Magazine Article | June 16, 2014

Lead With BDR, Follow With Managed Services

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By Jay McCall

After winning a backup and disaster recovery (BDR) implementation, an MSP changes its hotel client’s break-fix mentality and earns a 3x upsell with monthly recurring revenue.

It’s a known fact that many small businesses take significant risks when it comes to protecting their data, rationalizing, “Everything’s working fine now; we’ll invest in backup when our equipment gets a little older or our profit margins are stronger.” This break-fix mentality is all too familiar to managed services provider Clocktower Technology Services, a service provider based in Franklin, MA, with 14 years of experience as an outsourced IT support provider to small businesses.

One of Clocktower’s newer clients, a large resort, is a good example of what it takes to change from the break-fix mindset to a business continuity mindset.

A 2-Hour Server Crash Wakeup Call
It was actually a potentially disastrous IT situation that caused the resort owner to reach out to Clocktower for help. “One of their main servers crashed and couldn’t be restarted for 2 hours,” says Bryan Sullo, vice president and cofounder of Clocktower. “Even the 2 hours of downtime the resort did experience were enough to alert it to the fact that had it been necessary to restore its data from tape, it would have been looking at days — if not weeks — of downtime.”

After their 2-hour scare, the resort managers realized just how disruptive it was when customers had to manually check in to the hotel and when its golf course, restaurant, bar, spa, and convenience stores couldn’t accept credit or debit cards. Delaying that downtime any further would have led to serious financial repercussions.

After assessing the situation, Sullo recommended the Continuum Vault, a BDR solution that includes an on-premise hardware appliance for physical and virtual machine backups, plus an off-site backup in Continuum’s cloud data center. “In the event the primary server becomes unavailable, the network can fail over to the backup appliance, and it can fill in as the server,” says Sullo. “This significantly minimizes downtime and allows users to purchase a new server at their leisure — not under duress.”

The Secrets To A Metrics-Driven Managed Services Sale
The resort managers were happy with Clocktower’s BDR proposal and willing to move forward with the purchase, but when Clocktower proposed to bundle the BDR with its managed services agreement, that’s when the objection occurred. “Even though their IT person had resigned, the resort managers admitted that they liked the idea of having someone on-site who could troubleshoot computer issues, and they felt this was a better option than paying for remote management services,” says Sullo.Subscribe to Business Solutions magazine

Familiar with this objection, Sullo showed the managers a side-by-side comparison of the two options. In the first option, he showed a yearly cost comparison between hiring an IT employee ($80,000 per year taking into consideration salary and benefits) vs. the yearly cost of the managed services program, which was $48,000. What really helped Clocktower overcome the objection was showing the key advantage that the managed services has over the other option: 24/7 support. “With our managed service, which is backed by Continuum’s help desk and NOC (network operations center) support, we can field clients’ calls any day of the week and at any time, and they don’t need to worry about coverage during vacations or sick days either,” says Sullo. “Additionally, when clients call our help desk, they don’t have to leave a message; they connect to a real person who’s based in the United States, who’s knowledgeable about IT, and can resolve 70 percent of problems on the spot without involving our company in any way. This is a huge benefit to our company because it allows us to concentrate on scheduled work rather than constantly responding to emergencies.”

After a couple of meetings with the managers, Sullo was able to convince them to give the managed services model a try, and within a few weeks they were convinced. “The biggest obstacle with selling managed services is that it’s a departure from the way people are used to doing things,” says Sullo. “After clients experience the benefits of managed services, they will never want to go back to the old way of doing things.”

“After clients experience the benefits of managed services, they will never want to go back to the old way of doing things.”

Bryan Sullo, vice president and cofounder, Clocktower Technology Services

One additional benefit Clocktower enjoys with the Continuum RMM (remote monitoring and management) tool, is that it is integrated with the help desk, and NOC support is the patch management feature. “Instead of merely passing through Microsoft’s weekly patches, which can sometimes cause more problems than they resolve, Continuum tests each patch in a variety of business environments and shares that information before we make any updates to our customers’ servers and workstations,” says Sullo. “For example, they [Continuum] may alert us that a specific patch causes problems with Windows Small Business Server [SBS]. They also perform patch tests for JavaScript, Adobe reader, and several antivirus products.”

A BDR Sale Leads To A 3x Upsell
One of the challenges some MSPs experience occurs when clients become accustomed to their networks and computers running smoothly without ever seeing an IT person on-site, and they start to question why they’re paying a monthly fee. Sullo makes sure that type of disconnect doesn’t happen with his customers.

“As a requirement to our managed services agreement, we have a monthly meeting where we review the highlights of the previous month’s events and talk about what’s coming in the future,” says Sullo. “During these meetings, we may share information such as, ‘We had 20 calls from your company this month to our service desk, and our support team handled five specific incidents.’ This is usually followed by, ‘Oh wow, we weren’t aware of any of that.’ We always want to make sure our customers know we’re working for them.” Not only does Clocktower find these monthly review meetings critical to ensuring that customers continue to see the value of the managed services program, but there’s also another important benefit. “By keeping in regular contact with our clients we can stay on top of additional business needs and challenges they face, and we can play an important role in driving those business decisions.”

When Clocktower first won the BDR project with the resort customer less than two years ago, the customer had 30 assets (computers, firewall, and servers) under management. Today, that number has grown to 70. “Since first engaging with the client and landing the BDR sale, we’ve tripled our monthly revenue with them,” says Sullo. “With the growth they’ve experienced, they would now require two full-time IT employees on staff, but we’re able to provide them with better uptime and 24/7 support at a cost that’s 60 percent lower than hiring two full-time employees.”