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Demonstrating Value in Managed IT Services

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“There is no value until the client perceives there is value”

I have used this statement in at least one of my recent blogs. But it could just as easily be stated:” One man’s junk is another man’s treasure” (or one man’s treasure is another man’s junk) because essentially, they mean the same thing. The underlying theme being that if there is no value to the buyer, it doesn’t matter what the price is. You can’t sell a cheeseburger to a vegan whether you charge 10 bucks or 10 cents. Wrong product, wrong buyer.

46737799 - closeup beautiful girl thinks looking up at bright light bulb isolated on gray wall background. idea, business, education and people concept. face expressionOK – so you say I have a firm grasp on the blatantly obvious; that much is clear. But what about when the scenario is a little grayer? What if the customer perceives no value only because no one has every clearly demonstrated any? It may be just a matter reframing – of shifting the perspective a little…

I had an interesting conversation with a prospective client the other day. We were talking about the different models of IT support. We covered everything from a full-time administrator, to a part time guy with a full-time gig elsewhere, to outsourced support. We also discussed different billing models from “time & materials” (hourly rate) to block time (pre-paid labour hours with a cap) to flat-fee billing – a la Managed IT Services. My prospect, while currently using a good friend who has a full-time gig with TELUS, understands that model has no future for his operation and he also knows that at the size of his business, he certainly cannot justify a full-time administrator. In short, he understands perfectly well he needs to outsource and he’s quite ok with that.
When the topic of conversation found its way around to cost (as it inevitably does; and should in any qualifier conversation), my prospective client balked at the idea of Managed IT Services and the flat-fee or subscription model. He said he couldn’t stand the idea of paying for service that he may not receive and he viewed it much like paying a retainer for a lawyer. In short, he saw no value in the proposition whatsoever.

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I’ve got to tell you; this is my absolute favourite scenario. I revel at the challenge of reframing someone’s perspective by clearing up all-too-common misperceptions. People tend to have preconceived notions about a value proposition and it takes a lot more than simple logic to change that. After all, people don’t buy on logic, they buy on emotion and changing your own emotions about something is really hard, let alone changing someone else’s! But I love this kind of challenge best of all. Why? Because the Managed IT Services model is far and away the most value-packed model of the entire lot! A total winner for the client. Of all the clients I have converted, none – not a single one – has gone back to the “traditional” model. What does that tell you?

Long story short, I’ve written reams about the value of Managed IT Services when compared to the traditional break/fix model so I won’t prattle on about it here. You can read my many other blogs A cost-value matrix with arrow and targetabout that subject or just peruse our website to understand the ROI associated with this most popular of models.

Back to my prospective client… I told him if is time & materials billing he was looking for, that would take us out of the running and thanked him for his time. Then I said that since we’re out of the running anyway (read: no more inherent sales pressure), perhaps he wouldn’t mind elaborating on why the steadfast disdain for Managed Services (read: my opportunity to reframe). Ten minutes later – after I gave him a ballpark indication of cost which, incidentally, was fair but more than what he was currently paying for break/fix service – we setup an appointment for a technical assessment of his site to be followed by a proposal. At the end of the day, I may not have a convert but at least now he sees the value proposition in a way that had never been presented to him before. We went from no perceived value to richly perceived value in 10 minutes.

Not clear on the inherent value of a Managed IT Services arrangement? Call me today and I guarantee that with 10 minutes of your time, you’ll see it too!