Q: We’re an established channel provider that specializes in break-fix services. However, we’re slowly taking steps to become a managed service provider. One area we’re looking for advice in is bundling services. What should we include in our basic offering?
You’re making a smart move. Being a break-fix provider can be profitable, but making the switch to a managed services offering is a great way to earn predictable monthly income and grow your IT services business. In fact, according to a recent report from by The 2112 Group and Intronis MSP Solutions by Barracuda 64 percent of the channel partners surveyed report that services sold on a recurring revenue basis are their best growth drivers. To successfully grow and scale the managed services portion of your business, it’s easiest to create three service tiers to offer to potential customers. What each tier includes can vary from business to business, but most MSPs offer three tiers: gold, silver, and bronze.
To give you additional insight on what you should include in your basic bundle, we spoke to a few of our partners and Neal Bradbury, the senior director of business development at Intronis MSP Solutions by Barracuda. While every MSP might have different standards and regulations they need to follow, these guidelines can help you determine what is best for your customers.
Neal and the MSPs we spoke with agree—bundles are the way to go. If you offer services a la carte, customers will pick and choose services, but that level of customization ultimately changes how easily you can scale or manage accounts. Instead, create bundles that include services customers should have as a best practice. By offering services on a la carte basis, you’re allowing your clients to dictate what’s best practice and what they can forego, which can lead to gaps in protection. However, if you want to scale your business, as an MSP you only want to offer a few options so you can standardize your business. It will simplify sales conversations and help you make sure all customers have at least a minimum level of protection. After all, as Neal says, standardization is how an MSP wins.
What to offer in your basic bundle
MSPs should offer remote monitoring and management, a NOC, helpdesk, anti-virus, anti-malware, managed backup, an email protection suite, and a basic firewall, Neal explains. Of course, it’s nice to have a robust solution like a next-generation firewall in place, but at the end of the day your customers should at least have a basic firewall—especially with today’s threat landscape.
Essentially, there is a standard managed services umbrella, which includes NOC and helpdesk, and then you get into the managed security portfolio and the managed backup portfolio. Three years ago, backup should have been a requirement but often wasn’t. But now, backup is a must, and you should start adding security services to your basic package as well, especially considering everything that has happened recently with WannaCry and NotPetya, Neal explains.
Examples from MSPs
To get a better understanding of what other successful managed service providers are offering to their customers, we reached out to Brent Fairbanks from Electronic and Computer Specialties Inc. (ECS) and Chris Cable from Techworks Consulting. Both have been in the managed services space for more than 10 years, and they shared some valuable input about what they offer in their basic bundles.
The basic package at ECS includes password management, managed backup, remote monitoring and management (RMM), DNS, and anti-virus services. “Find a group of products that you are comfortable with, and that is needed by all clients,” Brent advises. The trick is getting customers in the door with solutions that they need—without losing time or resources when you’re providing those services.
In contrast, Chris Cable says that their basic bundle is only monitoring and monthly maintenance for backups and patches. He advises newer MSPs to “set a baseline and not completely piece-meal your offering. You want a package that has your core offerings with what you want your standard to be and then have additional ”upgrades” only for those extra services. You don’t want the client to feel like you’re nickel-and-diming them, but you also want them to have a choice.” By giving your SMBs choices, they have more freedom to choose what is best for their business—and ultimately can invest in an offering that is right for their environment, but they will need your guidance to find the right fit.
How to handle customers that want break up the bundle
If your basic bundle is extensive, or even if it isn’t, chances are you may run into SMBs that want to forego your recommendations and break up the basic bundle. As an MSP, there are a few things you can do, Neal says. You can either decide to walk away and not take the client, or you can have them sign a letter stating that as a client they acknowledge they aren’t following best practices.
For example, sometimes SMBs do this with backup, and for whatever reason, they don’t want anyone else responsible for their data. If you decide to provide managed services for them anyway, have them sign a letter saying that you aren’t backing up their data, and therefore you are not liable for the data. The fact is, even if you do have written documentation stating that you’re not responsible for their data, chances are they’ll still call you when they experience data loss and need help. Whether you decide to take them on as a client is up to you and the policies that your MSP puts in place.
Basic managed service tiers can be challenging to create, simply because there is no right or wrong way to do it. However, creating your own unique bundle of vital services can help you get SMB customers in the door and ultimately offer them more complete solutions so they can safeguard their business-critical data from today’s looming threats.
Photo Credit: Alexander Supertramp / Shutterstock.