As unnerving as it may be, you’ve come to the conclusion that transitioning from break-fix to MSP is the right thing for your IT business. Let’s face it, the old break-fix model operates in a similar manner to a plumber – you make money every time your client has an IT problem or when disaster strikes. But the longer you rely on your clients’ IT failures to make a living instead of preventing them, the more you risk compromising your opportunity to deliver Managed Services and bring in more predictable revenue.
In the SMB market, 59% of IT services have transitioned from maintenance and repair to a Managed Service model. [Clutch, January, 2016]
The 10 Secrets to Success that Every MSP Should Know: Find out what others are doing to stay on top of their game.
Why is the Managed Services Model Valuable for Both Clients and MSPs?
It just makes more financial sense for your business. Take a look at a few crucial benefits of the MSP model:
- It provides peace of mind
- It provides access to IT expertise
- It provides 24/7 availability
- It establishes a meaningful relationship with your clients
- It focuses on strategies to outperform your clients’ competitors
- It delivers a proactive IT approach and data security
- It improves day-to-day operations and creates workflow efficiencies
What your client gets: They’ll appreciate the convenience of having a problem-solving team at their disposal. They feel safe knowing that you’re taking preventive measures before any unhappy issues occur.
What you get: You’ll benefit from predictable revenue and having more control over the cost of operations. You’ll also have more time to focus on developing good business strategies to help you maintain your path to growth. If that’s not enough to excite you, here’s more:
The MSP market is expected to grow from USD $152 billion in 2017 to USD $257 billion by 2022. [MarketsandMarkets]
The Do’s and Don’ts of Transitioning from Break-fix to MSP
Wondering how successful MSPs made the switch? Here are some lessons from real-life experiences.
1. DON’T try to be everything to everyone
To become a successful MSP, you have to operate like one. What does that entail exactly?
Stop accepting requests for break-fix work. Karl W. Palachuk, a renowned public speaker and one of the pioneers of Managed Services, says it’s important to build your MSP business model with rules and values that match your goals.
Then, make sure you apply this model to all your clients right from the start and stick with it. It’s a good way to stay efficient and in control of your daily operations.
2. DO educate your clients on the value they will receive from Managed Services
People don’t always understand their technology needs and they certainly can’t predict when their systems are going to break down. And when they do, there’s no guarantee that their problem will be resolved immediately.
A Managed Services contract can prevent small problems from snowballing into disastrous losses. And of course, you should add value to your offering with data security, cloud backup and disaster recovery services. Not only will you position yourself as your clients’ trusted advisor, you’ll be able to build solid relationships with them.
Here’s one Managed Services Provider who left the world of traditional IT support and increased its revenue by 30%!
“Our clients are not computer savvy. They are typically in the “late-majority or laggard” phase for adopting new technology. They were used to having servers, software and technicians on-site, and calling us when they ran into problems. This was a significant change that took both time and client education. The trick was not to talk about ‘Managed/Cloud Services’ as new technology, but as a way to provide consistent IT Support costs, preventative/proactive support and to be able to tailor that support to their specific requirements. That just came in a bundle that happened to be called “Managed/Cloud Services.”
Of course, this is just one example. You have to build a unique value proposition that differentiates you from your competitors.
3. DON’T give in to time-consuming, profitless client demands
You’re there for your customers every time they need you. No matter how many times you give them preventative recommendations for their network, they don’t listen. Either because they don’t want to spend the money or they never seem to believe their hardware will break again. Until all hell breaks loose.
Stop allowing your clients to be so dependent on you that you get stuck in a never-ending loop of fruitless IT support. For example, clients with outdated systems who plague you with perpetual problems but won’t or can’t invest in their IT systems will cost you too much time and money over the long run.
For some of you, it may mean finding new clients who want a consistent support package tailored to their needs.
4. DO know your target audience and focus on them
Do you know who your potential buyer is? What industry they’re in and their pain points?
Once you have these answers, pursue your prospects and turn them into opportunities.
Tip: It’s a good idea to specialize in one or a small handful of vertical markets because it enhances your value and profitability (a specialized MSP is able to charge more for technology and their services).
Even if you have to flush your current break-fix clients who drain your resources and precious time, you should create a clear message that emphasizes your MSP model in order to generate new business. Start by updating your website. By targeting your prospects, you’ll set yourself apart as an MSP, rather than as a jack-of-all-trades and master of none.
5. DON’T rely on referrals to grow your business
Not completely, anyway. We agree that some of the best customers come by way of referral from other customers, but your business can’t afford to leave this important sales channel to chance.
6. DO build a user-centric marketing plan to drive leads to your sales funnel
Most MSPs are in business because of their tech or engineering skills. Most likely, marketing or sales is not your strong suit. That’s okay!
With some strategy, any MSP can generate a steady stream of sales leads.
Set up an online presence where your prospects can find you – Facebook, Twitter and LinkedIn are effective tools for your brand awareness. Your strategy should revolve around offering rich content that aims to educate your audience about the Managed Services approach.
To guide you in the right direction toward a multimodal marketing strategy, try our free campaign-in-a-box to generate qualified leads and prospects faster.
7. DON’T assume your break-fix clients don’t want Managed Services
As Palachuk states, many IT service companies operating on a break-fix or per hour basis aren’t able to make the switch to Managed Services because they’re quick to assume their clients wouldn’t go for it. They think their clients aren’t interested in paying a monthly fixed rate to manage their entire IT infrastructure.
If you fall in this bucket, there’s an easy way to seize this opportunity. All you need to do is ask them!
Here’s one way. You can approach your clients with a Managed Services contract offer. Make sure the proponents of your offer outlines the following:
- Duration of contract: e.g., minimum 12 months
- Monthly rate and method of payment
- Operating hours, response time, additional fees or charges for after-hours work
- The services you provide (and don’t); the devices you cover (and don’t)
- Remote and/or on-site services
You won’t be losing anything from proposing a better plan to drive cost savings and enhance efficiencies for their business. Actually, you might be surprised by their answer.
Finally, align yourself with the right vendors that will support you throughout your switch
Competition in Managed Services is tough. If you don’t differentiate your value, you risk lagging behind and hurting your business in the long run.
When you create a channel partner alliance with a trusted provider, you’ll automatically gain a foothold in a crowded market. A Cloud Solutions Provider like Sherweb not only relieves you from the burden of managing infrastructure and software, but also gives you a competitive edge and strong economic advantages.