Becoming a Managed Service Provider (MSP) has been a hot topic for several years now; so much so that I heard a comment at a recent conference that managed services is now a commodity offering. Everybody is doing it, and whoever is jumping in now is way too late. My opinion? Not so fast! Here's why.

November 19, 2010

4 Min Read
Four Critical Stages to Securing A Customer for Life

By Len DiCostanzo 1

success_keyboard

Becoming a Managed Service Provider (MSP) has been a hot topic for several years now; so much so that I heard a comment at a recent conference that managed services is now a commodity offering. Everybody is doing it, and whoever is jumping in now is way too late. My opinion? Not so fast! Here’s why.

Simply becoming an MSP is not the end game, and being an MSP should not be the destination. Successful solution providers build a managed services practice over time, bolting managed services onto every implemented solution. Those solutions, based on your vertical focus and expertise, are what differentiate you from your competition. And, with that solid managed services practice, you have an opportunity to ascend to the role of trusted advisor, CIO, or primary consultant, and strive to secure your clients for life. That’s right. As long as you both are in business, you and your client should be  joined at the hip!

Four Steps to Success

Having worked with thousands of end clients and solution providers in the IT channel for many years, I’ve determined there are four critical stages to securing a client for life.

1. Engage your prospect in a consulting relationship with the goal of understanding their business needs and wants. A good consultant should already know what technology solutions can be implemented to resolve business needs. That knowledge comes from having already resolved the needs and problems in that vertical many times before with a solution set that works. Look to engage prospects in the vertical markets you are experienced in. As a result of your consulting activities, you will provide recommendations for one or more solution sets that will facilitate the outcomes desired by your prospect.

2. Deliver one or more of the recommended solutions your clients need. Execute the work you can do directly as a core competence, and manage other vendors to drop in solutions for those you can’t. Like the construction manager on a 50-story building, you don’t have to do all the work. You just have to manage the resources to get it done. It’s a role I like to call the technology manager. By managing your work and the partners you bring in, you begin to show you can let the client focus on their own business, not the technology that enables it. That dependence makes it easy for them to see the benefits of the third stage of securing a client for life.

3. This is where managed services come in. Managed services continue your effort to go deeper and wider in your new client’s organization. Once your solutions have been implemented successfully, you are ready to bolt on and deliver the managed services necessary to manage and maintain them on a recurring, scheduled basis.

Here is where the commoditization of managed services becomes irrelevant. After expert consulting and solution delivery, there should be no reason for your client to look elsewhere for someone to provide managed services to support them over time. You have earned that position; now ensure your clients get the most out of their investment by keeping the deployed solution components humming so they can accomplish what the business has to do to be successful.

4. Finally, use managed services monthly operational reviews (MOR meetings) and quarterly executive reviews with your client as the springboard to becoming their trusted advisor. Those MOR meetings demonstrate to your client that you did what you said you would, and will continue into the next month. Highlight any operational concerns or issues, stay in touch with what is going on in the business, and try to secure additional work. The quarterly reviews should be at the executive level, with the goal of preparing a year-end summary that includes recommendations for next year’s business technology budget – a budget that becomes part of your revenue forecast for next year.

If you are working with the SMB market, this should lead to you becoming the IT department for the organization, and give you the responsibility for the technology infrastructure – both products and services – that keeps their business running. If you work with larger organizations, you may not replace the internal IT staff, but you can become an indispensable resource for them in a very similar way, augmenting and supplementing their efforts in key areas.

Now, securing a customer for life is a very hard thing to do. A lot can happen during your relationship that could cause you to break up: client management could change; your primary contact could leave; they don’t pay their bills; or they get acquired, and so can you. But like marriage, with compromise, hard work and perseverance during the critical four stages, you could make it together forever. Or, at least for quite a long time!

Len DiCostanzo is Dean of Autotask Academy and Senior VP of Autotask Corp., developers of Autotask hosted professional services automation software, the VARStreet family of advanced quoting and e-commerce tools and Taskfire a hosted service desk and ticket management system sold by IT solution providers for businesses of all sizes with internal IT resources. Monthly guest blogs such as this one are part of The VAR Guy’s annual sponsorship.

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