4 Tips For (Successfully) Selling Managed Services
TruMethods President Gary Pica spent 12 years building a top MSP. Here are his four tips on establishing a thriving, profitable and successful managed services practice.
By Gary Pica February 26, 2014, 10:51 AM EST
Every IT professional knows that the managed services business model is superior to the break-fix model. You don’t need me to tell you that a proactive, preventative approach to IT service is more efficient than running around putting out fires. It leads to higher margins, scalability and recurring revenue while improving customer service. However, convincing your customers is a different story. Generally, they are happy with the service you provide at the prices you charge. They simply don’t know any better. Preventative care seems good on paper, but convincing customers to embrace the managed services delivery model is a challenge for even the best salesman. Here are four important things you need to consider.
1. Don’t sell technology: Typically, customers don’t care as much about individual features such as patch management, anti-spyware, anti-spam, backup, endpoint security, monitoring, cloud computing or Software-as-a-Service (SaaS) as we do. What they care about is how IT systems management impacts user productivity, decreases risk and keeps costs under control. To effectively sell the idea of managed services to your customers, it is important to focus on the end result of your support offering rather than the bits and bytes of how you deliver it. Show them that being proactive and using automation to deliver a higher level of performance, functionality and stability is cost-effective. Their biggest expense is human resources. If you can explain how your technology solution translates into better utilization and productivity of their employees, you can show them in tangible benefits why managed services are so critical.
2. Sell “your company way”: If a customer told you that they wanted the best possible IT support available and that money was no object, what would you do? What people, process and technology would you deploy to achieve the best possible results? The answer to this question should be the basis for your managed services support offering. You support offering should deliver ’your company way.” This is the unique approach and perspective you have developed based on your years of experience. Build a process that delivers “your company way” to every client. That is your unique selling proposition.
3. Raise your price: You can’t deliver quality support by pricing your managed services offering too low. You are not saving your customers any money by charging them less and then delivering a watered-down product. If you truly believe that your approach to managed services is the best investment for your customers, then you should deliver a complete solution and charge accordingly. In fact, why would you even offer a lower-cost, lower-quality solution at all? Your customers are not qualified to tell you how you should deliver quality support. It is your job to tell them what technology support looks like, what it should cost and how the investment pays for itself.
4. Sales focus: I speak in front of IT providers at many live events each year. I always poll the audience to see how many people have a goal of increasing their managed services revenue. More than 90 percent of the hands in the audience go up. Then I ask how many people have a dedicated resource focused only on adding new managed services agreements. Very few hands are raised. Think of other areas of your business that you improved — did any of them improve without focused resources? This dawned on me one day after I had announced to my employees that building our managed services practice was our most important initiative. I was sitting on the phone getting a price for a firewall project and I asked myself what I was doing. How were we going to reach our goals if I was not focused on our top priority? Managed services agreements are not something you add as just another thing you offer next to servers, firewalls, PCs and block time agreements. If you want to be a successful MSP, you need to dedicate resources focused only on increasing managed services revenue.
The managed services opportunity for IT providers remains strong. Start by making a firm commitment to the managed services delivery model and building a consistent and robust product. Seek out like-minded partners who can help you achieve your goals. The IT solution provider landscape continues to evolve with the influence of SaaS and cloud services, but the principles for success remain the same. Now is the time to establish your new value proposition.
Gary Pica is the president of TruMethods, a coaching and mentoring company helping IT providers and MSPs grow sales and profitability. Pica is a featured speaker at the XChange Solution Provider 2014 conference, running March 2 through March 4 in Los Angeles. For more information on Gary Pica and TruMethods, visit www.trumethods.com
PUBLISHED FEB. 26, 2014
How Much Your Premises-Based Phone System Really Costs
Business Phone Service by Tom Collins
Even though cloud communication tools are everywhere, some organizations are still clinging to premises-based phone systems for a variety of reasons. Perhaps your organization hasn’t made the switch to Unified Communications as a Service (UCaaS) yet, either.
Reasons not to adopt modern technology vary, and some make more sense than others. Some of the most common include:
Trying to realize returns on the high, upfront investment of on-premises phones
Employees are used to the on-premises phones and find adopting new technology difficult
Insufficient bandwidth due to low quality Internet connectivity or a lack of access to fiber-optic Internet connectivity options
While organizations may feel the need to “pay off” their five-year-old TDM Private Branch Exchange before they adopt voice-over-IP (VoIP), the decision not to switch can often end up costing more than the switch itself.
Are Premises-Based Phone Systems Too Expensive?
For some organizations, there’s a massive opportunity cost associated with clinging to premises-based phone systems.
How much benefit are you unable to gain if your organization really needs cloud-based Unified Communication tools?
Is the higher monthly cost of your on-premises phone system worth the price you’re saving on not having to train your employees on new handsets?
Cloud-based communication tools aren’t for everyone; that’s true.
There are some businesses that should stay on-premises. But, if your organization needs to adopt modern technology, the decision to delay adoption could actually be hurting your business, making you less competitve in the marketplace.
Read on to learn whether your organization’s needs are being served by on-premises phone systems, or whether you’re being held back by your approach to business communications.
Realizing a 75% Savings By Ditching a Premises-Based Avaya TDM PBX
Gene Marks owns a small technology consulting firm with ten employees. Back in 2004, his organization paid $1,000 per month to lease an on-premises phone system from now-bankrupt Avaya. The cost of their TDM Private Branch Exchange (PBX) was half as much as their $2,000 monthly bill for office rent!
“I started to wonder why,” Marks wrote in Forbes.
Why was Marks spending half of his rent bill on phones that offered minimal features and didn’t serve his business, especially since his tech-savvy staff wanted to be able to work from home?
Mark’s company made the switch to VoIP phones delivered as cloud communication tools, which represented a 75 percent monthly cost savings for his organization at the time of the change. Marks loves his new hardware-free phone system and admits he’s never going back to the costlier on-premises solution he used before.
What Are You Getting vs. Paying For?
Even when you’re not taking business opportunity and collaboration benefits into account, you may be paying more than you think for your on-premises phone system due to the following factors:
Confusing monthly billing statements, causing your organization to pay for features and lines you don’t need.
Time-consuming, costly monthly maintenance and routine system updates to your on-premises PBX
Uncertainty around future system support due to phone provider bankruptcy
Requirement for on-site fixes, sometimes requiring technician visits
Do You Need More Features and Functionality?
On-premises phone systems are exactly what they sound like–tools for making and receiving voice calls. Making the switch to a cloud-based phone system can allow your organization to unlock Unified Communications as a Service, a single-platform approach to integrating multi-channel communication tools into a single platform.
Leading UCaaS platforms like Broadsoft’s UC-One offer a wide array of features including:
Integrated phone service
Audio and Video Conferencing
Virtual meeting rooms
There’s also extensive functionality and extensibility with UCaaS. Organizations gain the ability to integrate their UC platform with their document management software like Office 365 and CRM like Salesforce. Team members gain access to easy document sharing via rich, easy-to-use keyword search available on desktop or mobile.
Your on-premises phones may enable your employees to make calls. But are they supporting cross-channel communications, transparency, and easy access to information?
To learn more, check out 11 Valuable Business Benefits of Unified Communications as a Service.
Do You Need to Scale?
On-premises TDM phone systems aren’t very scalable since they’re based on physical equipment. It can be costly to order new line cards for premises-based PBX, and organizations may need to purchase a card that supports 23 new lines when they only need to add one.
Circuit installs are also a major financial commitment, and may require 30-45 days to wait for the right approvals and technician availability. In contrast, adding phone lines to a cloud-based phone system just requires a few clicks in the administrative portal and connecting a handset to your business data connection.
On-premises phone systems are also not scalable across multiple locations.
Multi-location businesses are forced to maintain separate phone systems for each branch, which can create confusion for employees who are collaborating across sites. In contrast, UCaaS allows organizations to unify their communication tools into a single system, regardless of how many global locations they have.
From Legacy PBX to UCaaS
Is an On-Premises Phone System Right for Me?
Does your business just need the basic ring and answer functionality, and maybe very occasional voicemails?
Is there little reason to anticipate your communication needs evolving significantly in the months or years to come?
For some smaller companies with a single location, paying off a previous investment in an on-premises phone system can make sense.
Businesses that fit this model could have some of the following characteristics:
One location (versus multi-location)
No remote employees
Minimal need for mobility
Minimal growth goals or staffing fluctuations
Primarily in-person/walk-in business and communication needs
Don’t offer technology-based product or services
Cloud-based phones aren’t the right choice for everyone. While there are always disaster recovery disadvantages to on-premises phones compared to UCaaS, some organizations don’t need the functionality and features of cloud communication tools.
The key takeaway? On-premises solutions tend to be very static.
If your business’s need for communication tools and phone lines are almost definitely not going to change for the lifetime of your on-premises phone system, you may have a business case to stay with what you have.
Is a Cloud-Based Phone System Right For Me?
Is the cost of remaining with on-premises phones higher than making the switch to cloud-based solutions?
Many organizations find the opportunities for process improvement and transparency associated with Unified Communication tools beat out their reasons to stay premise-based. If you’re still not sure whether you’re a better candidate for cloud phone service or an on-premises deployment, consider how your organization stacks up against the following questions:
Do I need features that support employee productivity, mobility, and collaboration?
Is there a need or desire to integrate our phones with email, instant messaging, and software applications?
Does your organization require multi-site communication tools or flexibility for remote workers?
Is there reason to believe you’ll need to add phone lines or scale service down over the lifetime of your premise-based phone system?
Does your organization stand to lose out on revenue or damage customer relationships if your on-premises phone system suffers extended downtime?
Are your monthly billing statements confusing or hard-to-decipher?
Do you need simpler maintenance and management of your communication tools?
Are you hoping to deliver an improved customer experience, including seamless multi-channel communications?
Ditch Your On-Premises Phones: When Change is the Best Choice
Change is never easy. But, when you’re forced to pick between a clunky on-premises phone system that’s difficult to scale and doesn’t offer the features you need, it’s important to understand what you could be missing out on.
Your legacy PBX may have several years left before the equipment fully depreciates (at least, according to your accountant), but what’s the opportunity cost of a communication platform that doesn’t help your employees collaborate and access the information they need from any device?
If you’re not sure whether your organization is best served by on-premises or cloud-based phones or where a UCaaS switch fits into your technology roadmap, ask an expert. Atlantech’s expert representatives can provide unbiased insight into how much you could save (and the benefits you can gain) by switching to UCaaS. Click here to start a conversation today.
THE ESSENTIAL GUIDE TO BUSINESS PHONE SYSTEM PRICING
Get all the information you need to make the smartest decision for your business’ phone system.
Ask your CIO how often you use the IT capacity you own. If your systems are premise based then you need high capacity at certain times. BUT you pay for it when you don’t need it. Ask u show 3 of top CPA firms in the NJ metro area are using scalability to reduce IT overhead. 877 208 0021 or go to acginfo.biz