Selling Managed Services

The managed services market is growing rapidly. However, many organizations remain unfamiliar with the concept of managed services and are therefore unsure of whether they should work with a managed services provider (MSP). Selling IT services depends largely on educating the consumer about the benefits of working with an MSP, understanding their pain points, and then making a pitch that’s tailored to their unique business needs. Here’s our guide on how to sell IT services to businesses of all sizes.

Tips for selling managed services

The process of selling managed services will vary depending on the type of service you’re pitching and the company to which you are selling. But generally speaking, there are a few key points you should hit with every sales presentation.

1. Focus on value: Many MSPs work on a retainer or a fixed fee basis, rather than a break/fix cost structure. For a customer who is used to only paying when something breaks, an ongoing fee can feel like a big adjustment. Highlight the value your MSP will bring to the table. By proactively working with the organization, you can save their business money in the long run. Most importantly, what is your specific value proposition? What value do you and your company add to the product that is different than anyone else?

2. Tap into a pain point: Try to identify a problem that the organization may be facing and show the value your MSP solution can bring to resolve their issue. Working with a customer who is spending a boatload on traditional on-site storage? Explain to them how a cloud solution can reduce maintenance costs and provide the flexibility to work and collaborate remotely. Or maybe IT is a general sore spot for a small business owner who has no technical background: your MSP can take the burden off the company by taking over this role entirely.

3. Provide some background: One of the barriers for many MSPs is that potential customers simply don’t understand what they are selling. This is in part because there are so many managed IT services you can offer. Try to break down your complex list of services into categories or tiers, setting out the business benefits or result of each service instead of the components or technical details. If you are using a complex contract or service level agreement, go through the document piece by piece to make sure the customer is comfortable with your agreed-upon terms. Transparency will build trust and help close a sale.

4. Price your services appropriately: This is a big stumbling block for many MSPs. Overcharging or overpricing your quotes is a quick way to destroy any trust you have built with your customers. But undercharging or underpricing your quotes can lead to nightmare customers—and lead to others perceiving your services as low quality. Make sure before you go into a sales pitch that you’ve determined the fair market rate of what you plan to offer. Check out other competitors’ websites and ask customers what they can afford to budget. Whatever your price point, back it up with great service.

5. Master the cold call: A good way to get new business is to use a referral program, but cold calling is somewhat unavoidable. MSPs that master the cold call can achieve big growth—use these tips to make your sales calls go smoothly.

• Don’t go in with a hard sell: Your initial call should be a simple introduction and a conversation to determine if there’s enough interest to set an appointment for a later discussion.
• Research your prospective target: Start by identifying the type of company you want to serve, and only reach out to prospective customers who fit the profile. What company size makes sense? What vertical industries? What geographical locations?
• Go from “cold” calling to “warm” calling: Preempt your cold outreach with a sales letter or email introduction prior to making your first cold call.
• Set expectations: don’t try to trap a prospective customer into speaking with you. Try to be honest in your cold call and ask for permission to talk to the customer. Be upfront and set expectations at the outset.
• Ask open-ended questions: try to get the information you need while also freeing up the prospective customer to tell you more about their managed service needs.

Learning how to educate customers, build relationships, and be transparent in your pricing and services offered can go a long way in beating the competition as an MSP.

Managed services for small businesses

Small business can be a tough target for MSPs. With limited resources and tight budgets, SMBs may be less likely to take a risk on working with a managed services provider. However, many small business owners also have limited IT experience, and outsourcing their managed IT services can be a big benefit for their business venture. It’s up to you as the MSP to work out how to sell IT services to small businesses in a relationship that is mutually beneficial.

These are some sales points to hit if you’re wondering how to sell IT services to small businesses:

• Show them the true cost of downtime. The best SMBs think that adding their invoices together shows them what they spent on IT last year—but they’re wrong. Lost productivity or opportunity is a cost of downtime also.
• Justify the retainer model (versus a break/fix fee). Show them the ROI on the service by explaining how MSPs save both time and money. Highlight how reliant the business is on their computer network by asking a few simple questions. How much did they invest in their computer equipment? Are they in a position where they could make this same investment again should something go wrong? Illustrate that ongoing maintenance can minimize risk and significantly impact their bottom line.
• Data security is improved by MSP support. Small businesses are disproportionately impacted by cybersecurity breaches. Highlight how your MSP can offer localized data storage facilities, multiple redundancies, and high-level encryption to secure their customer data.
• MSPs bring trusted industry expertise. You must gain trust both by showcasing your expertise and staying honest. One of the biggest benefits of working with an MSP is the industry expertise and knowledge they bring to the table. Use case studies or testimonials from your previous work to illustrate the positive impact your service has had on other customers’ systems. Use those reviews to emphasize your reliability, too—no one will give you the keys to their network if they don’t trust you.

Questions to ask when selling managed services

Selling managed services to businesses starts with building a relationship. As with any conversation, asking the right questions can put you on track for a fruitful relationship that leads to a long-term sale. Ask these questions to boost your sales strategy:

• What are your current cybersecurity concerns?
• How have network downtimes impacted your bottom line?
• What are some IT concerns that are keeping you up at night?
• How much did you spend on network or IT equipment repair over the last year?

These open-ended questions can help you unlock some powerful insights and start the conversation off with your potential new customer.

Interested in more sales strategies for reaching more customers and pitching your managed services? Explore our MSP Institute or contact our Sales Team for other strategies you can use to grow your business.