How Cloud Service Bundles Can Boost MSP Profits

The cloud’s not the future. The cloud is the present. Chances are you already know that and you’re asking yourself the all-important question: how do I capitalize on cloud transformation?

The goals are clear enough. Make more sales. Maximize profits. Grow your business. There are many ways to get there, some easier than others. One strategy that has been proven to work, though, is bundling.

What’s a bundle?

A bundle is an offering of core services sold as a single unit. As a customer you see them and buy them all the time. Are your home internet and cable TV provided by the same distributor? That’s a bundle. The meal deal at your local fast food joint? Also a bundle.

In the case of managed services, a typical bundle consists of several licenses sold for solutions in productivity, security, compliance, backup, and so on.

Why should I offer a bundle?

Because it works. And by that, we mean it works for your customers, which is what really matters.

Most customers aren’t technical experts. They don’t care about the finer details. Information fatigue is real—people just want their services to be operational and available when needed.
It makes their lives easier. They get one invoice and they have all the basics covered.

Need another reason to offer a bundle? Simple: if you won’t, your competitors will. In fact, most already do.

What’s the added value for my business?

Ease of use for your customers means fewer headaches for you. First, you won’t need as many technicians and you’ll spend less time providing support. Since all of your MSP’s services are hosted in the cloud, the customer is always using the latest versions tools and software, fully patched and upgraded. And with a bundle, this uptime is guaranteed across even more business areas.

And then there’s the holy grail: profitability. Cloud service bundles are well worth it. The secret? Unused licenses. More on those in a second.

How do I build a bundle, then?

Let’s have a look at some proven best practices. Positioning is key!

Your bundle should be big, bold and beautiful. Don’t break it up, don’t make it a build-your-own; make sure it’s broad enough to cover common pain points of all customers. Remember, the goal is to simplify their life.

Make it a unified package that every client wants to buy. It’s okay if they don’t use all the available services—you don’t watch all your TV channels, either. But you’re happy if you always have access to the ones you do care about. Licenses are sold in packs. For example, you can include 5, 10 or 20 Microsoft 365 licenses in your bundle.

That’s all well and good – do you have any sales tips, though?

What if you sell 20 licenses to your customer, but they really only need 16? That’s a question many MSPs lose sleep over. But here’s a beautiful twist: the clients don’t. Real-life research shows that’s not how clients react or think, just like you wouldn’t ask for a discount on a five-door hatchback if you’re only ever going to use four doors.

What they want is a smooth service that’s affordable, even if they don’t use it fully. In fact, many clients appreciate the peace-of-mind of knowing that if they suddenly need more licenses, or licenses that only get used every now and then, they’re there at no extra cost.

So, in a typical scenario, some of the licenses go unused—and this is precisely where bundling gets immensely profitable. Your revenue will vary slightly from month to month, but it will vary in a vastly different league than with traditional software. Tip no. 1, then, is to always sell licenses in packs.

Tip no. 2: show your clients why the services included in your bundle are essential. The key word being ‘show,’ not ‘tell.’

When it comes to security, for example, just look at the daily headlines. Security and privacy breaches are now a fact of business life, and every company needs to protect themselves before a catastrophic attack occurs.

For backup, the cloud is a clear winner in the event of truly unforeseen circumstances. Save a physical server in a flood or flick a switch to restore operations in seconds? It’s a no-brainer, really.

You can even throw in a few hours of ‘free’ training each month on topics such as security and disaster recovery.

On a related note, don’t forget to make your bundle offer broad enough. That’s Tip no. 3. You can always have a few minor additions available as extras, but all the basics really need to be included. So, when a customer approaches you and says ‘I need X,’ or ‘I have a Y problem,’ you can prove your value by replying, ‘Yeah, that’s all included in your bundle. Let me show you how to use it.’

Compliance, for instance. Personal data protection gets more complex every year and companies are faced with potentially liquidating sanctions for each and every infraction. But if you offer compliance solutions as a part of a larger compelling package, your clients will thank you.

These are all unique selling points for your cloud service bundles. They’ll help reinforce the notion that managed services encompasses a lot more than merely a bunch of Microsoft 365 licenses. For you, this means an increase in recurring revenue.

And as for Tip no. 4: don’t be afraid to take the plunge! You need less bandwidth than you probably think you do. Invest some time and energy now to reap long-term benefits. It’s the definition of a win-win: you’ll save resources, increase your recurring revenue and modernize your offering. Your clients will streamline their operations for a fair price—and they’ll love you for it.

How do I get started, then?

The right value-added cloud solutions partner with proven expertise can help put your MSP business on track to reach and accomplish its MRR goals.

When it comes to your cloud service bundles, Sherweb can help you:

  • Find out which services to include in your bundle
  • Add tried-and-tested features and products to your bundle
  • Determine different price points for clients
  • Distinguish your offering from the competition
  • Optimize tech support

Become a Sherweb partner to get started. Happy bundling!

P.S.: Want to future-proof your business? Sherweb offers a whole series of online events to help you gear up for the future of managed services. From proven best practices to strategic business plans and from learning opportunities to 1:1 sessions with MSP experts, Accelerate 2020 has it all. Register now!

Guest blog courtesy of Sherweb. Read more guest blogs from Sherweb here.