One of the recurring themes I hear from MSPs is that it’s possible to do such a good job fixing a customer’s network and other IT issues that things just don’t break like they used to. So, where’s the problem, you ask? The problem is that customers don’t like to pay a monthly fee for something that isn’t broken — and unlikely to break in the near future. I recently spoke with Sean Vojtasko, executive VP of BlueWave Computing, about this business challenge and was impressed with this MSP’s solution: “Ditch your 3-year managed services contract,” advises Vojtasko.
In fact, this MSP doesn’t even recommend a 1-year contract nor a bi-annual contract. BlueWave Computing contracts with its customers on a month-by-month basis. “We’re transparent with customers, and we embrace the fact that their IT needs are going to change dramatically within the first six months of signing a managed services contract,” he says. “What we usually see is customers go over budget during the first three months, they hit the budget the next three months after that, and from the sixth month on they start going under budget.” During quarterly business review meetings with clients, BlueWave account managers tell customers who are consistently running under budget about additional services they could allocate to their surplus budget. BlueWave allows budget surpluses to accumulate for up to three months, similar to how a telco may allow unused minutes to roll over to the next month. “Some customers choose to apply their unused budget toward special projects such as a server replacement, a new phone system, or cloud services,” says Vojtasko. “If a customer is consistently under budget, we have a frank discussion and tell them we need to either figure out an extra service we can provide them, or we’re going to need to cut back their monthly payment.”
BlueWave finds that not only does this approach force it to constantly look for ways to find new services to offer its customers, it also goes a long way to boosting customer satisfaction. “It all boils down to gaining trust with new customers early on,” says Vojtasko. “Once they learn that we’re not going to let them overspend or make bad IT decisions, we become their trusted advisor.” How does BlueWave know that it’s achieved this coveted status? Measurable results. Twice a year, the MSP conducts a net promoter survey (NPS), asking its customers one question: “How likely on a scale from 0 to 10 are you to recommend BlueWave Computing to a friend or colleague?” IT service providers as a whole average around 37%, according to Vojtasko. “BlueWave averages in the 70% range, comparable to Apple’s NPS score,” he says.
If those stats aren’t enough to give this MSP’s strategy serious consideration for your practice, perhaps this will: BlueWave Computing’s 2012 sales growth rate was 40% over 2011. And, this year, the MSP is projecting to increase its revenue 35% over 2012. For more tips from BlueWave Computing on this topic, check out “Keep Your Managed Services Customers From Reverting To Break-Fix.“