MSP Philosophy: Relationships Underpin IT
As co-founder and CEO of managed service provider IT4, over the last 20 years Brett Jaffe has grown his business from a hardware reseller and computer repair shop to a fully outsourced provider of IT services. The key to this long-term success is simple: relationships. Granted, this isn't a new concept. Visit any corporate web site and you'll find marketing blurbs touting devotion to customer relationships. But, there's a big gap between the saying and the doing. Day in and day out, it's tough to provide the service and attention that inspires customers to think of your company as more than just another vendor -- creating and fostering relationships have to be deeply rooted in the corporate culture.
Beyond Business Basics
Jaffe believes this is especially important in the MSP space where the basics just aren't enough anymore. "When you make sales calls, no one ever needs managed services; they already have them," Jaffe says. "It was different a few years ago when it was the new thing." Now, the problems that leave a potential customer open to talking to IT4 about its services rarely have anything to do with IT. "When we talk to potential clients, it's not that they're unhappy with their existing provider, exactly. It just seems that a lot of competitors look at this as a 'set-it-and-forget-it' business. Their customers don't feel like their MSP is taking an interest in how the business is doing, how they can do things better, how they can help grow the business and be more efficient."
IT4's approach is different. "We are very involved with our client's business. We sit in on strategy meetings, help with budget planning, and deliver educational seminars." He adds, "We're also getting into areas that are outside the scope of traditional managed services. That's made us really sticky with our client base."
Sometimes building good customer relationships means passing up the short-term dollar. You might know that a client is having a tough time in this economy. They need new server hardware, but the budget is tight right now. In some cases, it might be better to find a way to make it work in the interim and revisit the issue next year. Jaffe sums up: "It isn't always about selling something. It's about working with the customer, taking a vested interest in their company, and making sure the relationship works."
Partner Relationships Just As Valuable
Jaffe finds partner relationships just as important as customer relationships. "Over the past year, I've seen bigger vendors making direct plays for clients." This is one of the reasons Jaffe chose to partner with Zenith Infotech to handle some of its services, such as system monitoring, and backup and recovery. "Zenith doesn't sell to the end-user; it's strictly channel," he says. "There are other companies that are much harder to work with because, in a heartbeat, they'll go around you and try to sell services directly to your customer. Dealing with channel-only companies guarantees our place in the market."
Zenith's approach to customer relationships is similar to Jaffe's. "I've spent time in Zenith's main office, and every conversation was about what they could do better for the partners, and how they could help partners have more sources of revenue and larger profit margins. That seems to be a philosophy that is otherwise disappearing: Other companies will raise their prices or give you a smaller percentage. Zenith is adamant about giving you a high-value item at a reasonable cost so you can make some money." When asked about the similarity of Zenith's approach to his own, Jaffe responds, "I'm not surprised my relationship with my customer base mirrors my relationship with Zenith -- it's the way I like to do business."
Maintaining Customer Loyalty
Jaffe's approach is working. His clients are loyal, despite being wooed by competitors. "Many of our clients get two or three calls a day from competing companies, but we have almost a 0-percent attrition rate. I can count on one hand the number of clients we've lost in the last 10 years." Jaffe will continue to fight to inspire customer loyalty because he doesn't see competition from the big vendors going away. "I look at some of managed services as somewhat commodity-based. If you're just focusing on the plumbing portion of managed services, you're going to get buried because you can't compete on price. But, if your response time is there, you're delivering on the services you've promised, you're going above and beyond in terms of customer service, and you're talking with your clients on a business level and not just a technical level, those relationships will come through for you."
Posted by Christa Ayer on June 22, 2010 at 11:57 AM