5 Profitable Reasons To Package Your Services
Packaging services is certainly not a new concept, but it is an idea whose time has come.
Your customers are looking at IT outsourcing from a new perspective. Hardware is no longer a barrier between them and solving their business problems. Technology projects don't seem quite so daunting to take on. Customers want simple-to-purchase, simple-to-execute solutions.
Shrinking Margins, Growing Commoditization
From the technology provider's perspective, margins on software and hardware are drying up and discount cloud providers are transforming desktop services into a commodity. Competing on price is a losing proposition for all but the largest of partners.
Packaged services play well into all of these trends. The primary purpose is to clearly define a set of value-add services that will solve a common business problem for your customer set.
The definition and application of packaged services vary from partner to partner. Some publish pricing for a very well-defined set of service deliverables. A good example from PremierPoint Solutions is "Zero to SharePoint Portal in 20 days." Others take an outcome-based approach, defining the business functions and benefits that a customer will get from the package. An example is from Palmetto Technology Group's "Dental IT Support."
Packaging Helps Customers Justify Investment
Packaging services simplify the buying and delivery process to make the value of IT services easier to understand and justify -- for managed service providers (MSP) to build vertical differentiation in an increasingly commoditized market, for Microsoft Dynamics partners to get their foot in the door without customers risking a full-blown enterprise resource planning (ERP) implementation, for system integrators to offer bite-sized service introductions, like business intelligence to appeal to mid-market companies.
MSPs have long known the relationship-building value of packaged services. Get commitment from the customer for a regular service and then build trust to expand the service footprint. All types of partners who historically worked on a project basis can apply these lessons to make the transition to the cloud smoother.
Impact on Profits
The bottom line, of course, is profitability. Do packaged services really deliver increased profits? There is clearly a time commitment to develop and market packaged services. To really impact the business, the packages should be strategic, supporting the long-term vision for the company's direction.
There are certainly more, but following are five ways that packaged services deserve your consideration and time:
- They demonstrate vertical expertise to help you build visibility in your target industries.
- They change the conversation to outcomes, not products, to help you connect with business decision-makers instead of relying exclusively on IT buyers.
- Operational efficiency in service delivery comes through consultants performing the same tasks and training for multiple customers. In vertical markets, support costs come down with common issue solutions learned through experience.
- Repeatable cloud packages mean that you can take advantage of volume discounts with cloud vendors to reduce your cost per customer.
- Packaged services limits risk with customers that are not a good fit for your business. Identify a dysfunctional or financially unstable company before you take on a big project.
However you choose to approach it, developing a set of service packages will help you meet the changing nature of our industry. Success belongs to the specialists who demonstrate the value of their expertise to customers. Packaged services show customers that you understand their challenges and are prepared to deliver the solution.
How are you positioning services differently? Add a comment below or send me a note and let's share your story.
Posted by Barb Levisay on February 05, 2014 at 3:24 PM