I’ve been talking about the initial Managed Service offering with prospects and partners for years. During this time I have learned that there is no right or wrong way to present the concept of Managed Services to customers, although some are more effective than others.
For a Solution Provider focused on a traditional reseller business, or even a break-fix model, moving towards a recurring revenue model with a proactive instead of a reactive offering can be a daunting challenge. Most customers are used to dealing with you when they need something or if something goes wrong. And then you fix it. Now you need to get them used to a more ongoing, preventive solution.
Although there might not be a right or wrong way to present Managed Services, I’d like to share some best practices I have learned while transitioning to this new model. An effective approach is to ‘bundle’ a set of services that are automated and focused on technology.
The conversation with the customer might begin like this, “Mr. or Ms. Customer I am going to offer you a special service that includes:
- Monitoring and Alerting – This means we will be monitoring and receiving alerts on your environment 24x7x365, running system health checks, and checking for hacks.
- Asset Management – We will run a system discovery and offer you an asset inventory report.
- Maintenance – Automated checks will allow us to maintain asset health and we will provide you with server and workstation health reports.
- Security – We will run baseline automated scripting, remotely monitoring your AV and backup. This also includes MDM (Mobile Device Management) and policy management.
- Reporting – We will deliver automated monitoring on a scheduled basis.
- Quarterly Business Reviews – (This is especially important and should never be left out.) We will sit down with you once a quarter and go over a business needs assessment. We will help you set objectives and plan for the future, and specifically talk about your business improvement goals.
The initial Managed Service offering can be priced monthly, quarterly, or even annually, but what I’ve seen as a typical price point for the above bundle is about $199 per month. I’ve seen much lower prices as well as much higher, but $199 is a sort of ‘magic’ number that seems to work well.
This means not counting how many workstations, servers, etc. they have; it means including all the above mentioned services for the entire network for the low monthly cost. This should not cannibalize your existing business, it should enhance it. The idea is to get your customer started with a simple and easy to understand service that will allow you to work and grow together. Something to keep in mind is the ROI (Return on Investment) on your Initial Offering. For example, the MAXfocus Partners I work with see an average of 87% margin.
Don’t underestimate the importance of reporting. Your customers need to know what is included in their bundle/package, so reporting on a monthly basis will show them what services are being delivered, allowing you to prove the value of your offering. Ensuring the customer sees the worth on every touch point will ensure a long lasting, profitable relationship.
As a final thought, MAXfocus’s Director of Partner Community, Dave Sobel, recommends becoming a ‘Virtual CIO’ for your customers, instead of a ‘Trusted Advisor.’ This means earning your customer’s trust by clearly communicating your offer in a genuine way. In a world where social media plays a big role, your sales and marketing message must be sincere.
Finally, execute, because making good on your promises during the initial phases of a Managed Services engagement is the key to success. With Managed Services, the relationships you build with your customers are more important than ever.
