Today, a managed service provider is expected to do more than ever before - a lifetime away from the humble break/fix provider of the business' youth. Along with managing IT estates and ensuring a reliable proactive service, MSPs need to provide a plethora of services - security, backup, cloud services, as well as ensuring IT issues are resolved as quickly and preemptively as possible.
With increased responsibility, larger estates and greater scrutiny over services, the days of gratefully accepting any business are in the past. The truth is that some clients are bad for your business. But how do you recognise those that have become a drain on your bottom line?
Having owned my own MSP for 10 years, I can tell you that whether you're an MSP or a traditional Break/Fix IT provider, you'll probably have clients who don't listen to your advice and instead head straight to Twitter to moan about their issues. Those clients who demand immediate attention when an issue occurs, but whose payments always get 'lost' in the transaction. Ringing any bells?
If so, you'd be well advised to fire them. It's a bold statement, but failure to do so will see you burn through more hours, staff and revenue than you can imagine - often at the expense of other clients and your own business. Yet how do you approach historically non-profitable clients that are stuck in the past?
We need to talk...
The phone rings, you've spotted it's a certain client, and the mood in the office dissipates. This feeling doesn't happen overnight, it's probably been bubbling under the surface for quite a while - an accumulation of weeks, months or even years of the client ignoring your advice, raising his or her voice and generally showing a lack of respect for what you're doing.
However, don't underestimate the power of words. Speaking directly to a problem client about the issues you have with the team can work wonders. In some cases, you can challenge the client and redefine the relationship. This isn't easy and the head on approach shouldn't be taken lightly, as changing a long-term relationship can be difficult.
The best outcome is a healthier relationship which helps move your business forward. The worst - the client doesn't agree. If this happens, it may be time for you to fire the client and concentrate more of your energy on the clients who appreciate your counsel.
It's all about the money
There's a direct correlation between the quality of the clients you have, and the fees you charge them. Typically, clients who are prepared to pay higher fees respect your time, knowledge and experience without wanting the Moon and the stars on a shoestring budget.
By raising your prices across the board, you'll weed out the legacy clients who work with you because you are cheap, leaving only those clients who truly value your service.
Raising your price for a single problem client could also be a route forward. The best outcome - the client will grumble and decide to go and work with somebody cheaper, leaving you without the job of having to fire them. However, if the client decides to stay at least you are getting compensated for suffering them. A win, win situation.
The squeeze
There isn't a single MSP owner or technician that feels they have a free hour, or a to-do list that isn't as long as their arm. Throw in a problem client call demanding immediate action and you find you never touch the all-important to-do list.
One of the ways to approach this is to treat your list like as if it's a bunch of client appointments. The next time your problem client calls, let the client know you can't attend immediately, but can do so within a few days' time. But here's the important bit - empathise and acknowledge that this might not be suitable for them, in which case you can provide the number of another local IT company who might be able to help them sooner.
Either the client will start to appreciate your business, or they'll take the headaches they cause to one of your competitors. Good luck to them!
It's not me, it's you
Making the decision to fire a client is never easy, and the way you fire them is just as difficult. You don't want them to talk poorly of you to others, or for the relationship to end under a thundery cloud. However, the price of putting up with clients within your MSP is bad business, high staff churn and damaged profits.
Let's be honest, the clients you decide to fire will typically be unprofitable. Sometimes it's best to call time on a relationship that's run its course and concentrate on how to maximise revenue with respectful, like-minded clients that drives your business forward. Trust me, when I say there are enough of this type of client out there so you shouldn't waste time working with anybody else.
Dave Sobel is senior director of Partner Community at SolarWinds MSP
