26 Aug 3 Ways to Produce Revenue With Assessments
Increasing recurring revenue and winning new clients consistently is crucial to your success as an MSP. It can be daunting as you need to manage this in tandem with your current service obligations and client retention. You can avoid losing sleep by deploying the right strategies. One strategy is to leverage IT assessments to get new business, new projects, upsell new managed services and add new stand-alone services.
Use under-the-skin IT assessments to provide prospects with hard data about risks existing in their IT environments to justify the need for your help. Once you get this right, you’ll begin to see an uptick in your recurring revenue. Continue reading to learn more about the three ways to produce additional revenue with assessments.
Using an assessment to acquire a new client is effective because you can show your prospect facts about their IT environment the same way a doctor uses blood test results to show you a medical problem that needs attention. Your MSP peers use assessments regularly to edge out other MSPs, sell Co-Managed IT services and upsell existing customers.
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By using the results to prove to your prospects they have risks you can mitigate, you base your proposal for remediating risks and providing ongoing managed services on facts rather than assumptions or hyperbole.
You can successfully sell profitable assessments as stand-alone projects. All you need to do is readjust the small-business-owner mindset and start thinking differently. Governmental officials, school district administrators and executives at large businesses are used to paying big money for studies where the deliverable is a report that guides their decisions. You can charge a handsome amount for IT assessments and use the findings to sell remediation projects and managed services. Do this and watch your profit margins for assessments rise significantly.
To sell expensive assessment projects, you need to get clients to focus on the value of the information itself. Quantify risks and help them make decisions to prevent compliance violations as well as an expensive and embarrassing interruption of services.
A rural K-12 school district contacted an MSP over problems they were facing with technology. The school district superintendent said he was totally frustrated and needed help. During the initial meeting, the MSP asked several questions about the school’s IT problems, how the IT department was complying with FERPA (a law similar to HIPAA that protects student information), why they had been turned down for E-Rate funding (the MSP had checked it on the federal database) and other detailed questions about the IT environment. The superintendent had no answers.
After a few minutes, both parties realized neither of them had enough information. The superintendent couldn’t accurately define his problems and the MSP didn’t have enough to go by to give him a proposal for remediation. The MSP suggested an assessment to provide both of them with the information to know what needed to be done and how much had to be spent to fix the problems.
The MSP also highlighted the financial benefit in identifying the problems that led to the rejection of the district’s E-Rate funding application. This meant up to a million dollars in cost justification, which is why the MSP quoted $ 20,000 for the assessment and the superintendent immediately sealed the deal.
The MSP’s assessment was accurate and thorough. It identified cybersecurity and compliance issues and create a roadmap for the district to address its problems. Apart from the assessment report, the MSP provided a proposal for remediation services and ongoing managed services that resulted in more than $100,000 in projects and over $10,000 per month in recurring revenue. The district benefited by fixing its E-Rating problems and qualifying for over $1 million in federal subsidies.
Two nearby districts heard about the assessment and engaged the MSP to work with them. This added more than $70,000 in additional assessment revenue and almost a half-million dollars in projects for the MSP.
If a prospect can’t accurately define its problems and you don’t have enough information to build a proposal, suggest an assessment to identify the information needed to properly scope the project and estimate the cost correctly.
Small business owners don’t want to pay a lot for assessments, especially when MSPs often use free assessments as a marketing tool to acquire new clients. Approach government officials, school districts, larger private businesses and non-profits and offer thorough and accurate assessments they can use to make critical decisions. For public entities, you can even go through their previous records and board minutes to see what they have paid in the past.
One way to maximize profits from your investment in assessment tools is to offer independent assessments to businesses that have their own IT departments and won’t consider becoming a managed services client.
When you run assessments for many medium and large organizations that have their own IT departments, you find the IT staff is surprised at the detailed information you provide. They often don’t have the assessment tools nor the time to learn how to use them. Even if they could, many are bound by regulations and contractual obligations to have IT security validated by an independent assessment.
Take the opportunity to create a profitable service by going to hospitals, school districts, local and county governments, banks, non-profits and larger private businesses offering to provide their internal IT staff with monthly reports they can use to address cybersecurity and compliance gaps. The documentation will help them prepare for an unexpected audit, investigation or lawsuit. Remind them that you aren’t trying to replace anyone. You’re just trying to provide them with detailed reports they can use to stay secure and compliant.
Treat assessment tools just like the tools in your toolbox — the more you use them, the more value you get out of them. Think beyond using assessment tools solely as bait to get new clients. Sell assessments as projects and ongoing automated assessments as a stand-alone service.
Find out how Network Detective Pro can help you produce assessments to grow your bottom line. Sign up for a free demo now.