Be Picky About Your Customers
By The Business Solutions Network
As break-fix solutions providers transition to managed services, something they need to come to grips with is the concept that not every customers is worth having as a customer. Business Solutions’ March issue included a feature story on Acumen IT titled “The 4 "Nos" That Lead To More Profitable Managed Services ‘Yeses’.” David Helm, Acumen’s CEO, said his #1 piece of advice was “Say No to Accepting Just Any Client.”
Helm shared what a lot of experienced MSPs know: you sometimes need to walk away from potential business. If your potential customer doesn't see IT as an asset, and isn't willing to invest, every interaction with you will be begrudging and they’ll most likely have old junky systems that will require a lot of time and energy to deal with. In this situation, the proactive monitoring benefit of the MSP model can’t be realized because everything’s falling apart. MSPs really need to identify with each client as to whether there are potential headaches that can eat into their profit and then decide if it’s worth it.
The other day I participated in a webinar concerning our 2015 Channel Transitions events. On the call was one of our keynote speakers, Karl Palachuk, owner of Small Biz Thoughts and an author, speaker, and IT consultant with tons of experience. On the call, the topic of walking away from bad customers came up. “Many service providers haven’t spent time thinking about what’s the right thing to do in the big picture,” said Palachuk. “It’s not in your best interest to build your business around customers who don’t invest in IT, who question everything you do, second guess you on equipment, want to only buy cheap stuff, and not upgrade their systems.” Rather, Palachuk says MSPs should seek clients who want to invest in their IT, take technology seriously, and are technology dependent because they recognize that, with your help, technology can separate them from their competition. He went on to tell webinar listeners that those types of customers do exist. “Build a business on them, instead of people who only want to pay you $30 a month and never upgrade,” he said. “Doing so is in the interest of your business and family. Walk away from picking up nickels instead of dollars.” While we were talking about bringing on new clients, this same logic applies to existing ones. Take a close look at your profitability with each of your existing clients. If some are out of wack, it's time to raise your price to them or fire them outright as a customer.
We’ll be covering delicate but important issues like this at our three Channel Transitions conferences (June 4 in Newark, September 24 in Chicago, or November 5 in Orlando) in 2015. Join us to learn more about funding, marketing, pricing, bundling, hiring, and partnering as you make the shift to recurring revenue. If you are an active VAR/MSP/ISV, I’ve currently got the ability to waive your registration for the conferences. Go to www.ChannelTransitions.com today and use coupon code BLUES. Free offer does not apply to vendors.