Well it has been three months since I first posted about losing a client do Dell managed services and I wanted to provide an update.
I wish I could tell you that the client has already returned to our service while sharing tales of Dells service follies. This unfortunately has not happened, yet, but I do believe there is a good lesson to share in this story and it is: LONG TERM CONTRACTS
Long term contracts may not seem that revolutionary but i would suggest if you have not moved to a two or three year contract on your services you are missing a big opportunity.
If you look around you will notice that most contracts being presented to prospects these days require a commitment of greater than a year allowing you to lock in the relationship and better predict attrition rates.
One of the easiest ways to do this is to provide hardware with your services. Prospects are use to the idea of a 36 month lease on equipment so when you tell them you will provide all your services and include X hardware if they sign a 3 year deal they don’t think twice about signing up. If you are not providing hardware with your services you need to look at both the Zenith BDR solution as well as the guys over at Chartec that allow you to do so with very little investment on your part.
So how does this all relate to the client Dell managed to coax away from our services? Well, the reality is that they are still our client and will be for the next 17 months. We had signed a 36 month agreement with them on part of our service and they they still look to us to provide this service today.
This is great from a few perspectives:
- they are still our client and we held on to over $12,000 in revenue
- the margin on providing a piece of service is often greater than being a complete IT team for a client – which it is in this case
- when the client is looking for something the new provider, Dell, does not provide or for a second opinion on something that has been recommended they still call me for advice – i spoke with the CEO not more than a week ago and guarantee i will be top of mind if and when they decide to change providers again!
So the silver lining to the Dell managed services story is that we did not actually lose the client, we only lost a piece of the revenue, and I look forward to the post telling you the client has come back to us.
Dust off your contracts and find a compelling way to make them 36 months!
Josh
