I have met some very good negotiators in my day, but the very best I have encountered are children. Considering that they have almost nothing to bargain with and occupy a position of little power, kids have an innate ability to negotiate and ultimately get what they want. My teenagers are masters at working mom and dad (and if necessary, grandparents, uncles, aunts and others). Like predators working their prey, they instinctively know who is the most vulnerable in any given situation and quickly go to work using their meager resources to close in for the kill. In some cases, they know the path to getting what they want requires convincing not just the most vulnerable subjects, but mom or dad and other family members too. Like little MBAs, they identify the decision maker, stakeholders and supporters and work their skills. It is truly amazing to watch.
When it comes to selling managed services, we would do well to act a little more like children. MSPs know they need to develop a relationship with a customer’s IT department. After all, this is the heart of IT services and a logical point of contact and coordination within an organization. This is also where the average MSP is separated from the best-in-class MSPs. Top service providers recognize the inherent adversarial relationship between their organization and the IT department, and consequently the limitations it places in successful negotiations. In order to develop and win additional business, an MSP must reach beyond the IT department to decision makers and other stakeholders, including C-level executives and lines of business managers. This leads me to my fourth managed services best practice – sell beyond the IT department.
At the executive and line of business level, the conversation should logically change from technical to business. Here is where an MSP can show that they understand their client’s business and how the provider can contribute to the overall objectives of the company. The MSP advances from a service provider to a trusted business advisor, identifying business opportunities that could never have been uncovered through a relationship with just the IT department.
CompTIA’s research supports this best practice. In 2008-2009, the average MSP spent most of its time speaking to the IT department. But, the best-in-class MSPs (the top 20% in profitability) focused more time with the line of business and c-level executives than the IT department. Although this can vary from organization to organization, the C-Level is the decision maker, and the line of business and the IT department are stakeholders and influencers. The bottom line is that you need to cultivate a relationship with all three parties. As we consider these dynamics within most businesses, an MSP that focuses only on the IT department is clearly at a disadvantage to those that have a breadth of relationships inside their clients’ organizations.
As an MSP considers its sales strategy, there should be a plan in place to work all the stakeholders within a customer organization and sell business improvement services outside the IT department. By doing so, it will create deeper, more profitable and stickier business relationships with customers. When it comes to getting what we want, we would all do well to act a little more like children.