Unclear Contracts Irritate Clients
An MSP business is going to go through a lot of changes throughout its operational cycle. There are going to be times of profit and loss; times of growth and times of recession. You’re not likely to get a good idea of your company’s success by looking at one month’s operational fluctuation. You likely won’t get an accurate idea by looking at an entire year’s egress. But over several years, you can see whether or not a trend of steady growth is being offset by a trend of steady loss.
One way to facilitate growth and diminish loss is to maintain consistency. It’s impossible to maintain total consistency— sometimes you’ve got to make a change. But if and when you make a change, do it in a black and white way, don’t be gray about it. Be hot, be cold— but don’t be lukewarm. What good is lukewarm water? It’s not refreshing, you can’t make tea, coffee, or stew out of it— it’s good for nothing. So if you make a supposed transition but don’t actually fully adopt the new policies, you’re going to come across to clients as lukewarm. Take break/fix models of service delivery as opposed to flat-fee models as an example.
The Time of Changes
Many MSP business owners eventually reach a stage where it becomes more profitable to utilize a flat-fee model than a break-fix one. But the transition itself is mired in bureaucracy, and this is specifically reflected in contracts. Sometimes, a contract after a change from the break-fix solution will have language that indicates certain service functions aren’t covered under the flat-rate model.
Now, this is going to be confusing to clients, especially as those sections not covered by flat-fee support will be more likely for clients to require help with. Consider obsolescence. Technology doubles on itself every 18 months. Within several years of purchase, a system will be outdated. Think of this like a 100,000-mile warranty on a car— after that distance, most warranties no longer apply. Well, it’s very likely certain MSPs will have contracts that are designed to be flat-rate, but in reality, have restrictions on covered service delivery. When your clients come up against this issue, they’re likely going to think it stinks.
Avoiding Unnecessary Complication
Something else to consider is the complication which ensues from a service contract that isn’t hot or cold; that isn’t one thing or another. You’ve got to have a lot of fine print and you’re likely going to need some legal assistance to ensure you’ve got everything worded and presented correctly.
Next, even if you’ve used careful strategy to design such an amphibious contract, how will you know what to charge for certain services? When will you charge clients, when will the services delivered be “on you,” as it were? Here’s the truth: if you’ve got a skilled enough attorney, you can design a contract that looks ironclad, but in reality says nothing one way or another. This may seem like a money-maker, but it’s just going to irritate clients, spread a bad story about you by word of mouth, and irritate in-house employees because there’s no consistency. Consistency is a vital quotient of daily life and social interaction; it should go without saying that this attribute must characterize your MSP’s operations as well.
So, to wrap it all up, the negatives of a nebulous model include:
- Unnecessary complication
- Displeased clientele
- Bad word-of-mouth
An MSP operation that is needlessly complicated, inconsistent, displeasing, and silhouetted in bad reports from those to whom the MSP is designed to serve is an MSP that will experience losses. You need to reconcile your MSP operation so that it is either break-fix or flat-rate. Flat-rate is to be recommended as you reach a sort of “cruising altitude” with clients, they are more pleased with your services, and— to use a colloquialism— everybody wins.
If it’s time for you MSP business to make an upgrade, ensure you’ve got consistent contracts ensuring requisite service support transparently. Your client should have the fewest possible number of unexpected costs associated with your MSP. Provide excellent service and see real growth.