Before adding new managed services to your portfolio, master the ones you already offer or else risk spreading yourself too thin.
By Rich Freeman
Looking for hot new managed services to offer? According to speakers at the ChannelPro SMB Forum, held March 14th in Orlando, Fla., you may be focusing your attention in the wrong place. In a session on profiting from the next wave of managed services, panelists urged MSPs to master the fundamentals of selling and supporting the services they already deliver before adding new ones.
“It all comes down to the lowest common denominators,” said Tony Francisco, president and CEO of VAR Dynamics, a private-label, software-as-a-service vendor with headquarters in San Jose, Calif. If your website, voicemail system, and billing practices are anything less than thoroughly professional, you’re not ready to enter new markets like managed print, no matter how promising they look.
Alex Rogers, CEO of Bakersfield, Calif.-based hardware-as-a-service vendor CharTec, agreed, noting that in his experience few MSPs can even articulate a value proposition for their company without resorting to familiar standbys like great service, deep technical knowledge, and fast response times. “Everybody’s saying the same thing,” he observed, which gives customers no basis for choosing between one provider and another.
Most MSPs need to refine their sales techniques too, Rogers argued, by learning to build pitches around a customer’s business needs rather than the product they’re trying to sell. “No matter how great that product is, if the client doesn’t need it or doesn’t see a value in it, it doesn’t matter,” Rogers observed.
Only after you’ve established solid relationships with your customers, Rogers continued, should you begin adding new revenue streams. Start first, however, with core services like backup and disaster recovery and managed security, which a surprising number of MSPs don’t offer yet. Professional services, such as strategic consulting and vendor management, can be great income boosters as well, Rogers added, especially if you’re one of the many MSPs that already regularly performs such tasks but doesn’t charge for them.
Not surprisingly, Rogers cited hardware-as-a-service as another profitable add-on opportunity for MSPs. Just be sure to market it properly, he cautioned. If you offer it as a separate service with its own rate plan, your client is likely to decide the cumulative cost is more than they want to spend. Better to include hardware within a larger bundle of services and position it as something you’re providing for free to help improve the client’s network and desktop reliability. “Do it any other way [and] you’ll fail,” Rogers warned.
Though MSPs shouldn’t expand into more exotic services like managed videoconferencing and VoIP until they’ve covered the basics, offering such products eventually should be part of every MSP’s long-term plan, Rogers said, because even the most loyal customer won’t hesitate to leave you for a competitor who has capabilities you can’t match. “I don’t care if it’s your mom’s company,” Rogers joked. “Guess who’s getting your mom’s business?”
Francisco, meanwhile, used his own past experiences as an IT provider to illustrate why careful planning and preparation are so important for MSPs. “I failed my way to success,” he said. MSPs who build their company correctly from the ground up can reach the same destination far less painfully.
For more from the SMB Forum 2012 sessions:
