Creating Your Transformation To Managed Services

ENX FEB 2016 Issue Final HiResThere are primary and fundamental steps to consider when pointing your business to managed services. Business owners are often the go-getters from days gone by and can be in the habit of turning their ship in a snap. Jumping ahead of competitors can be a great advantage if done correctly. However, if the statement, “Let’s do it!” describes your entire planning process for including managed services in your business (as it does with many), it’s not hard to see why one might fail to launch the program.

Managed service programs are a great addition to your offerings if done right. They do require different strategies and execution plans in order to project their values properly to those who buy them. Here are a few of the primary considerations you should consider when creating your transformation plan.

1. Your First Move

The very first thing you can do to successfully launch managed services is to make sure your core business is rock solid. This isn’t to say that it has to be perfect, but it has to provide the financial stability necessary to carry you through the learning curve of managed services. If your company doesn’t deliver consistent sales results, then you may want to improve your sales results before stacking more on top.

Managed services can be an excellent source of additional revenue, but not if it injures your existing business and or your company’s reputation.

2. Telling the World

Many dealers include managed service deliverables on their website, but most hide them behind the view of their copiers. That’s absolutely OK if you’re not in the transition mode, but if you are, you need to reorganize your thoughts. Few truly understand how to position or prioritize their website’s presentation. This typically exposes a weak or missing go-to-market strategy and is most likely applying a menu approach hoping that if you land on their site, you’ll take the time to click through their menu. I’ve seen as high as a 70 percent bounce rate on a home page. If you don’t make them feel it, they simply leave your site.

Your website should be an exact presentation of your go-to-market plan. Navigation drives more detail and secondary products or services, but your home page should speak to your primary target, showing your top competencies and supporting images.

3. Planning

You can’t drive a successful transformation with wishy-washy effort. Sit down with your management team and create how to blend these services into your business. Managed services require a different go-to-market strategy. Your focus isn’t just hardware profit and teaching clients how to push a print button anymore; it’s getting paid well for managing a segment of someone’s business to a better cost or performance position.

Identify the client profile that best fits your services and design your entire approach with them in mind. Remember you will go through a learning curve so walk through every step to find the holes in advance.

Most importantly understand YOU DON’T HAVE TO BUILD EVERYTHING YOURSELF! Use those companies that can deliver the backend, while you focus on sales and penetrating your marketplace. Penny pinching here can bog down your organization and unnecessary backend burden that stresses your company’s bandwidth is something you don’t need. Set milestones and define what success looks like. Realizing that 10 managed service deals of the right size can exponentially grow your company’s revenues.

4. Igniting Your Sales Team

Managed services are mostly a strategic value and thus a C-level deliverable. It’s not easy to get to the C-level, especially if your company is just beginning with managed services, so you have to find sales talent who are capable.

Sales reps that sell managed services are receiving nice compensation plans that include a base, commission and even residual income. That’s how you attract them. It’s important that you align your compensation to pay for the activity and results that make your company successful. Don’t try to tweak a hardware profit comp plan for managed services and don’t be stingy!

Also, if you haven’t figured out costs and profit margins, you surely can’t create a proper sales commission and comp plan, so build a financial model.

5. Business Development

Sales cycles are different with managed services. I recommend that you transform your sales team model to drive 100 percent managed service to all new business first appointments and build an account management team to manage the hardware customers. If you use hardware reps to try and sell managed services, most fail typically because their 30-day hardware quota pulls them away from the longer sales cycle. So build it to succeed.

This is so very important: I either find brilliant storytellers who aren’t interested (at all) in prospecting or someone who can set appointments but isn’t capable of delivering a great first appointment presentation. Use their capabilities to your advantage and build a team that delivers sustainable opportunity, because you simply don’t find both skillsets in the same person very often.

Many believe that getting C-level appointments is impossible. It’s not! It is more difficult to do if you’ve put all of your sales payroll dollars into outside hardware sales reps that most likely will be gone in 6 months. Take that same money and build an inside appointment generation team with at least 3 appointment setters and set appointments for your storyteller. Accelerate your business development towards C-level targets. There can be a lag in the beginning, so build your team and comp plan to endure this process.

By shifting dollars from failing outside reps to this appointment setting team model, you stay inside your current budget and accelerate your pipeline development. The 3 to 1 ratio keeps your storyteller busy with appointments and maintains a high energy and interest level while they learn the managed service sales cycle process.

If they’re sent on 5 to 8 first appointments a week, you will grow your business exponentially.

6. Automation

I will never forget when we first started selling and implementing MPS; everything was completely manual. Shipping, setups, installs, billing, demos, scheduling, meter reads, service dispatch and supply replenishment was all done on the fly. It was so easy to lose your shirt, and who knew how much supply inventory was out at the customer’s location? What a nightmare. Today, everything is automated and being profitable can be as simple as engaging only prospects that have an environment that proves out your financial model and outsourcing the logistics to an expert.

In MPS, you should outsource your service and supply logistics to a company that most aligns with your business and performance requirements. The same goes for I.T. services and remote monitoring. Do you realize that just like your clients, you can benefit greatly by outsourcing the managed services backend?

If you don’t outsource in the beginning, think of the massive amount of new processes you have to manage and hire for. Think about it, you jump into the managed I.T. services for example and take to market remote monitoring and other like services. You want to build it yourself, internally (as many do). You’ll tell your customers that your solution is safe, secure, and redundant and they’ll never go down. Right? The only thing is you have to hire at least two (significant payroll uptick) network guys to keep your promise. This talent doesn’t come cheap and these aren’t shade tree copier techs that like to dabble. These are very smart geekified brainiacs that are properly trained and educated and will be necessary from your first client on.

Once they’re onboard, you’re under the gun to find enough network business to break even. Why create that pressure? Buy the services you want first and then, when the timing is right, bring it in-house if that’s what you want. Why sell outsource services if you don’t believe in it yourself.

7. Accountability and persistence.

Every time I bring up the word accountability, most business owners jump on their bandwagon and start preaching to the sales manager about how to get more out of the reps. That’s not what I’m talking about here. In most dealerships, the hardest working person in the building is typically the owner, and if the owner is in a glide path, so is everyone else. I don’t mean that you can’t find earnest, hardworking employees in the company; I do mean that the dealer sets up the cadence and momentum, and everything moves as fast or as slow as they do.

Transitioning is very hard work and when your sales team hits that massive learning curve wall (and they will), you owe it to them not to buckle, but to lead them through to success. Be persistent and hold everyone accountable for his or her part of the plan. I see many companies bail immediately when sales people start complaining about how hard prospecting to C-levels is. Don’t fall for it; lead them through it.

8. Determination

If you’re financially sound and you’ve sat down with your team to design your plan, defined success, and picked your partners and built the sales process that gets it done, be determined that nothing will stop you. Focus on those 10 accounts that are out there somewhere and start building your future. Do you feel that old feeling?

Who knows where determination comes from? It’s clear that many people don’t have what it takes to drive a company to success, much less to lead that company through the challenges that today’s competition and economic times bring.

If you’re on top of such a company and you’ve lived through a season or two, stand tall, you’re absolutely one of the few! Transforming your business isn’t impossible and I would say, today, it’s absolutely necessary for your company’s future. It’s your determination that’s going to get it done, and everyone will lean on you to make it happen. You can do it!

Charles Lamb
About the Author
Charles Lamb is the President and CEO of Mps&it Sales Consulting. His firm delivers proven methodologies and processes that assist dealer principals seeking the shortest path to a successful transformation into the managed services space. He's created complementary solutions including Funnelmaker, Gatekeeper, and Shield IT services. His bootcamps demonstrate immediate results in raising the skill set of those wanting a foundation for selling managed service deliverables. For information on bootcamps, training, or consulting engagements call 888.823.0006, e-mail him at clamb@mpsandit.com, or visit www.mpsandit.com.