Ask an MSP Expert

Q: I’m having a hard time converting the last of my break-fix customers to a managed service contract. How do other MSPs show small business customers the value in IT services, and how can I convince the last my break-fix clients that it’s worth the investment?

Unfortunately, many small businesses would rather save their money and risk losing the critical data that keeps their business running and profitable. However, most SMB customers don’t know how costly downtime can be—it costs approximately $8,662 dollars a minute on average. To help SMBs to truly understand the value of investing in IT, they need to be educated on benefits of managed services.

When we saw your question, we reached out to the experts — your MSP peers — to find out how they approach reluctant prospects and win their business. We also spoke with Neal Bradbury, senior director of business development at Barracuda MSP, for his input on how to articulate the value in managed services. This is their collective advice on how you can win over these accounts and convert them to monthly managed service contracts.

3 Ways to Justify IT Spend

Justifying the costs of managed services to customers with tight budgets isn’t easy, especially when they’re looking for different ways to keep their IT overhead low. There are three key benefits to mention when you’re approaching any small business prospect and selling them on your IT services.

1. Downtime prevention

To truly resonate with your small business prospects, explain that proactive maintenance and monitoring of their IT environments will prevent downtime for their business. Use our free worksheet to show them the true cost to their business when one of their employees’ workstations is down for a day or even a few hours. The lost time and productivity of that employee could have staggering effects and may take longer to recover from than they think. Assure them that with your help they’ll be able to make sure their employees are operating as efficiently as possible.

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2. Predictable budget

Budget often plays a large role in the decision-making process, so it’s important to highlight that they’ll be billed on a recurring monthly basis. This means they’ll be charged the same price each month, which allows them to budget and plan more effectively. Often, when SMBs approach their IT needs in a reactive manner, it can cost their business more headaches and more money, all without any formal budget to address those issues. Ryan Rosenkaimer of Alura Business Solutions suggests showing this value in a graph or other visual format, saying that most customers appreciate having a visual to support your claim.

3. Data loss insurance

Managed services can help protect against data loss in the event that a cyber threat or disaster strikes. Neal Bradbury says a reliable backup solution paired with security is insurance for SMBs, and for businesses to protect themselves properly, they need to pay for it. As you’re talking with your customers, articulate this point and help them to understand that having managed backup and security could save their business in any number of data loss scenarios, including recovering from a ransomware attack. More than 70 percent of ransomware attacks target small businesses, so having this extra precaution in place can prevent them from paying a high ransom.

When to have the conversation

Share your value propositions with prospective customers during the proposal stage in the sales process. Chris Cable of Techworks Consulting Inc. finds it helpful to bring facts and examples to show the customer during their evaluation. During this conversation, Chris suggests discussing their business and how managed IT services could improve the way they work. “IT is not there to be a headache; it’s there to enhance every part of the business,” he says.

Taylor Lee of Visualutions suggests that MSPs provide specific examples of when backup solutions saved another one of their customers. An example she notes is explaining a situation where a customer had a backup strategy and their data was encrypted with malware and recovered, and then contrasting that example with a customer who went through the same situation but didn’t have a backup solution in place and wasn’t able to recover their data. Don’t try to scare the customer, but bring up real-life situations where you’ve seen businesses impacted and explain how you could save them from dealing with similar problems.

How to explain the value of an IT investment

During your conversations with prospects, try to articulate the value in your services by stressing the three key selling points mentioned above, but avoid trying to strike fear in the business owner so they don’t feel pressured. Take an advisory role, and let them know that you’re there to help them protect their businesses. Try to find a balance between educating the SMB owner on what’s best for their business along with sharing the honest truths regarding the consequences of not investing in IT.

By using this advice from Neal and your MSP peers, you’ll be well positioned to overcome objections from reluctant prospects and assure them that the investment in managed IT services is worthwhile for their business.

How to explain the value of an IT investment

Photo:  ITTIGallery / Shutterstock. 

Lauren Beliveau

Posted by Lauren Beliveau

Lauren is an Senior Content Marketing Specialist at Barracuda MSP. In this position, she creates and develops content that helps managed service providers grow their business. She also regularly writes The MSP’s Bookshelf and our Ask an MSP Expert column.

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