MSPs and the ‘frees service model’- Will it work?

Excerpts from Paul Barnett and Sam Guttmann’s blogs on MSP Mentor


Should the MSPs be giving away stuff for free like Skype, Pandora and several others in hopes of milking a fatter cow? The answer might not seem straight forward at first, but a deep dive clearly tells us this: The cost of manufacturing software is largely insignificant and a chunk of the revenue coming in post sales when customers want to upgrade and purchase ‘enhanced’ features. With MSPs that is not largely the case. There is a great deal of time, effort and money involved in dishing out superior service delivery 24/7. And in most cases some dollar number needs to be attributed to provisioning a service. So, this can be greatly attributed to the service nature of the business. Limited product offerings actually entice customers but limited service offerings will repulse. Case and point.


The next logical question then should be: What can MSPs do to attract more business and better customers. Well, one good thing is the incentive based model. Records indicate that this has surely worked for most MSPs and has helped to grow business without compromising ROI or revenue. An incentive model offers optimum availability of resources, creating a stronger bond with the customer and in some ways differentiating from competition.


Another thing to keep in mind: Signing up the right customers. Don’t try and be everything to every customer. Build world class service delivery to keep up with targeted needs and create a repeatable/predictable process. So figure you target market and tune your service offerings to that niche. And what will really differentiate your company? Superior service delivery with world-class technology and communicating the value of it to the customer with an impact.