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3 Ways Successful MSPs Avoid Selling ‘Just’ Storage

There are minimum margins to be earned selling storage and that’s not going to change any time soon. Instead of fighting the inevitable, savvy service providers are taking a different approach – removing storage as a standalone item on their line cards, and adopting the following best practices.

In order to address the myriad IT challenges and industry regulations facing their customers, many IT service providers (ITSPs) segment their business offerings, which enable engineers and salespeople to develop expertise in niche verticals and technologies. While this practice can be very effective at addressing many challenges, it can also undermine the value of selling bundled solutions. Nowhere is this problem more evident that when it comes to selling storage.

There are minimum margins to be earned selling storage and that’s not going to change any time soon. Instead of fighting the inevitable, savvy service providers are taking a different approach – removing storage as a standalone item on their line cards, and adopting the following best practices. 

1) Sell Business Preparedness Services

Last month was National Preparedness Month (NPM), which is a special annual event designated by FEMA and its advertising arm Ready.gov to educate companies (especially SMBs) about the importance of protecting themselves from all sorts of worst-case scenarios. The site includes a five-step preparedness program that can be easily adapted to an IT service provider’s business model, and it’s appropriate for customers in every vertical market.

Why is selling business preparedness preferable to selling storage? Because it forces the business discussion away from bits, bytes, and cost-per-gigabyte, and onto more meaningful business topics such as the value of the customer’s data and the cost of downtime.

As the Ready website confirms, there are serious repercussions for your customers if they’re caught off guard by a disaster. Providing consulting services, including developing preparedness policies and procedures, plus providing IT hardware and software solutions (including backup and disaster recovery solutions) is a valuable offering and one that’s very different from what a freemium cloud vendor has to offer.

2) Sell Business Continuity Services

Many SMBs have learned the hard way that there is a big difference between storing data and recovering it. While the former costs almost nothing, the latter is where the real value is for the customer, and where MSPs should be focusing their attention. Equally important to selling business preparedness services is selling a BCDR (business continuity and disaster recovery) plan, which should include a corresponding SLA (service level agreement) that defines contractually what the MSP agrees to provide before, during, and after a disruptive incident. A proper SLA should address the following three areas:

  1. RTO (recovery time objective) – This is how long the client can be without certain data/IT services before experiencing negative effects. Depending on the client, RTO could be measured in minutes, hours, or days.
  2. RPO (recovery point objective) – This is complementary to RTO and refers to the specific amount of data than can be lost during the RTO period before experiencing negative effects. For example, a company could experience a server crash that could be corrected in 15 minutes (an acceptable RTO), but it could lose two days’ worth of data during that 15-minute outage (an unacceptable RPO).
  3. RGO (recovery granularity objective) – As its name suggests, an RGO defines how granular within the storage architecture recovery needs to be, including file level, block level, or transaction level. Each client’s specific need will determine whether VTLs (virtual tape libraries), snapshots, or CDP (continuous data protection) is required to log each individual change.

3) Bundle Storage With Managed Services

One of the biggest sales challenges MSPs face is walking the fine line between being flexible and being firm. The former entails being accommodating, whereas the latter usually entails telling a customer ‘No.’

The most successful MSPs offer various bundled solutions, which typically include BDR, email archiving, spam filtering, and AV. Sometimes a customer will try to test the waters and convince the MSP to “itemize” its offering, so the customer can pick and choose particular components. For example, a customer may say, ‘I’ll go with your email archiving and filtering, but I just want the local backup part of your BDR, and we want to use our own AV solution.’ If you don’t learn how to overcome these objections, you’ll find they always come back to haunt you later – if not in the form of diminished profit margins, then something equally distressing. A customer that’s granted an exception on its AV, for example, may forget to renew the AV licenses it wanted to manage itself and pick up a virus that causes all sorts of problems that they will then expect your company to fix at no extra charge.

No IT service provider wants to hear: ‘Are you saying that you don’t want our business?’ When that occurs response such as this can be effective at explaining your reason for the stipulation: ‘Yes, we want your business, but if you don’t purchase our complete solution, you’re not going to get what you need, and we won’t be able to monitor and service you as effectively.’ Not every client comes back after you tell them ‘No’ to their request. But, if you help them realize that you’re making a decision that’s in their best interest, it will work out in your favor more often than not. And, for those that still don’t want to work with you, chances are that you would have butted heads with them on other issues as well.

Rob Merklinger is vice president of sales at Intronis, Boston-based provider of world-class backup and data protection solutions for the IT channel, and is an experienced software sales leader with a proven track record for driving success and developing sales talent.

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