Break-Fix Customers: Keep Them or Dump Them?
Normally, I like to keep my blogs to advice and tips on how to market and sell managed services. This month, I am going in a different direction. I want to ask you a question that I am unsettled on. I want to hear your opinion and get your thoughts on this. After making the switch to a managed services business model, what do you do with customers who refuse to give up your break-fix services?
Do you fire them or keep them on as break-fix clients. A lot of my Virtual Administrator partners ask this question, and I honestly don’t know what the correct answer is. I understand and get both arguments. My conundrum is that they both have valid points.
Here is my take on both sides.
Three arguments for keeping them on as a break-fix client:
- The economy is tough. It makes no sense firing long-time paying break-fix clients in favor of new unproven managed services ones.
- When the economy improves, the break-fix clients are likely to switch to managed services anyway. Let’s keep them on and hope to convert them down the road.
- Keeping your break fix clients on will help pay the bills while building your managed services business.
Three arguments for cutting them:
- Break-fix clients always nickel and dime you to death. They argue every bill you send them, so why keep them around and waste the effort.
- Your managed services business model becomes cloudy and difficult to build when you are offering both break-fix and managed services simultaneously. Having clarity and a single mindedness with your business model makes building a business easier.
- Doing work for break-fix clients will detract from the attention you should give your better paying manages services clients. Trying to balance both can be difficult, and you should focus your efforts on the long term managed services business.
If I were starting a managed services practice from scratch, I would focus my 100% effort on acquiring just managed services clients. No break-fix customers for me. I think it makes your business easier to build when you have a single minded focus. If owned an existing break-fix business making the change to managed services, I would think long and hard about firing my break-fix clients. I would enact a plan to slowly wean my business off of them until I had adequate managed services clients to pay the bills.
So what do you think is the right answer?
Paul Barnett is marketing director for VirtualAdministrator, which offers hosted solutions for managed service providers. Read all of Paul’s guest blogs here. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor’s 2010 Platinum sponsorship.