New Service, Support Revenue Is in Plain Sight

If one of your strategic business objectives is to grow service revenue, then expanding existing offerings and adding new offerings to your current customer base may be your best bet.

While this might sound like common sense advice, it’s often a missed revenue generator, yet the easiest to get started with. That was one of the key messages shared on a recent webinar – “Emerging Service Revenue Generators” – sponsored by CompTIA’s IT Services & Support (ITSS) community.

That’s where Mark DiGregorio, owner and president of Site Tech Services, initially put his energy as he built his business. DiGregorio took over Site Tech Services a year-and-a-half ago. Prior to the acquisition, Site Tech Services was an 18-year old Cisco shop that focused on network infrastructure and support, and serviced regional and local clients throughout Florida. According to DiGregorio, under the previous owner, company revenue had remained relatively flat for years.

“If I was going to grow the company I needed to look at a few things – do I expand existing offerings and run out and try to find new clients or do I expand the breadth of services that I provide to people I already do business with. Or do I develop new offerings and create a new market?” he said.

Given the long-term client relationships the company fostered over its 18 years in business, and the fact that a few existing employees, who stayed on through the change of ownership, were in tune with what many of the clients needed, especially in terms of other providers, it seemed like a no-brainer to look for growth within the installed customer base.{ad}

“What my ‘a-ha moment’ was — we owned the highest end of the support: the network. So anything that came in or went out of my client’s IT infrastructure hung on the network that I managed,” DiGregorio said.

While Site Tech Services may have managed the customer’s network, other partner firms were selling products to these customers. “Another ‘a-ha moment’ was that because I had long-term relationships with many of our clients, if I was going to try something new, they would be great to try that with because they’d be more forgiving in any new offerings that I would have,” he added.

One example of how he did it: DiGregorio plunged into a totally new area — IP-based security systems. An existing luxury new car dealer client had an old analog security system that needed to be replaced. The customer asked Site Tech Services to work with another company that supplied IP-based security cameras because the supplier wasn’t a network expert.

“Of course I found that to be quite opportunistic and I offered to sell the camera system. I figured, well, we installed stuff before; we could do this,” said DiGregorio.

With the help of distribution partner ScanSource, which led Site Tech Services to IPConfigure and Axis for training, support and hardware, the company carved out …

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… a new product niche for itself after completing the $150,000 project. DiGregorio expects 5 percent of the company revenue in 2016 to come from IP security systems. The partner firm not only gained additional clients for IP security systems but these opportunities have led to managed care/network support customers.

Today, Site Tech Services has 18 employees, up from seven when the company was acquired. DiGregorio also reported that company revenue was up 30 percent in the first year and expects to double revenue by the end of the second year.

Amy Babinchak, owner of 16-year old Harbor Computer Services, shared how she morphed her business plans to stay relevant and insure future success.

Harbor Computer Services focuses on the small business market, or local companies, with fewer than 100 computers. Located in Michigan, about 60 percent of Babinchak’s customers are in manufacturing and engineering, while others are in accounting, legal, sales, distribution and health care. The company offers managed services and advisory services, and supports on-premises and cloud solutions. She is also the owner of two other IT businesses, Third Tier and Sell My MSP.

When considering business growth, Babinchak, like DiGregorio, identified opportunities that her business wasn’t taking advantage of.

“We also saw other vendor products coming into our existing client base and just ignored it,” she said.

The entrepreneur also focused on what other technology her clients were asking her to take care of. That’s when she expanded her offerings to IP phone systems, network bandwidth and websites.

“So many of our clients had phone systems that were more than 20 years old and were being hold together with a hope and a prayer and some duct tape,” she said. That, she noted was a pain point.

Babinchak identified a local IP phone system vendor to align with to expand opportunity. It was only natural to dovetail from IP phones to network bandwidth.

“When the network goes down, who do they call? They pick up the phone and call us,” she said, adding that while it was great to get the support work, why wasn’t her company getting the recurring revenue on the sale as well?

In summary, here’s some advice for partners interested in building revenue and growing their business: