When I was younger, my family used to frequent a small local restaurant almost weekly until it was torn down in the early 1990s. The proprietor of Joe's Pizza had an almost clairvoyant knowledge of his customers' orders and habits. He recognized each customer's voice when they called in orders and usually guessed each order down to the toppings. The order always would be ready on time, and Joe often had the change neatly counted out for customers. We rarely ordered the same thing two weeks in a row, yet he could anticipate what our selections would be more often than not. Other restaurants may have had better tasting pizza, but Joe's service kept us loyal customers.
Joe wasn't a mystic or savant, but he studied his customers' habits and made his service a repeatable experience. He told me a few years ago that careful listening and observation are the keys to building a successful business. Joe's extraordinary memory was his best asset, but today VARs and integrators can create monitoring systems that will help them understand their customers' needs just as well. He constantly tweaked his menu, service, and delivery options based on customer feedback, and solution providers can provide similar support modifications for their clients with managed services.
Many VARs say managed services help improve their success. The best customers to convert to managed services are those you know best, such as long-term clients that have indicated high satisfaction with your support. When I'm asked to define managed services, I describe Joe's ability to anticipate our pizza needs. In a similar fashion, MSPs (managed services providers) monitor the needs and performance of their customers' systems and can send technicians on-site to make adjustments and repairs before a failure. The opportunity managed services provide to customers is proactive support, reduced downtime, and a manageable monthly fee.
"Managed services" itself is a loose term used to describe everything from network monitoring to SOA (service-oriented architecture). Thus, it's hard for channel partners to make a business case for managed services — but that may change with recent developments, including the support of distributors such as Ingram Micro and Avnet and organizations including CompTIA.
There are a few key elements MSPs, distributors, and industry organizations say should be included in a definition of managed services. Recurring revenue, SLAs (service level agreements), monitoring of customers' systems, and proactive response (remote repair and updates) are included in most managed services businesses. MSPs benefit from the recurring revenue as well as reduced service costs, since a single technician can monitor and remotely manage the systems of several customers. Experienced providers say a well-designed managed services plan actually increases communications with clients, with a shared goal of reducing downtime. Customers are more apt to upgrade systems to ensure this improvement happens, and it allows MSPs to increase solutions sales as well. The end result is reduced service costs, stable monthly service revenue, and incremental hardware and software sales for providers using a managed services delivery model.
CompTIA recently surveyed current and soon-to-be MSPs and found that quality and accountability were characteristics they thought were important in this delivery model. "The survey showed that managed services success comes from providers that already had great customer relationships," said Brian McCarthy, COO of CompTIA. "Those service providers are more likely to clear paths to managed services implementation and discuss the real advantages of this model with their clients."
Frequent communication is crucial to thriving as an MSP, from constant discussions with your clients to clear and open conversations on customer service standards with your employees. This creates increased client trust and improves your chances to sell servers, switches, and other systems that reduce IT failures and improve performance. Managed services, when properly implemented, provide additional details of your customers' needs and can pay off with increased product sales. It seems like a little extra attention can be profitable for IT providers, as well as pizza shops.