THERE ARE TWO lucrative incentives for MSPs to formalize their training resources and offer them to SMB clients: revenue and cost savings.
Atlanta-based Vector Choice, an $8 million MSP, has long provided free training videos to its clients for the cost-savings benefits. After all, a better-trained client means fewer help desk tickets—and fewer help desk tickets, in turn, mean wider margins in client service agreements.
“We do a Tech Tip Tuesday,” CEO Will Nobles explains. “A short, 30-second video on how to do something—how to add a signature in Outlook or reset a password, for example. We send it out to all our customers and end users. We do that as a freebie.”
Now, however, Vector Choice is expanding its training offerings to become more of a revenue-generating service. The MSP’s FY22 plan includes the addition of its first full-time, in-house trainer position.
Vector Choice isn’t alone in seeing the opportunity for training revenue. According to Rex Frank, vice president of Pax8 Academy, an MSP education platform, more and more MSPs are recognizing that “training can be a significant source of both project and recurring revenue.”
As Frank explains it, so-called “training as a service” squares neatly with the MSP role of “trusted adviser.” The more help you can provide an SMB in meeting their particular business goals, the more likely it is that they turn to you for additional help down the road. “You have to muscle your way into talking about their business goals,” Frank says. “The more you train and educate, the more you’re going to learn more about the issues and about other ways you can help.”
Harbor Computer Services of Royal Oak, Mich., has long seen the sales benefits of a full-time trainer.
“The days of that tech person who just fixed broken stuff and didn’t want to talk to people are dwindling rapidly,” says Harbor Computer Services owner Amy Babinchak. “What I tell my staff is, ‘Yes, we have to fix things, but we have to show our clients how to get value of out of the things we’re doing.’”
When to Add a Trainer
Like any other service offering, the question of what training options to add, when to add them, and what to charge for them will vary from one MSP to the next. Harbor Computer Services, for one, added a trainer early because it jibed with its culture as a consultancy. Babinchak doesn’t believe the company will ever need more than one full-time trainer on staff, however. “I think this will become everyone’s job,” she says. “I can look forward and see the day when all my techs are doing this type of work.”
Vector Choice is adding a formal trainer position out of necessity. Training responsibilities have largely landed on Nobles, and he can’t keep doing it. “You’ve got to do a PowerPoint, come up with a speech and perform it, answer a bunch of questions, and it sucks up too much of my time,” he explains. “It’s billable, but I’m running out of bandwidth.”
If he could go back, Nobles says, he would have hired a trainer “around the $5 million mark,” adding that his company has undoubtedly left a fair amount of revenue on the table in recent years. “We probably did about $150,000 last year in training without pushing it. If we had a trainer and marketed it, I’m sure we could have made more money.”
To budget for the addition of a full-time trainer, Frank suggests adopting the “Three Times Rule.”
“We talk about engineers needing to produce revenue at three times the rate of their pay,” Frank says. “With a new offering [such as training], I’ll use a fractional resource until we get to 1x or 1.5x.” In other words, Frank will give a full-time employee the part-time role of trainer until those duties can fully support an entire salary.
“Once I get to 1.5x,” he adds, “I’m happy to have them then focus entirely on that role with the goal of getting to 3x.”