Is it time to rethink all-you-can-eat contracts?
There was a time when MSPs offered “all you can eat” managed services contracts; a never-ending supply of managed services designed to encourage customers to sign up and gorge on proactive IT services. But, have we move beyond an era where customers can dine on a managed services buffet with unlimited boundaries?
Some MSPs have put aside unlimited managed services agreements and found immense profit in well-defined contracts with limits. Here are some common ideas associated with all you can eat managed services contracts.
Appeal to Customers
Early-stage MSPs used all you can eat contracts as a means to recruit customers. Few MSPs could compete with an all you can eat offering designed to entice customers unaware of how managed services works.
Ease of Delivery
If transitioning from break/fix to managed services was difficult, all you can eat service contracts made the change much easier. For IT companies challenged with how to create a managed services offering, unlimited IT services is an easy decision to make.
For IT technicians confused about what managed services is all about, delivering an all you can eat services removes the complexity of creating service catalogs, SLAs, and multi-tiered managed services offerings.
Yesterday’s Simple is Today’s Risk
If all you can eat managed services was a useful introduction to proactive IT services, today, all you can eat could be very risky for the MSP. Unlimited IT services consumption can lead to bad margins and higher risk for the MSP. If left unchecked, an MSP offering unlimited services can inherit a lot of risk from the customer with insufficient revenue to offset that risk.
For any MSPs still offering all you can eat managed services, the time may have come for you to reconsider this option and turn to alternative service delivery plans better suited to handle risk and maximize profit.
MSPWorld will be featuring discussions on the topic of all you can eat managed services.