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A Guide to Selling Managed Services to SMBs

Jun 24, 2021

Providing proactive support to services clients is the easy part for many skilled IT professionals. However, while they may derive pleasure from modifying and adjusting the various technologies and monitoring everything to ensure end-users can remain productive 24/7, other activities often fall outside their comfort zones. 

Some of the responsibilities can be tedious or difficult for skilled technical professionals. Selling managed services isn’t a natural talent, as many of those who live and breathe IT struggle when it comes time to negotiate and close new business deals. That may help explain why a significant portion of MSPs run what some consider to be lifestyle businesses, small firms that typically work with a relatively small client base. What some think is easy, like setting appointments and conducting a sales presentation, others find difficult and off-putting. Avoiding all the activities involved with selling managed services makes work and life much simpler.

Other service providers choose a different path. Some view expansion as necessary, and selling managed services can quickly improve their profitability and cash flow. MSPs must put structure in their marketing and sales programs to accomplish those objectives, adopting proven business practices and building processes that fit their specific needs.      

Targeting SMB Clients

The objective of any B2B organization is to find a target market willing to pay a premium price for easy to deliver goods and services. On the other end of the equation, optimizing the workload minimizes the personnel requirements and maximizes the profit margins. Selling managed services to potential clients is a prime example of that philosophy.

According to the latest U.S. Small Business Administration report, there are approximately 31.7 million small businesses, which means 99.9% of all companies in this country have fewer than 500 employees. The global number approaches 400 million), though many countries use the SME (Small and Medium Enterprises) definition, which caps the staffing limit at 250 and represents 95% of the total firms and 60%-70% of worldwide employment.

Those statistics provide MSPs with a very strong business case for selling managed services to the SMB. Additionally, most small businesses have few, if any, IT experts on staff, which provides more support and financial opportunities for channel partners across the globe.

Selling managed services to the SMB is a symbiotic proposition. New customers gain the support of skilled IT professionals who can design, procure, implement, and support business-critical systems and solutions, while MSPs add MRR (Monthly Recurring Revenue) to their balance sheets. Those relationships also allow providers to leverage their resources across a greater number of vertical industries, maximizing employee productivity while optimizing various skill sets.   

No matter how large the contract, there is usually always money left on the table. Small businesses are no different than their bigger counterparts. Technology is an essential part of their operations today, and selling managed services to the SMB helps ensure everything runs smoothly.

Regardless of the company size, business leaders must deal with a litany of tech-related concerns, from cybersecurity and compliance requirements to virtual desktops and data backups. Even a two-employee startup needs functional computers and secure networks. Selling managed services to the SMB helps those organizations compete on an even playing field with larger and more well-funded competitors.   

These clients can also be easy for MSPs to onboard and manage. In addition, simplicity facilitates profitability, and implementing remote management and monitoring solutions, professional services automation platforms, and key business tool integrations can further increase efficiency. While these decision-makers typically have smaller budgets to work with, selling managed services to the SMB creates a win-win for the clients and the providers.    

This model can generate greater profits for both parties.

Selling the SMB on Managed Services

Nurturing prospective clients requires a long-term commitment. Selling managed services to SMBs can take time, and MSPs often focus much of their efforts on education, informing decision-makers of the business benefit that comes from proactive IT management.   

Despite the latest generations’ exposure to technology, many business owners and decision-makers know very little about the specific IT needs of their organizations. MSPs must be able to connect on a non-technical level when selling managed services to the SMB. Discussing business objectives, workflow challenges, common sales objections, regulatory controls and security concerns – without getting into the “speeds and feeds” of IT – keep clients and prospects engaged.

The more open the lines of communication, the easier selling managed services to the SMB will be for your team. Addressing non-IT-related anxieties such as compliance and workplace changes can drop their defenses and open the door for MSPs to soft-sell new solutions and justify paying more for upgrades to existing services.

Thanks to remote technologies, there are no geographic limits around this model, meaning there should never be a shortage of new opportunities for selling managed services to the SMB. MSPs can support clients down the block or on other continents with the right solutions and people in place. With the ability to leverage regional partners to deliver last-mile service when needed, providers can scale and expand their physical reach without limits today.

Selling managed services to the SMB in other geographies without local connections or area knowledge can be more difficult. Still, with the right partners, channel professionals, and technologies, it can be a lucrative opportunity. The key is building out a highly valued and easily manageable system.

Develop a High-Value Line Card

The key to selling managed services to the SMB is the MSP’s ability to address their pain points, including the issues that decision-makers may not know about or understand. Enabling remote workers with cost- and time-saving collaboration and communications tools is invaluable today. WFH and hybrid environments require new ideas and mindsets, as well as technologies that help business owners better manage those employees.

Cybersecurity is another high-demand offering when selling managed services to the SMB. Security solutions for protecting their data, people, systems, and client base are a priority for most organizations today, and MSPs that can confidently address and lessen those rising fears will be more likely to increase their sales and MRR.

Other high-value offerings include cloud storage service, advanced network support, and 24/7 helpdesk options. As more companies break out of the traditional office norms, including 8-5 schedules and the five-day onsite requirements, they need their IT professionals to be just as flexible. Selling managed services to the SMB today is much different from two years ago. Some things have changed a lot since the pandemic forced many organizations to reimagine their workplaces.     

Hire Professionals

While many MSPs may have a good understanding of the services market, the sales process can be somewhat of an albatross, and owners and technicians are probably not the best people for those sales conversations. Pitching a solutions portfolio to business professionals can be taxing to someone with little experience overcoming obscure objections or negotiating complicated deals within the sales process. That skill set can be acquired through persistence and practice – otherwise known as on-the-job training – or by hiring an experienced specialist.

Selling managed services to the SMB requires a certain knack and mindset. Those who take time to understand their current client base, potential customer’s pain points, business models, and workflows typically enjoy the most success, though listening and observing are just two of the necessary talents.

Among the other critical attributes is speaking to people like people, not CTOs or technicians. Selling managed services to the SMB requires MSPs to engage in meaningful conversations with business owners, accountants, lawyers, and others not trained in the intricacies of computer programming, network installation, or system management. The best way to close deals is to listen and address their specific needs and pain points.

Hiring professionals with experience selling managed services to businesses, particularly SMBs, is the ultimate goal. However, most MSPs cannot afford to poach great talent from their peers, so they typically recruit, onboard, and train those with good sales skills from complementary industries. Identifying those with a solid track record of closing large deals, preferably in the professional services space, should be an ongoing activity of every MSP.        

Most industry insiders suggest that it is easier to teach a great salesperson about technology than to train an IT professional to sell. Sales is an intuitive skill – the ability to engage prospects, provide a sales presentation, build rapport and gain their confidence, and close a deal − while MSPs can typically provide new employees with the IT knowledge they’ll need to succeed.

Build a Solid Game Plan for Selling Managed Services to the SMB

Creating long-term business relationships should be a top priority for MSPs. That’s why the strategy for selling managed services to the SMB must center on the pain points of prospective and current clients. However, identifying those concerns is just the first step. The questions MSPs need to ask when building out their game plans, and sales playbooks are actually quite simple:

  •       What issues do they need to address?  
  •       Which particular services are best for the MSP’s target audience?
  •       What are SMBs’ expectations?
  •       How much do a new prospect’s business practices and IT systems differ from their existing clients?

Focusing on each client is the key to selling managed services to the SMB.  Every email and call must address the prospect’s needs or build rapport. Some experts in the IT industry undervalue personalization, but in the small business arena, paying close attention to individual preferences and requirements can be the difference between making or losing a big sale.  

The best way to succeed at selling managed services to the SMB is by creating genuine bonds. Building solid relationships with the decision-makers and other influencers are critical to securing long-term contracts and growing new friendships.

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