21 April 2019

5 client interest tests: Rate your MSP

5 client interest tests: Rate your MSP

How can you tell if your MSP is acting in your best interests?

Here are five simple tests to check if you and your managed service provider are pulling in different directions.

While even the strongest of professional partnerships can come under strain, most managed service providers (MSPs) genuinely want to do what’s best for their customers. But there’s a catch. Some MSP business models can put them at odds with client expectations.

To put your MSP to the test, consider the following best-practice scenarios – and decide for yourself.

Service levels: is there a penalty clause?

Many MSPs claim to provide “world-class” customer service and IT support. One easy way to fact-check this statement is to confirm if they have a penalty clause in their support agreements.

A penalty clause means that if the MSP does not deliver what they promise, they are subject to certain legal consequences. This clause demonstrates that your MSP has some skin in the game – they’re not just talk.

In addition to measuring response times and outcomes in real-time, a great MSP will also report on their customer satisfaction statistics.

Standardisation: are your needs being addressed?

Using a standard set of processes and systems within an individual organisation can provide clear benefits . MSPs also benefit from standardisation because it simplifies support and reduces service costs.

But when MSPs attempt to standardise the solutions used across their entire customer base, problems can emerge for their clients. By restricting services to a specific set of vendors and technologies, the MSP can streamline service delivery, but at the risk of ignoring the needs of individual organisations.

If your MSP suggests ‘everyone’ uses similar infrastructure, tools or applications, it pays to ask why.

Commitments: fixed-term or zero-lock-in contracts?

Agreements with MSP’s will often involve unavoidable fixed terms due to vendor pricing requirements e.g., for the supply of a WAN. But that isn’t always the case when it comes to an MSP’s own services.

A typical 3-year agreement gives an MSP stability, as if they meet their contractual requirements, they will likely retain the client for the agreed term. While the client can benefit from predictable costs for a set of services over a given period. The downside of a fixed-term agreement is if the relationship fails, the client can face the choice between a significant break fee or accepting a less than satisfactory service for the remainder of the contract.

‘No lock-in’ contracts typically involve a month-by-month agreement that features a short notice period to enable the transition from one provider to another, with a relatively low, if any, break fee.

Because the client has few barriers to leave, it puts the onus on the MSP to ensure they are aligned with their client’s expectations and they deliver a service that produces consistently high customer satisfaction, with ongoing value to the client’s organisation.

Sales: Commission or No Commission?

There are two types of IT salespeople; those who earn commission and those who don’t. Popular best-practice compensation models for MSPs require the salesperson to hit a target before receiving a commission. The alternative model is to employ Service Delivery Managers or Technical Account Managers who earn fixed salaries and receive incentives based on client retention.

In a trusted partnership, you have the right to know what incentives are at play.

One easy way to figure out which of the two sales models you are dealing with is to ask whether your MSP’s sales and account managers are on commission.

Another strategy is to ask what percentage of the MSP’s revenue comprises product sales. If product sales make up more than 25% of revenue, you are likely dealing with commissioned reps.

Fixed-price services: do they work for the MSP and the client?

Fixed-price agreements are the basis of managed support. They enable predictable expenditure for clients and offer the IT service provider guaranteed revenue to invest in their support services.

If your MSP regularly wants to increase the monthly rate due to extra support time without addressing any underlying issues, that’s a red flag. It could mean that the MSP is charging a higher rate without taking steps to resolve issues before they become larger – essentially passing their risk onto you and charging for the opportunity.

Fairness is the key to the customer interest test

Managed service providers intent on building lasting relationships always operate on a principle of fairness. Fairness includes clients having a say in their technology, ensuring agreements balance the benefits for both sides, and providing non-commissioned, vendor-agnostic sales advice.