In a previous post, we discussed why it was a bad idea to have any break-fix services in your IT offering. We talked about moving away from break-fix and moving toward a model that can offer you predictable, recurring revenue. Although the title of this post may seem to contradict the previously mentioned one, it actually supports it. The goal is always to move to a full managed IT services model, and in some cases, offering break-fix services can help you get to that point.
How can offering break-fix help you move away from break-fix? That answer changes depending on the size of the managed services provider (MSP). The break-fix strategy for a small MSP is going to be different than that of a larger MSP. Let's look at both scenarios.
The Smaller Guys
For smaller MSPs, sometimes break-fix revenue is simply too much to cut out of the business. That's understandable. If you're in a situation where pulling the plug on break-fix could mean pulling the plug on your business, obviously we don't recommend doing so. If you are relying on break-fix to augment your services, you should be tracking the cost of these "one off" projects and showing these clients the ultimate cost of relying on break-fix projects. At what point would a monthly payment plan be more cost effective? If your clients save money by moving to a proactive IT services model, it's going to be a much easier sell.
Perhaps it's time to raise the service rates of your break-fix services so that "magic number" is reached sooner rather than later. The goal is to shrink your number of break-fix clients not because you are losing them, but because you are converting them. How many projects would you have to complete in a year for that client's billing to be more than if they were on a managed services model? Find that number and communicate it to your break-fix clients. Although it may seem foolish to convert clients who are billing more per year than most of your managed services clients, the break-fix money is not reliable. Moving break-fix clients to a managed services model allows you to lock them in at a number that you can count on.
The Larger Guys
If your business doesn't rely on break-fix to augment your services, break-fix can be used as a means to get your foot in the door with potentially high-billing clients. Lets say you are talking with a prospect that could turn into your #1 billing client if they would go all-in with a managed services model. While they're interested, they're reluctant to agree to paying a monthly fee for IT issues that may or may not occur. Get them in the door by agreeing to take on a break-fix project or two for them, all the while demonstrating the true value of a managed services model and highlighting the potential cost of downtime that comes along with relying on break-fix services. If this potential client is happy with the projects that you do for them, they'll be more likely to convert.
If you do decide to take on a break-fix project for a potential client, make sure you're profiling and exploring while doing so. Find out what their biggest IT pain points are and demonstrate how you can help to alleviate them. Be savvy and know which questions to ask.
This sort of approach allows you to be picky. You don't have to do break-fix projects if the value of the client isn't high. If there are smaller businesses that are looking for break-fix help, tell them you'd be happy to have them as a client on your managed services model, but you do not provide break-fix services any longer.
So, it's clear that the goal is to get clients to buy into your managed IT services model. A managed services model provides you with predictable, recurring revenue that you can count on. The goal of this post was to demonstrate how you can leverage break-fix projects to demonstrate the true value of your managed services offerings. Hopefully you've already converted all of your break-fix clients. But if not, these tips just might help.
What are the must haves for you managed IT solutions business?
By Meaghan Moraes
By Lily Teplow