This week I was in Tampa spending time with our friends at ConnectWise, and I was able to catch up with Lisa Jenkins and spend an hour over coffee. We talked about life and her future plans, but also some of the realities of what is happening in the IT channel, and in HTG as an organization. She shared a link with me to a great blog post she had written last fall, and I asked if I could post it here. Take a read - great thinking and some valuable ideas for how to run your company.
In recent research to understand trends in managed services, I read an article about Southwest Airlines unique success in a commoditized market. It proves to show that great customer service and relationships, combined with repeatability and standardization ultimately create best in class profits. In the IT managed services business model, profitability is ultimately driven by the same two core components; relationships or “value” and repeatability or “scale”.
Southwest Airlines is the most profitable airline in the US and even though some may complain about the “cattle call” boarding process, no one can refute that their customer satisfaction and loyalty is through the roof. So, they obviously have the “relationship” side of the business down. “Value” is defined by the beholder. So, how do you define your value to your customers? Do you explain your business and what technologies you provide or are you focusing on explaining your value from the customer's perspective? What impact will you have on their business? It's important to talk about what customers care about…NOT why they need to upgrade to Windows 8. Using facts and examples of success brought to other customers is critical. This is no longer a technology business, but technology is now simply an enabler in solving customer pain points, maybe pain points they didn't even know they had, which is why focusing on a particular vertical(s) can be key to insight in understanding a customer 's business needs. If customers perceive business value in your services and you can answer why a customer should buy from you over anyone else, then there is a valuable business relationship.
The parallels between Southwest Airlines and IT managed services in repeatability to scale are amazing. Southwest flies one plane, the Boeing 737. This simplifies complexity from airport gates, baggage trucks, catering equipment, and other equipment are configured to support the Boeing 737, which creates efficiencies throughout the infrastructure. The translation to MSPs is offering “one technology stack” to drive out complexity and generate greater efficiency in supporting IT infrastructure. The one plane, also allows Southwest Airlines to have a standardized for parts inventory with just one aircraft to service, think of the time savings this provides, and totally transferrable to the support of IT hardware from one vendor. This also creates standardized in knowledge management - every Southwest pilot, mechanic, and flight attendant knows the 737 very well. Also, applicable with “one technology stack” or vertical business focus, the IT solution provider's management team, sales personnel, service technicians, & engineers all become experts.
Wise words, and definitely some things to consider. HTG faces the same challenges as we serve our clients with an MSP like service model. It is all about value, and the ability to scale. We're working hard to make sure there is significant value, and that we are able to have a sustainable model that can scale and adapt to an ever changing market. Thanks Lisa, for sharing your post!