Four Ways to Tip Managed Services Sales in Your Favor

Business meeting
Author: SolarWinds MSP’s Mike Cullen
Author: Mike Cullen

Most IT solution providers understand the value of selling managed services—for themselves (e.g., monthly recurring revenue, higher profitability) and for their customers (e.g., less downtime, predictable costs). However, getting prospects to see the value and benefits isn’t always easy.

Here are four ways you can tip managed services sales in your favor:

Tip 1: Identify the ideal managed services prospects

It’s often said that the best managed services clients are SMBs, but this represents a wide variety of companies that aren’t equally viable candidates. To increase success, seasoned MSPs tend to look for companies with at least 15 employees. At this size, prospects are beyond the startup stage and likely to have a couple of servers. Additionally, the business owner/decision makers are more inclined to recognize how important IT is to achieving the company’s strategic growth initiatives. Another successful play for MSPs is specializing in a particular vertical or two. More often than not, businesses in highly regulated industries need an MSP to ensure the company is and remains compliant.

Tip 2: Make sure the decision maker views IT strategically

Another characteristic of an ideal candidate is that the owner/decision maker appreciates the value IT plays in his/her business and doesn’t view IT merely as a “necessary evil.” If a prospect tends to focus too heavily on price, and there’s no positive feedback given for the value points you present, you may be better off investing your sales efforts somewhere else. That doesn’t mean taking the time to educate a prospect isn’t worth it (see below), but keep in mind the old adage, “a person convinced against his will is of the same opinion still.”

Some prospects will never grasp the concept that investing in business-grade IT equipment and paying to keep it secure and running smoothly is the smarter business choice. At some point, these companies will become the victims of server crashes and/or ransomware attacks and the downtime and data loss they experience will far exceed the cost of a managed services program. 

Tip 3: Educate prospects on the cost of downtime

Before giving up on a managed services prospect, try to find out whether they understand the real cost of break/fix IT. There are three common scenarios that contribute to downtime and are worth exploring. First, a computer crash. Whether it’s a virus or worn-out hard drive, all computers eventually fail. Unless a prospect is operating entirely in the cloud and has backup devices on hand, it’s going to experience downtime.

Walking a prospect through the process can help them think about just how unprepared they really are and how much more it could cost than they might think. A server crash is even more dramatic because it affects all employees simultaneously. Two areas where “unmanaged” companies tend to get burned are discovering too late that backups weren’t being performed (or the backups are corrupted or weren’t being performed frequently enough) or grossly underestimating the time required to build a new server. Walking a prospect through any of these scenarios can help them self-discover the value of a managed services program.

Tip 4: Security and managed services go hand in hand

When a prospect presents an objection to paying a monthly fee for managed services, it’s often because they’re only focusing on one aspect of the program, which is “keeping computers and servers running.” If a prospect does happen to have backup devices on hand and many of its mission-critical business apps running in the cloud, it’s understandable why they might hesitate to embrace managed IT services. However, today’s security threats should shatter any uncertainly and serve as a beachhead for successfully selling managed services now and in the future.

Several studies show the majority of companies’ networks are highly likely to be compromised without them even realizing it. Additionally, current industry estimates indicate the time to detection for security compromises averages 150 days. Even if a prospect’s computers and network appear to be working properly, there’s a good chance that bad things could be going on behind the scenes. By working with an IT expert that can provide them with next-generation firewalls and other security solutions—and security monitoring services—they’ll be in a better position to beat the odds.

The transition to selling managed services is a journey with ups and downs along the way. Complicating the sales process is the mindset of the buyer: a recent SolarWinds MSP survey suggests that IT leaders may be overconfident in their cybersecurity readiness. In addition, MSPs must consider that not every prospect is a perfect fit for managed services. However, when you find one that is, taking the time to educate them about the reality of security threats and the pitfalls that accompany unmanaged backup systems can go a long way in tipping the sale in your favor and earning a win-win, long-term business relationship.

Mike Cullen is vice president, customer retention & business strategy, SolarWinds MSP. Read more SolarWinds MSP blogs here.