IT and Business Insights for SMB Solution Providers

Onboarding - The Fastest Way to Success or Failure

Bringing on new managed services clients shouldn’t entail just a handshake and a thank-you note. Smart IT pros make onboarding part of their process. By Sandra Gittlen

Eric Schlissel, president of Los Angeles-based GeekTek IT Services Inc., likes to drop in on his 30 managed services clients and ask them to coffee. He considers this proof that onboarding - a process some providers begin and abandon shortly after the contract is signed - requires continual effort.

“Onboarding isn't just a tech process, it's about building relationships. We end up with a lot of new clients because they felt neglected by their previous providers,” Schlissel says.

GeekTek, whose clients range from 10 to 100 employees, is one of many small to midsize MSPs paying close attention to their customer acquisition and retention processes - or onboarding - to ensure maximum satisfaction.

Paul Dippell, CEO of the Service Leadership Inc. consultancy in Plano, Texas, observes that some MSP executives and sales teams shy away from the topic of onboarding. Instead, they rely on 30- to 90-day trial periods to compete with their larger counterparts - a move he considers a grave mistake.

“Smart MSPs use the discussion of their high-quality onboarding process as a differentiator and to manage expectations during the sales cycle,” Dippell says. Without onboarding, it's difficult to express the value of managed services in a way that will make the customer want to sign on to a multiyear contract. “And without solid onboarding, it's harder to provide a desirable customer experience at a profitable price,” he notes.

Schlissel finds onboarding to have a learning curve that most companies hit on day one. “Onboarding starts the first time you go to a [potential customer's] office or get on the phone with them,” he says. “How they feel during that first encounter sets the tone and is an important component of onboarding.”

In fact, GeekTek uses a self-developed, 30-point checklist for customer onboarding, which covers technology, processes, and people. “We've learned that you have to respect internal processes and how companies operate or you'll rub them the wrong way. They expect you to be a trusted adviser, not a tyrant,” he says.

That said, Schlissel is opposed to forcing clients into the increasingly common practice of standardization, where MSPs streamline all clients' hardware, software, and procedures. MSPs use standardization, which can sometimes lead to an immediate rip-and-replace, to contain staffing and budget costs.

“We're not hard and fast about making sure everything is of a certain vintage and we rarely say we won't support some technology,” he says. If the team finds infrastructure or procedures that are out of date or incompatible, they propose a roadmap with transitional period options such as loaner equipment. “We say, 'We'll continue to use this server for now, but at the end of the year, you'll have to replace it. This is what it will cost and what the benefit will be,” he says.

Concord, Calif.-based Entisys Solutions Inc. handles onboarding similarly. “Customers don't want to hear that we can't run their environment without the right technology. So we take a lifecycle approach to collaborating with them,” says Mike Strohl, CEO of the MSP, which has 20 to 30 clients.

Entisys identifies gaps during onboarding between the ideal and existing infrastructure. “We move them to a baseline that will reduce their pain points overall and we make sure everyone is on the same page,” he says.

Such willingness to support diverse environments only works for MSPs with a smaller client base, according to Dippell. As providers expand their pool of customers, they suffer growing pains and service quality hits from not having enough staff and budget to handle a broad and demanding technology footprint. Dippell finds this change occurs when firms reach above 30 to 40 clients. “As much as MSPs are terrified to impose standardization on their clients, they're amazed at how much their customer satisfaction improves, driving up sales and margin,” he says. In addition, this practice indicates an MSP's maturity level.

MSPs should tackle the issue of standardization early on in the sales cycle near the time of the technology assessment, Dippell advises. “The point of onboarding is to convert customers' IT operations, infrastructure, and user behavior to yours. You want to break a number of bad habits they have and migrate them to your good habits,” he says. For instance, standardization sets best practices for how customers budget for IT, how their users interact with IT, and how capital expense decisions around IT are made.

Security MSP Agosto Inc. is a devotee of standardization and uses it as a way to educate its 50 clients. Offering best practices enables MSPs to be proactive, says CEO Aric Bandy. “MSPs only look at managing assets. That's a missed opportunity. During onboarding, you can have a business discussion and help the client understand how technology - and standardization - can fuel their business,” he says.

A critical part of onboarding for Minneapolis-based Agosto is the on-site gap analysis, which helps the MSP discover security holes and processes that jeopardize compliance policies. Although onboarding can be done remotely, Bandy says doing so doesn't provide insight into the client's business. For instance, on-site onboarding revealed that though a client flipped its backup tapes, it failed to test the tapes' restore capabilities, leaving the firm noncompliant. Agosto, during onboarding, also reviews mobile security such as user validation, offering to help craft policies and deploy technology to shore up lapses.

At Baroan Technologies, an MSP in Elmwood Park, N.J., co-owner and vice president Dimitri Miaoulis uses the gap analysis to create a baseline of the customer's current situation and to start a dialogue. The conversation revolves around not only the company's technical assets, but its business, organizational structure, and workflow. Baroan, which has 100 clients, prioritizes the areas to be addressed and drums up a timeline based on the client's budget and immediate needs.

Synergy between sales and tech teams is also essential for a successful onboarding process. Sales must be aware of the client's business needs, such as PCI compliance, and convey them to the tech team, Bandy says. For instance, if the customer is a retailer, then sales should understand and relay the importance of password resets. He adds that tech teams have to be business savvy. “If they only have a tactical view, they might not understand why a store manager calling on Black Friday needs immediate assistance,” Bandy explains. “There has to be harmony between what was sold and what is delivered.”

GeekTek's Schlissel agrees that disconnects between sales and engineering can be detrimental. “A lot of things go wrong when expectations are set during the sale that are just unrealistic,” he says. Schlissel participates in selling and is particularly careful during the transition phase from prospect to lead to client. “You don't want to commit to too many services beyond your traditional offerings. Disappointment is very hard to recover from,” he says.

Just as important as identifying the proper team on the MSP side is doing so on the client side. If the point of contact is the receptionist or controller, he or she might know the most about the computers, but won't have authority to make business decisions, Bandy points out. Therefore, Agosto requires an executive sponsor to be part of onboarding, especially during client negotiations and fulfillment, including contract signing and roadmap sharing. “Otherwise, if things go wrong, as the provider, we would get the blame,” Bandy says.

Baroan's Miaoulis insists on plan and contract clarity among all parties. He spells out the process, next steps, and intended results for everyone involved as part of onboarding. In addition, he lays out available packages and agreements, along with SLAs, escalation procedures, and support policies. “If the client understands all this ahead of time, then there are no misunderstandings and less chance of problems down the road,” he says. Perhaps most critical is to get signatures showing you reviewed the agreement with stakeholders. “I'm pretty sure we have all been caught at least once in that conversation of, 'You didn't say that.'”

Entisys' Strohl sees his MSP peers run into onboarding problems when they cast too wide a net for customers. “Smart businesses don't try to make everyone their customers,” he says.

Dippell also has observed this trend where MSPs pitch managed services to customers they shouldn't. “They sell these services at way too low a price and then can't afford to deliver them,” he says.

For these MSPs, onboarding becomes a simple sending of a “thanks for signing up” card. Then they deploy agents and probes without identifying their processes. “Tools without process are nothing,” Dippell says.

Instead, companies should specialize and understand the demands of onboarding a customer. “You spend a lot of time with clients in the first 30, 60, or 90 days and you have to blur the lines between their business and yours,” Strohl says. MSPs can get spread too thin if they have too random a client base.

He encourages MSPs to only pick up clients who understand the value of their services and are willing to invest in a long-term commitment. If not, MSPs should be willing to walk away, says Strohl. “Customers can get caught up in the frenzy of short-term offers - and that makes them their own worst enemy,” he says.

For instance, one client left Entisys for an MSP that priced its services 80 percent less. “Within six months they were back at our door because [they realized] it's about the service,” he says.

“Clients looking for the cheapest MSP are not the clients we want,” is the motto that Morris Tabush follows. New York-based Tabush, principal at MSP Tabush Inc., counterbalances what could be perceived as higher cost by creating a more comprehensive scope of services. “We include as much as we can in our plans,” he says. Other MSPs are shortsighted, tacking on more services later. Some providers, notes Tabush, try to use onboarding and due diligence as a selling opportunity, but he finds that builds distrust.

Tabush is candid about how he came to this enlightened state. “We made a lot of mistakes in our first eight to nine years. When we lost one of our biggest clients two to three years ago, we changed a lot of what we do,” he says.

To start, the firm, which has about 80 clients, slowed the number of customers it brought onboard simultaneously. Tabush found that staff and technology were being pushed to their limits, which left not only new clients, but existing ones, with less-than-optimal service. “We've definitely gotten better at utilization and knowing how to plan for future growth,” he says.

Tabush also made onboarding itself more in-depth, generating detailed reports based on a 65-point process that includes where the domain name is hosted and specifics about the network setup. He also collects data such as the lead contact, check signer, printer manager, and more. “We now understand everything about a client, including their infrastructure, software, users, and culture,” he says.

This legwork helps avoid serious issues that previously could have caused downtime. One client, for example, required a weekend to remedy an overly complex group policy - a problem Tabush says could have been addressed in routine maintenance had it been found during the onboarding assessment.

Another drastic change that Tabush plans to make this year is basing sales commissions on a client's first year of revenue. He wants to deter the sales force from bringing in untargeted contracts. “All sales now have to be approved by a partner,” he says.

Executives at smaller MSPs are used to being the face of the company, but as the business grows, this strategy can bring on headaches. Chief among them: One person can't give 24/7 attention to a large client base.

“Pitches should always be a team-centered deal,” Service Leadership's Dippell says. “Principals should make sure that the client understands doing business with the firm means doing business with the whole team.” He likens the optimal scenario to an airline's loyalty program. When members call, all operators have access to their information, such as status and preferences, and can answer their questions.

“When you start out, you're flying with talent. But as you grow, you need a plan to replicate this out to the team,” says Todd Colbeck, president of the Miami Beach, Fla.-based Colbeck Coaching Group. “You have to paint a picture of your process and team more than yourself.” He advises clients to sell the team approach as a benefit.

To ensure everyone is in unison, Colbeck recommends using business management software such as Autotask, ConnectWise,, or Tigerpaw. During the onboarding process, sales, business, and tech teams can enter notes about their interactions with the client.

This information could lead to upsell opportunities as well. As tech teams carry out their assessments, they can alert the sales team to issues their services could solve. “People are likely to buy more right after they bought something. MSPs should have cross-sell and upsell offers built into the onboarding process,” Colbeck says.

Finally, Colbeck says companies should ditch intuition in favor of cold, hard facts. He recommends that MSPs survey their customers about the onboarding process and other factors to measure loyalty and satisfaction. “There's a big difference between the two - loyalty is what grows your business,” he says.

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