Managed services: Seven steps to recurring revenue

Guests at CDN‘s annual Channel Elite Awards event on Tuesday were treated to a special presentation on the managed services market and ways to achieve recurring revenue.

Joe Panettieri, editorial director at Nine Lives Media Inc., led the seminar titled, “Managed services: Seven steps to recurring revenue.”

Managed services are finished IT solutions that are delivered to the customer and that are managed remotely by managed service providers, or MSPs. These services are typically charged based on a monthly fee with predictable IT costs.

Some examples of managed services categories are managed firewalls, content filtering, remote backup and storage, e-mail archiving, software-as-a-service (SaaS), hardware-as-a-service (HaaS) and disaster recovery. Working in the managed services field is a great way for channel partners to further diversify their revenue streams, Panettieri suggests. But partners should take note that these areas are not guaranteed money because, “nothing is recession proof.”

Businesses that are in the managed services market should first make sure they have a solid executive leadership and mission strategy in place.

“All you need is a mission to promote recurring revenue as the mission of the company,” Panettieri said. “Also, leave the office for monthly or quarterly face-to-face customer meetings.”

As the popular sales motto, “Always be closing” goes, Panettieri says especially in managed services, the rule is “Always be interviewing” to secure top talent.

Businesses, even if they’re not currently hiring, should always be looking for talent so that, in the event that human resources needs to hire someone quickly, they can because potential candidates have already been short-listed.

MSPs should also focus on building and branding their services, Panettieri suggests, advising that companies utilize things like professional services automation and remote monitoring and management tools to get organized.

Sales compensation plans should also be created to help motivate the company’s sales and technical staff. It’s also important to decide when an MSP should walk away and turn down business, Panettieri said.

“A lot of MSPs are doing this so they can build their recurring revenue,” he explained. “Are you willing to walk away from existing customers who won’t sign a managed services contract?

Panettieri also says MSPs should make sure every employee in the organization can deliver a consistent “elevator pitch” about what it is the company does and what it’s all about.

“Can everyone in your company say and talk about your business in the same way and say what makes your business different?” Panettieri said. “Get them to list things like benefits, predictable costs and services.”

When it comes to service level agreements (SLAs), Panettieri suggests that MSPs keep them vague.

“Give yourself some wiggle room,” he advises. “And if for some reason you don’t meet your SLA, get out in front of the customer and apologize face-to-face with them and be sincere.”

MSPs can also look to marketing, public relations and social media tools to further promote and brand their businesses.

“First, decide who will own your social media strategy and who will write your press releases,” Panettieri said.

It’s important that MSPs have their own Web site to include update, news and posts on, he added. Businesses should also sign up for a free blog site such as WordPress or Google. Panettieri suggests writing a press release on the company at least once a month, discussing new updates, hires, promotions or new service offerings.

“The more you update, the more your site gets indexed and moved up in the search rankings,” he said.

To increase online presence even more, businesses can also create accounts on social networking sites such as Facebook, Twitter and LinkedIn. One of the biggest benefits of having a business and brand presence online is that it creates free search engine optimization, Panettieri said.

To help facilitate audience participation on business blogs, Panettieri says MSPs need to keep the sites updated. Also, whenever a comment is posted on an entry, he suggests the writer of the post personally responds back to each comment that’s made to further the conversation and perhaps to spark new ones.

Another key point that Panettieri mentioned during his presentation was that MSPs can turn to their vendor partners for help too.

“Don’t lead with the vendor’s brand, but start with your own,” Panettieri said. “Also, vendors will often pay for videos on customer case studies and tools and solutions that you’re using of theirs. This is a good way for you to look really great in front of your customers.”

One of the biggest pieces of advice Panettieri gave was for MSPs to also trademark their services. If they don’t, he said they risk having their intellectual property “stolen” by someone else.

Key managed services categories doing well now include, e-mail, security, storage and voice-over-IP (VoIP). New areas that are emerging are telepresence, digital signage, unified communications and open source, to name a few.

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Maxine Cheung
Maxine Cheung
Staff Writer, Computer Dealer News

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