manage for that life cycle.”

How to Sell Managed Services

Jessica Davis

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