5 Mistakes Made on the Road to Becoming a Managed Service Provider
- Avalara News
- March 3, 2016
Transitioning your business from break/fix to managed services can be a bumpy road.
The benefits for your business are clear: bundling your offerings provides more efficient support for your clients and also allows your sales staff the opportunity to become experts at selling managed services. And then there’s the financial security of monthly recurring revenue.
Still, change is hard. You’ll not only have to re-educate your staff, but your clients as well. Adjusting your pricing, adding new tracking and automation tools, redefining what and how you sell—the list is rather extensive.
While it may be tempting to rush toward these end goals, transitioning your business is a marathon that includes a lot of obstacles. But with preparedness and pacing, it’ll be well worth the effort.
5 Potholes on the Road to Transformation
When you’re ready to begin the process of transforming your business, keep these 5 pitfalls in mind and you’ll be on to bigger and better things before you know it.
1. Moving too Fast
As tempting as the end goals may be, rushing this process benefits no one. Transitioning your business over a 2 to 5 year time frame will ensure you establish and execute new processes with clarity and accuracy. Your staff and clients will appreciate you for this. Make changes in stages, and plan accordingly.
FACT: This isn’t just a change for your business procedures. It’s also a change to your company culture. Be sure to keep the communication lines open to your staff, so that the end goals are always in sight no matter where you are on the roadmap to change.
2. Overwhelming Your Clients with Options
Offering a book of selections in anticipation of your clients’ needs is not the most efficient operating practice. When there are too many choices, the selection process becomes daunting for your clients. It’s also frustrating and exhausting for your sales staff.
Streamline your offerings into thoughtful service bundles, and make it easier on everyone.
FACT: Psychological studies have shown that people are prone to feeling overwhelmed when there are more than 3 options present. You’re doing your clients, and staff, a big favor by reducing the number of service options to 3 simple choices.
3. Duplication of Effort
Success is in the details. Put the right automation tools to work for you so no one is left with the task of trying to figure out how much time was spent doing what.
Remote monitoring and management (RMM) and professional service automation (PSA) tools enhance your operation by increasing your ability to do more with what you already have.
With the power of remote access, and the ability to immediately capture billable time, the accuracy of your records will increase, and your business processes will transform for the better.
FACT: RMM and PSA tools could potentially be the largest investment your business makes, but they are invaluable components when it comes to accurately and efficiently managing monthly recurring revenue.
4. Selling Yourself Short – Literally
It’s important to build price changes into your plans. Carefully consider all of your services. Now factor in your employees, automation tools, and operating expenses. Don’t pull a number that ‘sounds good’ out of thin air and expect things to go well. They most likely won’t.
FACT: Researching your competitors and their pricing options is a great way to gain insight on the topic. And don’t be afraid to ask your clients for their thoughts on your value proposition. Their input offers valuable perspective you can’t get from anyone else.
5. Putting Unrealistic Expectations on Your Clients
Simply hoping your clients will fall in line with your new processes (and price changes) would not be the wisest course of action. Expect to re-educate your existing client base on the business benefits of managed services.
FACT: You can never be too prepared. Employ emails, phone calls, meetings, and presentations to inform your clients about the benefits of your managed service options.
Designing a communications plan using all of these outreach methods will not only demonstrate your commitment to their success, but also solidifies the efficiency of the processes you’ve spent years putting into play.
The process won’t be easy, but it will be worth it. Take your time. Condense your service selections. Implement RMM and PSA tools. Adjust your pricing. Educate your clients. You’ll be reaping the rewards of a well-executed plan before you know it.
Looking for more tips for transitioning your business to managed service? Explore more helpful tactics to make the move seamless.