Managed service providers as an industry are losing its blur. Even people outside its influence are reaching the point where the concept is understandable. What’s helping is an overall standardization.
The thing about selling technology is that people buy it from you and they go away and use it. You hear from them if the technology fails to live up to your promise, or if the technology malfunctions. Selling managed services is a whole different animal.
You’re not selling technology, and they’re not buying it. Instead, they’re investing in the operation of that technology. You’re not selling a physical solution. You’re leasing peace of mind. Consequently, there’s a big, uncomfortable assumption of risk – a leap of faith. What seals the deal is your ability to remove the risk. To do that, you can’t just find tech solutions for them, you have to do a much deeper dive. You’ve got to understand their business. It’s this theme that runs through the current customer service trends affecting MSPs.
- Personnel realignment
MSPs used to mirror traditional technology companies by beefing up on general sales teams – because yes, selling is a numbers game. These sales representatives became adept at selling solutions and technology. However, their depth of relationships with customers tended to be shallow. A sales rep could tell you all about how the solutions they sell will solve customer problems, but they weren’t able to provide insight on the challenges and strategic objectives driving the company.
It was an acceptable approach when the solution was technology, but it simply doesn’t work when the solution is transformed to the operation of the technology. Representing the product is an incomplete role. Sales representatives must engage at a much deeper level. They must understand the business and how it runs. In other words, sales organizations no longer have the luxury of saying, “I just sell. I don’t support.” It’s because they are selling support.
As a result, many MSP sales groups are renaming themselves. Sales representatives are being reinvented as customer success representatives. They’re being installed as dedicated advisors and advocates. A sale is only the start. An organizations operational improvement is the metric to measure, rather than installations and upsells. The revenue that matters in this new paradigm comes from renewals and upsells.
This is by far the biggest and most impactful trend for MSPs as they close out the first half of 2018.
- Backing away from the XaaS trap
“Sure, we can do that for you.” It seems at first to be a logical approach. You’re an MSP. Companies come to you looking for solutions that you can run on their behalf so they can focus on core competencies. And, because you can add these managed services virtually, operating them from the cloud, why not offer anything as a service (XaaS)?
The bump in the road is that most customers don’t know what can and cannot fit into a managed services portfolio. For this reason, we’re seeing a growing movement toward standardization of managed services. MSPs are creating and marketing a set of standard managed services that recognized across industries as the optimal collection that can help organizations achieve operational traction.
It doesn’t mean the end of XaaS. Defining managed services as a standard portfolio can allow you to make XaaS an actual catalog offering instead of a wildcard.
- Delivery upgrade
“But, every customer is different!”
Yes, that’s the challenge. But MSPs realize they must create standard, scalable, and repeatable processes to grow revenue and profitability. After all, the customer expectation is the delivery of operation – not just a drop-off. This is a logical shift in approach.
Managed services started as a model where the product was custom and its delivered by a series of on-site visits, where MSPs interacted with various levels of staff for training and education. In many cases, this remains the model.
However, MSPs are realizing an increase in revenue when they implement solutions that encourage remote delivery and decrease the time it takes to onboard clients. The time between purchase and implementation carries the risk of cancellation, and the risk increases the longer the customer must wait. This wait time also creates first impressions.
An overall maturation of major players in the MSP industry has helped to deliver commercial off-the-shelf tools that can be integrated. This is removed the need for individual MSPs to develop their own service management tools.
There’s a secondary benefit to using these commercial off-the-shelf tools. As they become more well known, the brand names become selling opportunities for MSPs who can promote their use of these recognizable names.
Spinning faster, truer
MSPs are creating recognizable approaches to working with customers, and they are offering standard packages that can be delivered and maintained with less physical implementation time. This is so they can spend more time developing the value proposition that will move the profit needle: ensuring the operation of services they manage.
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Topics: managed service providers
