Note: This article also appears on MSP Mentor.
The conventional wisdom these days seems to be that MSPs should ditch break-fix all together. We’ve heard this advice from MSP partners like Guy Baroan and Vince Tinnirello. According to both of them, the MSP model makes sense because it’s simple to invoice, easy to budget for, and both clients and the provider have service agreements that make it all quite simple. Not to mention the fact that it’s a much more proactive method where maintenance occurs constantly, not just when something goes wrong.
Little did I know, however, that there are plenty of MSPs that are happy to work as hybrids, and they have some good reasons for doing it that way.
To transition clients to full managed services
I’ve heard break-fix services (like many other things) described like a game of baseball. The idea is to get players on base, move them along the bases, and get them home. Essentially, the idea is to bring a client on as a break-fix client (first base) with the intent to move them to a full managed services model (home). At the beginning you would only provide break-fix for the client. As soon as you can, you get them to pay for one of your services on a monthly basis (backup in particular is great for this). After a while you’ll build a billing history with the client and you can actually show them how much they paid for service compared to how much it would have cost them monthly. The monthly alternative often piques their interest because paying monthly for full service is often the more economical option. After you explain why being proactive about network management can result in even more cost savings, they’ll be ready to dive for home.
To deal with “those” clients
There are probably those who, despite the cost savings, convenience, and other benefits of managed services, might still be resistant to the idea of monthly fees. If you try the above method to help them transition, you may be stuck either doing it their way or firing them as a client. Whether it’s worth it is up to you. It could be that this stubborn client that pays well and is extremely loyal, but just don’t want to pay monthly. Leaving that money on the table could be a mistake that leaves your pocket book feeling flimsy, so don’t dismiss deals like these until you’ve weighed them carefully.
To bill clients for emergency support
Some service providers suggest a hybrid model where services like anti-virus, backup, and management are all part of the monthly fee, but emergency support is billed hourly. This makes sense when many of the big problems a business can have can be avoided if a professional is keeping an eye on the systems at all times. Still, I can’t help but wonder if this sounds a bit greedy. Clients need you the most when there’s a problem, but should you really charge them a higher premium when they need you or is it best to bake the cost into the monthly fee they’re already paying? If you’re keeping a close eye on client systems, these types of emergencies will be rare, but they still happen. If you do choose to charge for emergency services, make sure clients understand what to expect if something does happen.
For special onsite support and one-off projects
There are situations where clients may want you for various types of onsite support or for a one-time project—there may even be businesses with an IT staff that just need you to help with a migration project or hardware refresh; you never know. It’s tough to be a company that provides service for a monthly fee and you may be capable of doing these types of projects, so remember that just because you have a managed services contract doesn’t mean you can’t still do hourly work for one-offs. If it’s profitable and you have time and resources to pull it off, why not get it done?
In most cases it seems beneficial for MSPs to be a hybrid in so far as they at least keep the break-fix option open for when it makes sense. Really, providing good service and being profitable involves a certain amount of flexibility to take care of various clients, provided that it’s within acceptable (profitable) parameters for you.
Photo credit: Kevin Saff via Flickr