I was recently involved in a fascinating discussion with a number of other business owners from a variety of industries around the world on what it means to “Retain a Client”.
In that discussion, I reflected that when I owned an IT Managed Service Provider (MSP) we worked with a rolling one-month contract.
Put simply, we lived and died by our service, and if the client wasn’t happy with our work – they could give us 30 days notice and walk away.
What’s more, we’d help them to do this by making the transition to another IT provider very simple through an effective hand-over process and strong documentation of their Infrastructure.
Now I’m not naive enough to know this attitude will work in any industry. There are numerous legitimate reasons for trying to keep a client from leaving you from contractual perspectives. Typically though, these measures are required when the customer is shopping on price alone – and the supplier is selling on price alone.
But in our case, in our industry, we used the 30-day contract approach and did not lose clients.
However - there were cheaper MSP’s than us, so why didn’t our clients simply up sticks and move to these other providers?
I like to believe it’s because we delivered value, and through delivering value, we built trust with our clients.
What do I mean by delivering value? Well, as a Managed Service Provider you’re typically hired – initially – to make sure a clients IT Infrastructure is sound, to minimise down-time and to troubleshoot any problems that arise. You are the “IT Guy”.
In the first stages of your relationship with your new client – that’s enough. Typically you win a client when their IT Infrastructure is in a shambles due to long-term neglect, and when they’re experiencing lots of problems. You charge in like a White Knight and save the day, fire-fighting problems and over a short period of time, bringing stability to the network.
But then a strange thing happens.
After you’ve put out those fires, and things start to go smoothly for the client – they begin to forget the pain you helped soothe from the early days of your relationship. They don’t see the work that you do behind the scenes to keep their network up and running, and they start to question why they’re paying you at all. Put simply, they don’t see as much value anymore, and you go from being wonderful to a necessary cost. And if something is a cost, generally people shop for the cheapest option.
So how do you deliver greater value than is expected?
It’s by looking for opportunities to over-deliver on the value your client expects an IT company to provide.
For an MSP, it might be through delivering free of charge Quarterly Business Reviews (QBR’s) – where you sit down not to talk about any Technical problems, but to ask a client about their business. Where are they going, and how can you help them? By asking these questions, you’ll understand your clients business and demonstrate that you want to help them grow.
It might mean delivering Lunch and Learns – where one of your engineers organises to grab a pizza or two, and at no extra-charge to your client, sits with members of their team to show them how to use the latest features of Microsoft Office 2010.
It may be as simple as acting as a connector, introducing your client to other business owners in their industry sector. You’re likely to come across these sorts of connections quite easily during the day-to-day work you do, but by keeping an eye out for potential relationships that may prove valuable to your client, you’re demonstrating that you want their business to grow.
Another approach is to draft up a monthly e-mail newsletter, where you provide tips and ideas to your clients to enable them to do things more effectively. This approach can be used to demonstrate your value to prospective clients also.
For our part, we used to work closely with our vendors such as Microsoft to make sure our clients were involved in Beta Programmes and Marketing initiatives. The client got a kick out of being involved in evaluating the latest technologies, and our Vendors were pleased to be working with us to help them grow their business. In that scenario, we provided value to both our vendor *and* client.
Whatever methods you choose to use, by over-delivering on value you’ll be seen as much more than the “IT Guy” who fixes problems, and instead be seen as an essential partner who adds value to your clients business.
If you consistently add value, you’ll build trust.
And once you are both consistently adding value and you are trusted by your client, you make it a very difficult decision for them to move away to another MSP… regardless of the Terms & Conditions in your contract.
As the former owner of an award winning IT Managed Service Provider, Richard Tubb works with MSPs to help them increase sales, take on employees and build up relationships with key industry contacts. You don't have to do it alone any more - contact Richard and have a chat about your needs and how he can help you.