How to Fail As An MSP, Part II (Common Mistakes to Avoid)

By Peter Klanian 2

Why isn’t every VAR a successful managed service provider (MSP)? There are many paths to success, but aspiring MSPs also make many common mistakes that hinder their ability to become profitable. In our previous guest blog, we talked about four common errors MSPs make. Interested in becoming a successful provider of managed services? Here are four more common blunders you need to avoid.

Error 5: You wing it – you don’t need new sales tools.
Typical product sales tools focus on the technology of the offering, and perhaps the reputation of the manufacturer. But a managed service is delivered by you, and it becomes an integral part of your customer’s business. This means you’re selling the value proposition of managed services (e.g. IT outsourcing) via the competence and reliability of your organization. To do that you’ll need new sales tools – some that focus on the business value of managed services and others that highlight your organization.

Error 6: You make the customer conform to your technology.
Whatever technology you use to deploy managed services, it must have very low impact on the customer’s environment. The more things you have to change to deploy managed services, the more objections will be raised, and the longer the deployment will take.

From a technical perspective, the following are critical requirements:

Error 7: No news is good news.
If you encounter a problem in your delivery of the managed service, e.g. in monitoring the customer environment, you’d better know about it. Nothing will cause a customer to lose confidence more quickly than having them discover issues you don’t spot and correct. To that end, you need to actively monitor your ability to manage your customers. There are two aspects to this:

Error 8: You deliver the service, send the bill, and think you’re done!
In many instances, if you’re delivering managed services properly, the customer never sees a problem or the efforts you’re undertaking on their behalf. But because you’re billing them regularly, it’s critical to justify the invoice with a demonstration of the value you’ve provided. The best way: comprehensive, high quality, management-level reporting.

Customer reporting should include, at a minimum, the following information:

Stay tuned for our next blog post when we will discuss several more mistakes companies need to avoid in order to become successful MSPs.
Peter Klanian is a senior channel sales manager in the Dell Global Services organization at Dell Inc., which develops managed services software for MSPs. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s 2009 Platinum sponsorship.