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MSPs: Communicate Value and Stop Focusing On Price

MSPs: Communicate Value and Stop Focusing On Price

If a customer doesn’t see the business value in what you do, your services are expendable.  It’s a harsh reality, but one that we all face. As an MSP, the challenge lies in communicating your customer value day-in and day-out. For most, promoting value at the front end of the sale to earn the customer’s business comes easy.  But once the ink dries, many MSPs turn the focus to meeting the SLA (service level agreement) and recognizing the recurring revenue. The selling stops. The relationship is managed, but is the business still being earned and relationship nurtured?

Once a customer sees the ongoing stability of a remotely managed IT environment, some jump to the conclusion that all their technology headaches are gone, which can lead them to wonder what exactly they’re paying you for.  It’s a legacy issue that MSPs must address early on through constant communication, strategic pricing and a clear demonstration of business value through smart reporting and quarterly or bi-monthly business reviews.

Steps to Success

Not sure how to combat this issue? Here are several do’s and don’ts gleaned from N-able’s MSP Elite:
  1. Don’t productize your services and fixate on price.  Posting a flat-rate service fee on your web site devalues and artificially commoditizes your services.
  2. Do focus on customizing your value and the outcome for your clients by using technology to support your clients’ needs and business goals.
  3. Don’t underestimate the customer experience and need for a personal touch. Going remote has its obvious advantage, but being seen and heard face-to-face remains critical. This is a relationship business.
  4. Do establish a defendable and differentiated value proposition.
  5. Don’t be afraid to walk away from a prospect or customer.  If you’re not seeing eye-to-eye out the gate, just call it a day and move on.  More than 80 percent of the market is unmanaged. Additional opportunity is out there.
  6. Do become a valued business consultant as well as a technology provider. Listen to your clients and establish an ongoing meeting with a structured process about how technology and your services will, and are, supporting their business.
  7. Don’t just send along a canned report that shows threats blocked, patched applied and servers fixed. Consistently track, report and celebrate what your team has accomplished. Customize the report to show how your efforts have met the customer’s needs and helped them achieve their goals. Reporting is going to be huge in 2012. From compliance to general accountability, reporting both on technology and business impact is going to be core to an MSPs’ service moving forward.
  8. Do establish corporate values, technical processes and a signature of service that will ensure a positive customer experience and drive greater loyalty.
  9. Don’t sell to anyone and everyone. Assess your portfolio and focus on the right clients. Understand who your target audience is, what they need and specialize your service to meet their needs.
  10. Do have a plan.  A one-page strategic plan will help keep your team focused and on track.

More Guidance

For additional insight, see the following partner video on value-based packaging, pricing and reporting, featuring insights from J. Michael Drake, CEO of masterIT, which has been an MSPmentor 100 company multiple times since 2008.

Another good resource is the recent report called “Countering Artificial Commoditization and Poor Pricing Practices in Managed Services," written by The 2112 Group and sponsored by N-able and NetEnrich.

Mike Cullen is VP of sales at N-able Technologies, which develops remote monitoring and management automation solutions for MSPs and IT departments. Monthly guest blogs such as this are part of MSPmentor's annual platinum sponsorship.
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