Choose Your Managed Services Model Wisely


Jul, 14

Choose Your Managed Services Model Wisely

One of the keys to running a successful managed services business entails developing an attractive model that highlights the features and benefits of your services. Rob Merklinger, vice president of sales at backup and data protection vendor Intronis, outlined the five most common plans that MSPs use, in his latest blog titled: Build A Foolproof Managed Services Sales Strategy.

You may recognize one or more of the following models:

1. The Per-Device Pricing Model
(strength = easy to understand; weakness = too price focused)

2. The Per-User Pricing Model
(strength = simple price model; weakness = more upfront planning required by MSP)

3. The Tiered Managed Services Model
(strength = many customers prefer options; weakness = some customers don’t know which option they really need)

4. The Á La Carte Managed Services Model
(strength = ?; weakness = many, including puts too much burden on the customer to build a managed services plan from scratch)

5. Prepaid Block Time
(strength = adds significant uptick in monthly recurring revenue; weakness = difficult for MSP and customer to predict number of hours needed during the “honeymoon” phase of a new managed services contract)

In addition to explaining each model and pointing out the strengths and potential weaknesses of each one, Merklinger points out two necessary prerequisites to making any managed services model work: 1. The MSP should be the one recommending a specific program, not the customer. (Think “Trusted Advisor) and 2. The discussion should focus on the value of the services being provided rather than the price of each individual component of the program. As Gary Pica, founder of TruMethods, is famous for saying, “You don’t want to be in the business of selling sugar, flour, and eggs — you want to be in the business of selling cake.”

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