Attention managed service providers: One of the most damaging statements every made in the history of business is:

“The customer is always right.”

Why is this one of the most damaging statements ever? Because too many people take that statement and expand it in their minds until they think that they have to do anything and everything for every customer.

Not all customers are created equal!

We’ve all had customers that want everything in the world, but don’t want to pay for it. We’ve also all had customers that won’t actually listen to our advice, then get upset when they haven’t had their problems solved.

These customers are called Killer Customers, and you need to learn to identify them and deal with them appropriately, or they will suck the life out of your business.

This idea – that I could run my business without bowing down to every demand of every customer – was a revelation to me. I first grasped the concept when I read the book Killer Customers: Tell the Good from the Bad–and Dominate Your Competitors . It’s a great book; you should add it to your business library.

The point of the book is that you should get really good at telling the good customers from the killer customers, and then ditch the killer customers so your competition can have them and get bled to death (that may not be how the author would summarize it!).

How to segment

In my experience, the keys to customer segmentation are the following:

1. Know your target customer very well
2. Train your salesforce to find target customers and provide incentive to make sure they don’t sign killer customers

You will not turn a bad prospect into a good customer!!! It doesn’t matter how big the deal is or what the prospect tells you about how the relationship will be after you have signed a deal- it won’t turn into a good customer. You must make sure that you don’t bother bringing the wrong customer into your portfolio of business. The sale won’t stick and neither will the commission – it’s a waste of time for everyone involved.

1. Have a process for continuously reviewing your customers to weed out the killer customers that you accidentally let on board
2. Have enough service offerings to match the various needs of your clients’ desired service levels

Doing any one of these things will help you out a lot, but doing all four will result in increased profits, happy customers, and happy employees – a combination that’s hard to beat.

MRC

Always remember that.

This is a saying we use at Everon when building and running our managed services business, and it has served us very well.

There are two realities in the managed services industry:

1. You are in the PEOPLE business
2. Just about everything you do for your clients is done by people

Both of these realities seem obvious and just common sense but they are often forgotten or neglected so they’re important to address.

People are first, technology comes second.

Reality 1: You are in the PEOPLE business

This means that we expect our engineers to solve the people problems related to the service just as much as they are expected to solve the technology problems. We’ve found that when we’ve hired very tech gifted people they can solve tech problems easily but they don’t necessarily have the best people skills. Though they can solve the technology problems, they leave the clients feeling like the service was only so-so and that they weren’t really taken care of.

We’ve found that we have to hire people with great interpersonal skills first. The tech skills, though obviously important, are secondary. Our philosophy is that we can teach the tech skills but it’s much harder to teach the interpersonal skills. We look for people with the right personality, the right people skills and then we tech the tech skills.

Reality 2: Just about everything you do for your clients is done by people

Since the managed service industry started, there’s been lot of focus on tools that deliver these services. These tools are very important and have taken this industry far in terms of automating some things. However, the reality is that the far majority of services are still performed with some sort of people interaction. You must make sure that the people delivering these services are equipped to do so and are happy to provide those services.

There’s a saying that if you want to deliver great service, you have to have happy people delivering the service. Do they like taking care of customers? Do they like delivering the services? Do they feel like the company they work for cares about them and creates a positive environment for them? We at Everon put a lot of focus on having happy people that will deliver great services.

MRC

As all MSPs know, finding new managed services clients can be a challenging prospect so you want to hold on to the ones you have. Unfortunately, some MSPs risk losing their hard-won new clients by overlooking the importance of their first interactions with them.

With a systematic “onboarding” process for your new clients, you can build the foundation for a productive long-term relationship and increase client retention dramatically. A successful onboarding process must be scalable, repeatable, and measurable and be designed to “wow” your clients as you become an indispensable resource to their business.

We call it “establishing first position” and it is a philosophy that should drive your entire client lifecycle roadmap, including onboarding. Essentially, you should strive to ensure that any time the client is facing a technology issue or any major business decision that might affect technology, he always seeks your counsel first.

To achieve this position with clients, you must lay the right groundwork. An onboarding process that focuses on the first 90 days of a client relationship can help you get there.

To help, we’re providing a free guide on how to implement a successful onboarding process at your company.  Click here for this FREE guide from MSP Coach.

MRC

This is a very simple but incredibly important principle. We have a saying at Everon that if anything that uses electricity doesn’t work at a managed services client’s business, we want them to call us first. You have to create and implement processes that guarantee you will gain and hold first position.

We want them to think of us first. If they have a question about something technical, if they want research about something technical, whatever it is, we want them to think of their managed service provider first. That’s what we mean by “first position” with clients.

Now, that’s easier said than done. If you’re lucky, you have someone who has such great relationships with clients that the clients call them whenever they need something. That’s security for your business. That protects your business from competition. If clients think to call you first when they think about technology, it doesn’t open the door for them to think of other companies.

You can’t leave this to chance. Some people are better at this than others.

If you have five account managers, each managing multiple clients, you can’t expect that all of them will be excellent at gaining first position with clients.

Such processes could include things like:

• Quarterly business reviews with clients to discuss their business needs and how technology can meet them
• Occasional check in calls with a specific purpose
• Newsletter articles written by account managers/others in your company that make them look like technology experts

Design and implement a clear process that has all of your key employee/client contacts doing these things.

Don’t leave them to chance.

MRC

I frequently talk to managed service provider owners who want to rush into flat fee offerings. Everon is using flat fee service offerings and I obviously believe in this approach but I also believe that they can kill your business if you’re not prepared.

If you offer flat fee service offerings but don’t have processes to support them, you’ll be in real trouble very quickly.

If you offer desktop support on a flat fee basis, your clients will be able to call you any time they need you. If you’re still operating on an hourly service model basis, going out to client sites and answering service calls on your cell while on the road, you’ll never make it.

If you’re moving to a flat fee model, create service processes that are:

• Scalable – You have to scale up in a way that keeps your costs in alignment.

• Automated – Automate as much as possible.  Take advantage of the tools in the market.

• Easily taught and repeatable – Your processes that aren’t automated should be easily taught and repeated. This is essential as your company grows and you hire new people.

• Consistent in cost – If you’re offering a flat fee service, you need to know that your margins are pretty secure across clients. There will be outliers but, as much as possible, you want your service to minimize these differences.

• Well documented - – I can’t stress what an advantage it has been internally at Everon to have our processes documented so that employees can refer to documentation to know what to do. When we got started, we hired process experts who documented our key sales and service processes. This got us off to a good start and eventually we developed our own internal skill sets so we document our own now. The clear documentation of what we do is vital for making sure everyone in our organization understands and follows the optimal approach.

Have a “process process” – seriously! If you have a process for creating your processes that your people can easily follow, they will start creating and documenting clear processes on their own.

To help you develop and document strong processes, buy and read this now: Emyth Mastery by Michael Gerber. This is a great resource that discusses how to document and execute all of the major processes that companies should have.

Get a copy today and apply it!

MRC