Many IT service providers are currently keen on moving towards providing IT managed services instead of break / fix services. This is more than just a trend, as it makes real economic sense.
Moving customers onto managed services contracts means you have more of a guaranteed revenue stream from each client, and by bundling services together, you can sometimes win a larger slice of each clients IT budget by providing services yourself instead of losing out to third parties.
Sometimes, however, you will face the problem of convincing clients of the merits of changing the way they pay for your services. Here are some tips to help you highlight the benefits.
1. Emphasise the Unpredictability of Break/Fix Support
Many clients like the break/fix model as they get to enjoy tiny invoices on months where nothing much changes and nothing really goes wrong.
However, they can then face huge, unexpected bills when something bad happens, like an Exchange server failure that requires a rebuild. Help your clients to understand that switching to managed services will mean that they have a regular IT spend that they can count on, and avoid the risk of nasty surprises.
2. Average Out the Costs
If you have a long and ongoing relationship with a customer, it’s easy for you (or them) to look at what they’ve been paying you each month and average it out across each year.
Before you go for a managed services pitch, go through this exercise and see how well the figures work out. Hopefully you’ll find that you can offer managed services to the client for a similar monthly cost to their average historical spend. If you can throw in additional services, such as system monitoring, as part of the bargain, then that’s even better.
3. Bundle in the Third-Party Services
The key to making money from managed services is taking on as much of each customer’s IT provision as possible. So think about things like online backup and antivirus. If customers aren’t getting these from you, you are missing out on (at the very least) a regular and reliable commission stream.
Try to undercut the competition, bundle it all together, and highlight the added benefit of a single invoice from a single supplier. Hopefully you will then be well on the way to convincing your client that managed services is the only sensible way forward.
Are you keen to move in the direction of providing IT managed services? Let us know your thoughts in the comments box below.
And to follow-through on the tips introduced in this short article, be sure to watch the Inbound Revenue Acceleration Webinar for Managed Services & IT Consulting.
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