I’m going to share with you the biggest key to growing your MSP that your competitors and larger Managed Services Providers already know.
Many MSPs that we work with often have 50% or 60% of their customers on break-fix agreements which is a huge mistake. If you’re actually trying to grow your business and your margins, you need to have your clients and contracts on monthly recurring revenue (MRR).
How People Mess This Up
Let’s look at some of the ways people mess this up. One way is they do a poor job of explaining the need for managed IT services. 15 to 20 years ago, when cyber threats weren’t as advanced as they are today, every IT company was billing in block-hours projects.
But with new regulatory compliance demands and the new threats that are out there, every single business, even a small one with two or three people, needs to have someone looking over their shoulder who can make sure their business is secure. They need an IT partner that can, among other things, ensure nobody is getting into their email and spoofing their email to customers or employees.
Over and over again, we hear people getting in and spoofing emails and they get a secretary to move money out of one account into another account, all through email. Or as the business owner is logging into their bank account, hackers are grabbing their credentials.
1. You Have To Be Able To Explain The NECESSITY Of Managed Services
You have to be able to explain the necessity of managed services. It’s no longer even an option.
I have members… and I agree with this philosophy… that if a client of theirs won’t allow them to manage the most basic of things, like security and backups, they won’t even take them on as a client.
I’m not saying it must be “all you can eat” but the client has to buy at least a certain level of managed services or they won’t even take them as a client. I agree with that logic because you’ve got to stand your ground. If you were an ethical doctor and you knew how to cure cancer, and somebody came to you with cancer and said, “Hey, Doc, can you help me?” and you said, “Yes, I can, and you have to follow a treatment plan.” Imagine the patient came in and said, “Well, I don’t like this whole treatment plan. I don’t want to have surgery. Can’t you just give me a handful of vitamins or something?” I don’t know of any doctor that would take that patient because it’s irresponsible. You’ve got to learn how to explain the necessity of managed services.
2. Stop Saying “All You Can Eat”
The other thing I’d warn you against is including too much. Stop saying “all you can eat.” It’s a terrible idea. Back when managed services got started, it was a little bit simpler and “all you can eat” was something maybe you could agree to. But not today. Because when you say “all you can eat,” first of all, you sound like Golden Corral, like a buffet and you don’t want to be positioned that way. But your clients also think everything is included and everything should not be included.
If one of the employees refuses to use a good password and gets the whole organization compromised with ransomware, are you going to restore their network from their backup? Is that included in managed services? No, it is not. Or it shouldn’t be. It’s a project. Unless they’re paying you a ton of money and you can cashflow that. But stop saying “all you can eat” because you’re including too much.
3. Keep Going Back To Your Break-Fix Clients To Upsell
Another mistake I often see our clients making is they don’t go back to their break-fix clients and upsell them. That’s also a bad idea. Just because somebody says “no” right now, that does not mean that six months from now, if you go back to them and you try and sell them again, the answer will be the same.
We have a break-fix to managed services campaign for our clients. There is a prepared process with emails all done and it works. Every time I have our clients do this campaign, it works.
If you want to learn more about growing your MSP, creating your managed services contracts, and converting your existing break-fix clients, attend our free marketing and sales livecast for MSPs by reserving your seat below.
