Chapter One: Why You Should Probably Consider Switching from Break-Fix to MSP
It’s been quite the wild ride we have had here through our series on transitioning from IT Break-Fix to MSP. If you are new, this is chapter four. To visit the early beginnings of this series, here is Chapter One: Why You Should Probably Consider Switching from IT Break-Fix to MSP.
The rest of us will carry on.
In this article, we will investigate what this transition will look like, your biggest hurdles and how to make it happen.
Don’t Kill the Messenger
First things first, you need to figure out how you’re going to contact these big sacks of money, I mean clients. You have only a few options here.
Snailmail, face to face, phone call and email.
Snailmail is a typically a bad approach. It’s costly, slow, you can’t see if they read it and you can’t interact with them after they see it.
Face-to-face has its benefits. You can see their reaction and readily have all available collateral with you to sell them on the value prop.. That’s good for you, but they won’t want to be put on the spot. Face to face can be tactful, just no surprises.
A phone call is a great way to launch into discussion and is more time efficient than face to face.. However, people are visual interpreters generally and they’ll also want to see the numbers, sit, think and not be put on the spot.
An email delivers is a way to visually present all of the information you need to share. You can attach collateral to the message, you can write like Hemingway and it’s free. Using BananaTags you can see if they’ve read it and it gives them the space to think up a genuine reaction without being put on the spot. However, it is pretty impersonal.
So what to do?
There’s a book out there called Managed Services in a Month - Build a Successful It Service Business in 30 Days by our buddy Karl Palachuk. We dug through it a bit and here’s the recommendation. It’s a bit of a mash-up.
Karl recommends that your first step should be trying to schedule a face-to-face meeting to present your new pricing model. Make at least 3 attempts to get a meeting scheduled. If still no luck after that, then send the email.
What to Say
If you’ve read the previous articles in the series, you know that making the transition to MSP is clearly in the best interest of both you and your clients... if you haven’t read the articles, now you know.
Still, many of your break-fix clients may be reluctant to move to a monthly fee with constant, proactive support. Your challenge—and responsibility—is to show this client why managed services is the most efficient and effective way to maintain their network.
Whatever mode of communication you have chosen to reach out, these are some talking points we recommend.
ONE: AIM TO EDUCATE
Educate them on the problems with the break-fix business model and how its structure literally incentivizes you to do bad work. Not that you do, but that’s how the reward system works.
For example; they’ll no longer be responsible for detecting their own issues. They’ll have full confidence all of their information is safe. Any technology problem or question is answered within moments. Setting up new technology or softwares can be done in a single phone call. Remind them in an MSP contract there is a guarantee in writing to reassure customers that there will always be someone on your team ready to assist them.
TWO: EMPHASIZE SAFETY A LOT
There is a psychological phenomenon called “loss aversion.” Loss aversion means we are way more willing to miss out on making $100 than we are willing to lose $100. In other words, people will fight to the death to save $100 but will shrug off making $100.
This means you’ll want to approach your initial pitch with a major emphasis of what could be lost without the right preventative actions taking. Emphasize the loss of data, the loss the a machine, lost files, relationships. Brand yourself as the guy who prevents loss.
THREE: TRANSITION CLIENTS SLOWLY
If they hesitate, try easing clients into it. Jordi Tejero, owner of CRS Tech Consultants, suggests offering a 90-day trial period for managed services to current break-fix customers. “Prove to them that it works and they tend to buy-in,” he said.
Another approach is to use the psychological trick of foot in the door, where you incrementally get them on-board. In other words, see if you can sign them up for a single service like anti-virus. Let them understand what the on-going relationship feels like, then upsell.
FOUR: RAISE YOUR PRICES ON BREAK-FIX SERVICES
You have to 100% commit to the MSP life, let them know after a specific date you will be raising your ticker. Three IT experts we spoke to agree with this, they said what almost every IT shop does wrong is a lack of focus. If you fail to commit to MSP and continue holding onto this little limb of a business, you’ll be clearly communicating that you are not confident in your new business model.
FIVE: DON’T LOCK CLIENTS INTO FIXED-TERM CONTRACTS
Don’t make this bad business move. If you are an IT/MSP shop, you are probably locked into some service/software contracts. Those things suck. Don’t be the evil.
Long contracts will also reduce how many people adopt your new service. Not many people want to commit to something long-term they know nothing about. Give them freedom and have confidence in your service. IT shops take pride in this, so I am confident you’ll do great, you anonymous reader you.
You’re Gonna Have Some Hurdles
We are gonna give it to you cold here. When you reach out to previous break-fix customers and say you are moving to MSP, they are probably not going to be happy.
In fact, they won’t want to switch at all. In their eyes, you’ve just become the Wicked Witch of the West. But don’t you worry Dorothy, we’ll get you your ruby red paychecks.
Going into this transition, your only major hurdle will be that people just simply won’t want to switch. At face-value, they’ll probably spend more money overtime and bottom-line, people just hate dropping that dough.
What you’ll want to do is run through the arguments you and your sales team will likely be facing when you reach out to customers. Then prepare for those arguments.
They think it will be too expensive: It’s hard to perceive how much money we lose with lost time. At the end of the day, if you lose time, your bank account still looks the same, so the pain isn’t as bad, but spending money on you is tangible. It is a psychological thing.
Explicitly outline their lost costs they don’t see. Look at the hourly rate of your client, suppose it is $100, show them that one single issue could cost them hundreds, even thousands if it takes even one day to solve an issue in the break-fix model. Just do the math, 8 hours in a work day times $100, $800 lost.
Also be aware, in their mind they will continuously rationalize their ‘lost time.’ It’s not like they will be locked in a box and frozen in time if the servers go down. They can still read books, do chores, call their mom and be “productive.” So keep this in mind as they will make mental excuse. Just stick to your guns. Keep your pen on the bottom-line, $800 lost.
They don’t see how it will help their business: Small business owners, or any business owner will likely say “the way we’re doing things currently seems to be working.” All this means is that they don’t truly realize what MSP means and what it may enable for you and for them. The technology benefits have not been communicated.
This is your opportunity to show them what would change with managed IT services. Show off the all the cool stuff you can do. Have readily available YouTube videos, pictures and charts that showcase the technology you’ll be using. Show them remote management, show them how much data and information you’ll have on their system.
They don’t understand the risks of not having managed
IT services: The third most common hesitation you will find from business owners will be the miscommunicated level of risk. For as long as they can remember, without having an MSP running behind them they have survived.
It’s hard to understand what can happen if they don’t have any prior experience in ‘shit hitting the fan’ people think it will never happen to them. Imagine yourself as an insurance company. Most people buy insurance because it’s what you do. It’s become a social norm.
First, kind of like above, talk about what could happen without your services. AKA - what you are preventing. Second, you’ll want to double down on this point then talk about the costs if shit does go haywire without your preventative expertise. Third, you’ll probably want to make references to how common it is for companies to operate under MSP. Play the social norm card.
This isn’t Goodbye, it’s See You Later
That just about concludes the basics of switching over to MSP. It’s an exciting time for your business if this is something you are seriously considering. If you ever have questions on the process, you are welcomed to reach out to our team. We read a ridiculous amount of information to put this guide together, so at the very least, we could point you towards our favorite resources.
Just know this is a time where you are committing to and investing into the better business life for yourself and your clients. The MSP model helps everybody do better.
Treat yourself right!
Chapter One: Why You Should Probably Consider Switching from Break-Fix to MSP