Top 5 Challenges of Selling Managed Services in 2016

Top 5 Challenges of Selling Managed Services in 2016

February 3

Lately we’ve talked quite a bit about marketing strategies that can help IT service providers secure new clients. We know it’s a detailed science, but in the case of MSPs, it’s apparently a classic case of easier said than done.

CompTIA’s fourth annual Trends in Managed Services report suggests that MSP adoption is surprisingly low among IT professionals and business users. According to the study, roughly 7 in 10 organizations did not use any form of managed IT services. The following list outlines why managed services may not be catching on with firms that would appear to need them most.

1. Justification

IT is just as much a core function as marketing or sales. As we’ve discussed here in the Recovery Zone, even bigger organizations struggle with taming it. They could use help. But not all are reaching out to manage services to obtain it. Through easily accessible self-service tools, the cloud is enabling firms to obtain the IT resources they may have traditionally obtained from an MSP. Then you have those who are blind and in denial. Those who fail to realize they’re in desperate need of a managed solution.

blind photo

Selling managed services is similar to selling just about anything when considering that like everything else, the MSP customer profile has changed. The ideal customer desires more than just another service. They don’t merely want to take a load off. I would be willing to wager that they fall somewhere to between personalization and the utmost flexibility. MSPs must stay targeting the right channels with marketing messages that are crafted to ever changing customer dynamics.

2. Real Cost Value

The CompTIA report found that cost savings were a driving factor for 28 percent of firms with less than 100 employees. In terms of why firms adopt managed services, savings/ROI dropped from the number two spot in 2014 to number four in 2015. In theory, MSPs can help clients save money in wide variety of ways, starting by eliminating the need to hire additional IT staff and preventing downtime that can lead to countless amounts in lost revenue. The report findings may suggest that selling savings is getting increasingly harder for MSPs.

Today’s enterprise is digitally aware and rightfully cost conscious. Managed services represent yet another chunk out of the budget, and unlike a CRM or email marketing platform, accurately gauging the return on such an investment can be rather tricky to say the least. MSPs chanting savings have to cut to the chase. They must be ready to present a case that details where specifically their services can help the client trim costs and justify that investment. The cost value must be crystal clear.

3. Security Concerns

I recently had to put another computer in the shop. This time it was my brand new refurbished desktop. I’ve done business with this shop before, so it’s not like they’re complete strangers. Still, I couldn’t help feeling a bit uneasy about leaving a mere shred of sensitive information in their hands. Having to part with my admin password “just in case” didn’t exactly make me feel any more at ease, either. I can only imagine the angst business owners and CIOs must feel at the mere thought of handing over the keys to a multi-million dollar infrastructure.

information security photo

The average company leader is at least generally aware of the dangers and risks security threats pose to corporate data, dollars, and identities. They’re afraid to let anyone in and paranoid that their trust of an outsider will lead to disaster. An MSP must be prepared to identify vulnerabilities in the prospect’s existing security strategy and communicate how they can patch up the holes. MSPs in general are challenged with just assuring potential clients that their services offer security, privacy, and peace of mind. They need to feel safe with their data in your hands.

4. Fear of Change

Change is often hard to deal with. Some of us will remain in the most imperfect of situations just to avoid it. When it comes to managed services, change could result in a simple case of needing to train employees on how to use a new system. Or it could be as complex and radical as needing to restructure entire IT operations. Whether it’s adjustments to staff or revamping existing business processes, change can be a tough pill for any company to swallow.

One of the most interesting takeaways from the CompTIA study is that more firms are looking to MSPs to complement their current IT rather than replace or deduct from it. According to the report, backup and disaster recovery, CRM management, network monitoring, and email hosting are among the main reasons firms turn to MSPs. Why is any of this important? Well, if you buy into this change mumbo jumbo, you may agree that these areas are the most popular because they are either the easiest to implement, or cause the least amount of disruptions for internal IT. In turn, they could be the easiest to sell.

5. Lack of Control

A managed arrangement is the quintessential outsourcing scenario. The MSP simplifies IT for clients by tackling the most grueling aspects of a given function and freeing up staff to focus on core competencies in other key areas. In exchange for this freedom, the client gives up what some might feel is a considerable degree of control. Maybe there’s some truth to that talk of IT managers being control freaks. Whatever the case, some fear this crucial exchange of power could have an impact on aspects such as quality control, customer satisfaction, and revenue potential.

The power struggle between service provider and client is non-issue when all the stars are aligned. While the client loses direct control of the functions they’ve outsourced, they actually gain a greater degree of control over their infrastructure in total. They also retain control of existing policies, accounts, service levels, and so forth. It’s a partnership, but at the end of the day, the client calls the shots. An MSP’s ability to sell that their role is acting as an extension of IT rather than a replacement will go a long way in putting potential customers at ease.

A Final Word

Some companies are content with their IT and how they’re handling it. There’s no changing their minds. However, not all hope is lost. Back to the CompTIA report, the survey found that 4 in 10 larger companies admitted to researching managed services or consulting with an MSP. Furthermore, another 50 percent of respondents said they would consider using a third-party IT service provider within the next two years. I think these stats highlight the importance of not giving up on non-MSP users and simply being ready to present a compelling case for your offerings at all times.