Paradigm Shifts for Techs: Managed Services Part 1 by Derek R. Iannelli, IT Strategist, Progressive Integrations, Inc.,
When I ‘closed’ my first M&S agreement (maintenance & support), I thought I finally figured it out, and if I could sell enough of them, our business would making the American Dream come true. That was 10 years ago. Until this past year, I still had the same thoughts regarding M&S agreements until our economy started to affect our clients too. Instead of the fluidity or automatic renewal agreements (essentially blocks of hours for them to use whatever way they wanted), I noticed a change in our maintenance appointments first. They started to turn them down because they wanted to save their hours. What ended up happening, no matter what type of convincing argument I had, was it inevitably turned into a B/F (break-fix, one-shot, one-kill) situation, and in some cases I cannot get them back on the phone or to schedule an appointment to do much needed maintenance.
A friend of mine told me about managed services (he ironically was managing one of our clients – we also do AV work) and for him, it was cheaper to pay us for a block of hours to do hardware transitions and setups (because a plane ticket and his hourly rate were twice mine), so he actually made money on me doing his leg work. Long story short, he mentioned that for him to leave his desk cost him money and had I ever considered managed services. Our business models were different, he did SMB and ours are primarily SOHO. I was hesitant at first because most of our clients are high-end home owners and non-profits. I figured I might be able to roll out managed services to a few of the more extensive ones but was resistant in that, I did not see home owners paying a monthly fee, per machine to take care of their computers. Here is what I discovered. I was an idiot…but only for a short time.
Disclaimer: Because of my understanding of the ACRBO Code of Ethics, what I am about to share is based upon my personal experience and may not be the same results or even the correct perception as they occurred. This information is being offered as informational only and in the heart of SHARING to help you become successful by understanding a core issue: “No one gets extra credit for climbing the mountain when there is an elevator next door.” Essentially, what I am going to be sharing could potentially cause you to rethink your tech business and because of my mistakes, you don’t have to do them, your results maybe even better. There are no promises however. Background: I left full-time Christian ministry in 2007, one of the hats I wore was Technology Director. I have extensive experience with, owning a Computer Repair Business before ministry as well as some sales experience, and network marketing. I say all of this, because, it gives a foundation to where some of my thoughts are coming from.
When I came on staff with Progressive Integrations, Inc., I first was hired to set up and maintain their proprietary CRM solution. It was soon discovered that I might be able to fix a few other things too, while working on the database. LSS, I ended up taking care of the network. After I got the network to a manageable level, revamped their website, and installed a few consumer networks, I sat down with the owners and discussed adding another business unit, an IT Department. Progressive Integrations, Inc., was primarily an AV (audio-video) integrations company and I was discovering that more and more networking and pc/mac based devices were being asked for and implemented. We discussed the new IT Division, and I told them of my background with 2 other repair businesses I had, and said it had been a bit since then and I would need to do some research. They saw the need and told me to take it by the reins and let’s see what would happen. My research led me to Computer Repair Business Lessons Learned and Technibble. I devoured Daniel’s book and Bryce’s material, and for the most part, I knew and implemented already all of those things in my previous businesses and for me, I needed an out of the box kit, so I downloaded all the forms and customized them and started rolling them out. I also signed on with TechRepublic and about 6 other portal publications as well as the main AV publications and continued to monitor the industry.
At my 1-yr anniversary, I had developed roughly 100 clients with both B/F and M&S agreements and as a one man show, had the great asset of our AV installers who are involved in all 3 phases of construction (pre-trim, trim, final) and are cabling masters! I had set up VAR accounts with Cisco, Microsoft, Dell, and many others. Let me say, I am not a super sales guy. I just tell the people the truth and don’t ‘nickle-n-dime’, you either pay what we are offering or you go get it somewhere else. Most of our clients are willing to pay for the services and solutions and because of their demographic we do not have much comparison shopping. Also, I had a warm pool of over 1000 leads from the AV side and many of them have PC/Macs. Previously the owners had been referring to another local repair business, now we started getting flooded with people who were excited that they could have all their technology in their homes handled by one vendor. Because we have high integrity, are fair, and do great work, the homeowners of our area started talking; word of mouth advertising is the best marketing tool I have right now.
As you can imagine I stay pretty busy, but as I stated at the beginning of the article, I was an idiot. I am now at the end of my second year with Progressive Integrations, Inc., with roughly around 200 clients and looking forward, (actually about 5 months ago) I discovered that business was growing and that I would have to find some way to duplicate my time. Hiring a tech is not an option as I am just barely covering my salary, van, phone service, and an IT budget. We also informed all of our clients that we are shifting away from B/F and in January 2010, the only offerings (no more M&S agreements) we will have are managed services. We will still offer B/F services, but no discounted rates. We also have our AV side too. Already a little swarm has started (due to some marketing I did with ‘early adopters’ and ‘kudos’ to existing clients) and managed services is up and running. We also just started with our first SMB client. What I am going to share in the next series of articles is how I stopped climbing the mountain and started taking the elevator and managed services is key. Some topics we will be discussing are; educational marketing, daily intentional activities, networking (not the IT kind) to tap into knowledge pools and more.
