From The Editor | September 16, 2013

3 Tips Every Managed Services Provider Should Know

By Jay McCall

BSM-Mo Money

If you’re a reseller new to the managed services model or an established MSP (managed services provider) looking to hit the next level of your business, Thomas Clancy Jr., partner and manager of sales and operations for Valiant Technology, says a simple formula has been instrumental to Valiant’s success as an MSP. His lessons are to the point, actionable, and very relevant.

1. More frequent rate increases.
One bad habit an MSP can get into is only reviewing its customers’ rates quarterly. What inevitably happens is that customers add new services, but doesn’t start paying for those services until as much as three months later. Not only does this oversight lead to a significant amount of lost revenue, it actually creates unnecessary objections that could have otherwise been avoided. “When customers add multiple new services over several months and then get hit with a big fee increase all at once, it’s much more likely to cause them to balk at the price increase and want to negotiate a lower price,” says Clancy. “It’s much better to apply the frog-and kettle analogy of slowly raising the temperature, which leads to far fewer price objections.”

2. Keep executives out of the trenches.
One of the most difficult lessons small businesses eventually have to face is the balance of working on the business versus in the business. Through the help of its sales coach, Clancy and the other Valiant business owners realized that each one of them was spending too much time troubleshooting customer problems. “It’s a common temptation for IT-savvy business owners to ignore their responsibilities as executives by working alongside their technicians and helping out with some of the day-to-day customer service tasks,” says Clancy. “Even though it may look like you’re being humble and a good team player on the surface, it can hinder the company’s growth if left unchecked.”

3. Reduce ticket backlog times.
MSPs do a good job of keeping their customers’ computers and servers running smoothly, but when it comes to managing the important details pertaining to their own businesses, it can be a whole other matter. “It’s easy to fall into the rut of just looking at the day-to-day tasks and failing to look at the bigger picture,” says Clancy. “Through our personal sales coach and other training, we realized that instead of focusing only on our daily tickets, we needed to also be looking at the previous 12 months’ worth of tickets to spot any trends.”

Within a few weeks of looking at the ticket reports, Valiant noticed a disturbing trend: its service resolution times were getting steadily longer, and the number of backlogged tickets was growing. After interviewing its service technicians and asking for candid feedback, the MSP discovered its engineers had gotten into the habit of hoarding tickets. “This happens when an engineer takes a help desk call and places the ticket in his own personal queue within our Autotask PSA [professional services automation] systems,” says Clancy. “Then, when that same customer calls back — either with another problem or to follow up on the original problem — another engineer may answer the call, but won’t actually resolve the problem because it’s now assigned to someone else. Instead, the second engineer ends up taking notes for the first engineer to follow up, which results in extra steps to resolve tasks and longer resolution times.” By addressing this bad habit with its engineers, Valiant was able to correct the problem and in less than six months reduced its monthly ticket backlog from 250+ to less than 100.

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