Move to managed servicesUsing the managed service model instead of the traditional break/fix model of selling time for money is a no-brainer. But what is more challenging is working out *how* to sell this new model to existing clients.

We’re going to look at how you can prepare for moving your clients from break/fix to managed services, but before we do, let’s look at what you shouldn’t try to do …

Managed services is NOT about time

Despite believing they understand the managed service model (and if you’re still unsure, here’s my definition of what a managed service provider is), some IT businesses moving to managed services try to sell it to their clients in the wrong way.

They try to sell their clients a block of time.

“For a flat fee, we’ll sell you six hours of time per month to use as you will. This should cover you for everything!” they say.

Ouch! No. That is NOT managed services.

The model of selling clients a block of time is commonly known as block-time billing. It’s sometimes used as a stepping stone by businesses that aren’t ready to commit to managed services. But it’s definitely not a managed service.

Remember, managed services is about value, not time.

How to categorise your clients

Before you begin the process of talking to your existing clients about moving from break/fix to managed services, it’s worth categorising your clients to understand those who are most likely to move across to the new model, and those who may have difficulty in seeing the true value of managed services.

I’d suggest you do this by listing all your clients and putting them into one of three buckets.

Within bucket A you should put your best clients. These are the clients who are a joy to work with. When their phone number appears on your display, you look forward to speaking to them. These are the clients who listen to your advice, trust you, and pay on time, every time. Every IT business should have at least some bucket A clients.

Bucket B clients are the clients that most IT businesses have the most of. They mostly pay on time (are late on payments once or twice a year). They nearly always listen to your advice. They are typically easy going and decent for you to work alongside.

And then there are Bucket C clients …

Bucket C clients are the ones you hate working with. They seek your advice (often) and then go and do the complete opposite. They nickel and dime you on every single quote you put forward. They want the earth, yet surprisingly, are always late to pay you.

These clients are the ones who when you see their telephone number appear on your phone you feel as though you want to quit running an IT business and go and start a fishing tackle store instead.

So what’s the point of these buckets?

Beginning the move to managed services

Well, experience has shown me that, to build your confidence and gain momentum, you should approach your A bucket clients to tell them about managed services first.

These A bucket clients are progressive. They are receptive to new ideas. They trust you and know you have their best interests at heart.

Set appointments with these A bucket clients to explain why you’re moving your business in a new direction, one focused on proactive maintenance rather than reactive support.

Most of your A bucket clients will understand why you’re making this move. They’ll appreciate the ability for them to budget better using a flat-fee structure. They’ll see it makes sense and agree to the move. Even if they have questions or concerns, these questions or concerns will be rational and logical, and will help you build your knowledge of potential future objections from other clients.

How to explain the value of an IT investment

Once you bring your A bucket clients across to managed services, your confidence will grow and you’ll begin to realise that yes, managed services is a win/win for both your clients and you.

You can then move onto your B bucket clients. Don’t expect all of them to get it. Some will need your help understanding the value over a longer period of time. But you may be surprised at the clients who do understand and want to make the move immediately.

Your confidence grows as you bring on board more managed services clients. You understand that this model DOES work and people DO see the value in it.

Clients that won’t make the move

Which brings us back to those horrible C bucket clients. These are the clients that, really, you’re starting to question why you ever worked with. They don’t value IT or your work, and they want IT dealt with at the cheapest possible price.

It goes without saying that you should be prepared to cut these clients loose. They will want compromises and deals that you simply cannot afford to offer as a business that has moved to managed services.

Don’t worry about losing these clients. Just shake hands and refer them to other IT businesses that haven’t made the move yet. You may be surprised that managing these clients out of your business in a professional manner sees them return to you at a later date when they have matured enough to understand the value of managed services.

It’s also worth being aware that you may be surprised when some of these C bucket clients DO get on board with your managed service model. As a former MSP owner myself, I can tell you that a number of my C bucket clients became A bucket clients when they moved to managed services. Who knew?

The bottom line here is that managed services is not for everyone. Some clients’ businesses haven’t matured to the point where they understand value versus time. Don’t worry about these clients — there are plenty out there who do!

Conclusion

Before you approach your client’s with your intention to move from break/fix (selling time) to managed services (selling value), it’s worth categorising your clients into three buckets: A, B, and C.

Approach those A bucket clients — your best clients — about the move to managed services first. These clients will likely see the value and move with you. When they do, your confidence will grow, and you can tackle those B bucket clients.

Do expect to lose some C bucket clients during this process. They don’t value IT, and they don’t want to pay for it. Moving away from working with these clients is no great loss. After all, they aren’t much fun to work with, and they suck your energy anyway.

Not every client is a good fit for managed services. Not every client is a good fit for you.

By spending time categorising your existing clients, you’ll know which ones can make the move to managed services with you.

It’s time well spent — and great value!

Ready Set Managed

Photo: kheira benkada/Shutterstock.com

Richard Tubb

Posted by Richard Tubb

Richard Tubb is a blogger, speaker, and author from Newcastle-Upon-Tyne in the Northeast of England. He provides expert advice to help MSPs grow their IT business, and he has helped the owners of hundreds of MSPs to free up their time, concentrate on doing what is important, and make more money.

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