According to Ziff Davis Enterprise (Bright Future for Managed Service Providers, 2007), the top three issues facing MSPs today include: determining SLAs, pricing and transitioning customers to managed service.
Fortunately, MSPs can turn to key resources to help hone their skills, keep abreast of industry trends and learn from the experts. The unique needs of Managed Service Providers require access to strategic business insight for issues like business transformation, growth management, lead generation, sales training and positioning.
They also need to keep their finger on the pulse of the industry with immediate access to tools and resources that can help them to establish and maintain that competitive edge.
It is common in the industry for vendors to join forces with complementary technology solutions, training and education experts and resource providers in order to expand their capabilities and ensure the successful implementation and usage of their products or service. By pooling resources, companies can provide a complete end to end solution that is clearly greater than the sum of the individual parts.
Working closely with your customers, you discover the areas of assistance they may require that may be better served by partnering with an organization with that specialization. Teaming with industry leaders to deliver results programs targeted specifically to the unique needs of your customer can result in a comprehensive blueprint for success.
It’s equally important that the partners you choose share in your belief that partnering is a key success factor where your mutual customers are the definitive beneficiaries.
While many vendors such as Kaseya offer training, toolkits and other programs designed to aid the MSP, there are a variety of “MSP turned educators” that have significant value to add to the MSP community. Kaseya has created a program, The Kaseya Managed Service Resource Program that provides access to respected industry experts.
These resources assist our MSP Customers in transitioning, managing and growing their business. Augmenting the product training and education provided by Kaseya, the MSRP Partners bring a wealth of added value in sales & marketing, education, best practices and industry trends. It’s a win-win situation for us all when, by pooling resources, MSPs have a happy and vibrant business.
Note: Dan Shapero is Senior Vice President, Marketing at Kaseya. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s Platinum sponsorship.
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No disrespect intended, but I disagree with Dan completely. The number one challenge facing MSPs is by far and away sales. Yes, I know, Kaseya and every other provider of products and services to MSPs can point out their example of an MSP customer of their’s that is growing like a weed, but the majority are really struggling. This will eventually be a problem for anyone basing their growth on the growth of MSPs, and will lead to major consolidation in the industry.
Mike Cooch
http://www.everonit.com
http://www.smbitpros.com
Actually, I think you’re speaking the same language. You can’t succeed with MSP sales if you don’t understand how to set/negotiate your SLAs, properly establish pricing, and effectively communicate the value of managed services to your customers. In my mind, those are all tied to successful sales activities.
Mike, I agree with you that the biggest challenge is in sales. In particular the under-selling of the services that the MSP can offer because they have done a poor job selling value against the pain point.
I see resellers that price their services the same way to a company that has a $50,000 dollar a year problem or a $2 million dollar a year problem.
The MSP’s brand is the most important brand in the eyes of the customer. They don’t care about the brand of server or firewall. However, as an industry we are doing a dis-service to ourselves and perhaps facilitating the decline of revenue that the average reseller sees from their customer by charging $40 dollars for a desktop and $200 dollars for a server.
Do IT Smarter helps VARs and MSPs develop plans that are specific to the pain points we find in the customer environment. Then with the customers help get them to validate what that means in dollars and cents. Only then, do we propose a solution.
Come on everybody, let’s raise the bar.
Sorry for the Soap Box.
That’s a good point, Joe. Those are all definitely key components of your sales message, and have to been thought through.
Mike
MSP relationship is a relationship of trust. It is very hard to relay to your potential customer that your company can be trusted. People are buying feelings. It is hard to sell something that you cannot feel until you are a few thousand dollars in the relationship.
There is another problem that we fight with. If an IT manager is not strong (and we have a lot of them in the industry) they don’t asses a potential MSP, they just hire IBM. They even have a saying for this: “Nobody was firing for hiring IBM.” If IBM (or any big vendor) fail, they say “Hey, IBM failed, then anybody else would fail. So it is not my fault.”
It is very tough to sell IT management. Truly to say we could not go outside of “in network” sale. SLAs will not help. In our business you cannot define SLAs without knowing the infrastructure. If client’s infrastructure allows 5 minutes failover redundancy then we can sign 30 min SLA. But if a client has a 24 hours hardware replacement contract and no redundancy you cannot put 1 SLA on such infrastructure.
Mike, I also agree that selling Managed Services is a difficult sell. Business owners by and large still run their business like a home rather than a true business or enterprise. As result they perform no proactive support on their systems and largely do not seem to care..until something bad happens….then it is too late.
This area really hasn’t dug into the Managed Services and is largely Break-Fix. This is something we are trying to change.
John, I think its a tough sell cause MSPs talk about technological problems and not business problems. Solving a business problem or avoiding one is what makes the MSP so valuable. I think you guys need to take cues from the insurance industry, cause thats what you are. You are technology and network insurance. You insure that they operate properly so the client can operate their business without worry. You sell business peace of mind the exact same way homeowners insurance gives us peace of mind against a tree falling onto our house.
John: I think your statement that “business owners…still run their business like a home rather than a true business or enterprise” actually represents an opportunity. Those business owners understand flat-fee cable modems and broadband.
If we can connect the dots between that model and the business value of managed services, perhaps entrepreneurs would better understand what MSPs have to offer.
Still, we have to avoid tech jargon. If you can show real business value (how much spam you block, how much uptime you guarantee, how you ensure how an entrepreneur’s mobile workforce stays connected and customer-facing rather than in the office), then biz owners will be more apt to sign on the dotted line.