VARs beginning to offer managed services can hear objections from their break-fix customers about the idea of a monthly bill. At Business Solutions magazine’s Channel Transitions Conference October 7 in Philadelphia, members of the VAR/MSP panels weighed in on how to respond to, “Why do I have to pay more?”
Steve Rutkovitz, CEO of Choice Technologies, is a former break-fix VAR who now provides managed services. He commented that VARs who have provided good break-fix services could have a more difficult time explaining monthly fees. His advice is to begin providing managed services to new customers, and once you — and your sales and technology staff — establish your new business model, approach your break-fix customers about what you have been providing as an MSP.
Jay Steinmetz, CEO of Barcoding Inc. that provides data collection, RFID, and Software as-a-Service, says he encounters objections from customers about not owning hardware. Steinmetz advises MSPs to remind customers that when they stop using a device, they no longer need it. Essentially, not owning the hardware is a nonissue. Hunter Allen, CEO and president of Cervion Systems, providing Retail-as-a-Service, said it’s also difficult for his customers to be accustomed to never owning the hardware, “but we explain how it’s a benefit to them.” Steinmetz added it is beneficial to point out that businesses pay service fees for most hardware and devices they use. In some cases, successfully selling as-a-Service is as simple as “changing your nomenclature with customers.”
Bruce Nelson, president of Vertical Solutions, says to focus the discussion with the customer on their desired outcome of being up and running with no issues. He said to point out that, as a break-fix VAR, “you hope it breaks.” In a managed services model, “you don’t want it to break and do everything to keep your customers on this model up and running.”
Todd Schorle, president of TS TECH, is also a former break-fix VAR who is now a proactive MSP and an expert at establishing IT and MSP processes. He pointed out there are people who want to stay break-fix customers, but “it doesn’t’ mean it’s the best thing for them.” Schorle says the way to overcome objection is with education — explaining risk and the value of the service you provide. Dale Walls owner and president of Corsica Technologies, agreed, stressing the importance of helping your customer understand the value of what you are delivering.
Brian Doyle, VP of IT and Data Center Services for PCNet, said, “If the argument is price versus value, then we haven’t done our job. Get to pain points — understand what’s driving your customer. Take care of their problem at a fair price point, and move on from there.”
Channel Transitions is sponsored by: AVG Managed Workplace, Mercury, OKI Data Americas, GFI MAX, ModernOffice Suite, and Harbortouch with industry association partners The ASCII Group, CompTIA, and the Retail Solutions Providers Association (RSPA).