How to Transition Completely to Managed Services
Making the switch from break/fix to managed service provider (MSP) might still be giving IT providers pause, but there’s no questioning the opportunities this business model brings. The growing dependence of companies on IT solutions and infrastructure to drive business productivity will only expand these opportunities. Apart from revenue generation, advantages associated with the execution of managed services also include considerably reduced IT operational costs and enhancements in organizational efficiency, among other benefits.
The market size of global managed services is projected to reach $552.35 billion by 2028 with an expected annual growth rate of 12.7% CAGR through to 2028. While the break/fix model ruled the market for a long time, managed services offer consistent and constant monitoring of systems, intending to avoid failures and service interruptions as much as possible. Other managed services such remote monitoring allow the service providers to constantly track what’s going on in their clients’ IT environments and fix issues directly. On top of additional opportunities for consulting, change management and digital transformation, it’s no wonder the MSP model is now dominating.
Dos and don’ts for transitioning from break/fix to MSP
Transitioning from the break/fix model to managed services isn’t always easy—plenty of IT providers struggle with the change. The payoff, however, is well worth the effort.
Broadly speaking, MSPs experience more efficient time management and increased stability than providers who rely on break/fix contracts alone. By extension, clients experience less downtime and enhanced IT support through their ongoing relationship with you, their trusted IT advisor.
If you’re considering making the jump from break/fix to MSP, the following dos and don’ts can help ease the transition.
DO: Educate customers on the value and benefits of managed services
It’s vital to highlight what’s in it for your customers. The saying goes: “sell the cake and not the ingredients.” Make sure your clients know and understand the value they’ll receive from your offerings by showing them the bigger picture; paying a fat flee for a package of services will give them more bang for their buck over time than separate, stacking fees for a la carte services.
Doing this moves the discussion away from just features and towards benefits for the customer, making it easier for end users to comprehend the value of your offering. People don’t always realize their technological needs and can’t predict when their systems break down, which is what makes ongoing managed services so much more attractive than a break/fix relationship.
DON’T: Juggle priorities and overcommit
Constantly juggling multiple responsibilities for individual clients significantly impacts your performance and operations. Upon deciding to switch to an MSP model, you should therefore reduce or stop altogether the number of break/fix jobs your business accepts. You don’t want to open up a promising new revenue stream only to find you can’t support it due to time constraints caused by other ventures.
Form your MSP business model with values and rules aligned with your specific objectives. Then, ensure you incorporate this model for all your customers from the beginning. It’s an effective way to stay in control of your routine operations and to ensure you don’t over promise on service delivery.
DO: Study and focus on your target audience
For a successful transition and long-term growth, it’s imperative to know and understand who your potential customers are: what industry they’re in, their concerns, their pain points, etc.
Once you have answers to these questions, you can pursue those prospective clients and convert them into opportunities. It’s a good idea to concentrate on one or a handful of vertical markets as it can improve your profitability and value, meaning you can earn more for the same services deployed in a different sector.
Even if you must get rid of existing break/fix customers who drain your precious time and resources, crafting clear message that showcases your new MSP business model to your target audience will more than compensate for the business you lose.
Focus on the greatest business value and customer experience that your company delivers. You can also leverage your expertise in vertical markets as a differentiator when crafting your marketing messages to better help you reach your target audiences.
DON’T: Agree to profitless, time-consuming requests
Similar to no longer accepting break/fix contracts, it’s equally essential not to bend to unreasonable client demands or requests that don’t serve you during the transition process. Some clients will always depend on you for help. To properly set expectations, introduce SLAs that necessitate these clients to upgrade hardware or software as necessary or adhere to specific requirements in order to do business with you. Refusing to let your clients rely on you for (unscheduled) maintenance and support will keep you from getting stuck in a never-ending circle of unproductive resolutions.
For example, imagine a customer with outdated, vulnerable systems who plagues you with ongoing problems, but won’t invest in their IT network. The SLA you draft as part of your transition from break/fix to MSP would outline base parameters (such as keeping networking infrastructure up to date) the customer must now meet for working with you. You’ll no longer have to make time in your schedule to respond to their unscheduled request, resulting in extra time and money back in your pocket.
DO: Build a targeted marketing plan to drive leads
Many MSPs are in business because of their engineering or tech skills. Sales and marketing aren’t always within their scope of expertise. That’s okay! With a robust strategy and solid planning, MSPs can generate a stable stream of quality sales leads without being expert marketers.
Set up your company’s online presence where prospective clients can easily find you. Social media platforms such as Twitter, LinkedIn, and Facebook are all powerful tools for brand awareness. Your approach should focus on generating and offering valuable related content that informs your audience about the managed services approach.
DON’T: Rely on referrals alone to grow your business
While some of your most valuable customers may come through referrals, your business can’t rely on word of mouth alone. There are myriad opportunities for growing your business and strengthening your customer relationships.
Your marketing strategy is just one opportunity. You should also seek out customers where they already are, such as tradeshows, industry associations and online communities. If you aren’t actively doing this, your competitors will scoop up your potential managed services clients before you get a chance to prove your worth.
Making the leap
Transitioning to a pure-play managed services model isn’t always easy. You need to take the appropriate steps—making sure you have adequate resources, expertise and client base, for example—to ensure the switch is feasible.
Taking the advice above into account can help you smooth out the process but working with the right partner can make your transition from break/fix to MSP even easier. Explore Sherweb’s Partner Guide to learn more about how your business can benefit from teaming up with a value-added cloud services provider or reach out to us to start a conversation.