If you’re like me, you’re often evangelizing cool applications, services, and vendors to your clients. You have a cool feature on your Todo application, or you were able to integrate your CRM with LinkedIn, or you just collaborated with your team with an awesome project management tool. We spread the idea because we are advisors by nature. The question is how can we capitalize on this habit? How do we create service offerings around SaaS-based applications?
I hope you have read our monster blog article about the business model changes of the MSP. In this model there is an item called "Marketplace" in the partnership section, there are revenue streams called "Marketplace Commission" and "3rd Party project management," and there is an activity called "Resell Vendors, Applications."
The idea here is quite a common practice among IT managed services providers - finding a problem on the client side and helping them with an application. After deploying, manage the usage, subscription, and processes of the application. IT companies are mostly infrastructure providers, so they do these types of activities but in an ad-hoc way. What’s new here is the proactivity and a defined structure for these types of services.
PROBLEMS - VALUE PROPOSITION
Your clients have probably been using a lot of cloud-based applications for a while now. The average 20- to 50-seat company solves niche problems with niche applications. Some examples are sending bulk emails, using surveys on websites, organizing meetings and schedules, taking notes, sharing files, managing online marketing and sales activities, and automating processes.
The problems they have are the following:
- Finding out if there is an application for the specific problem (discovery services)
- Finding the right application for the problem (evaluation services)
- Buying the application or managing the procurement (negotiation services)
- Deploying the application to devices (deployment services)
- Creating the necessary processes (process management services)
- Integrating the application to other systems (integration services)
- Teaching the application to people (educational services)
- Supporting the application (support services)
- Managing the billing (vendor management services)
So, in a way they have the same problems they had in the good old days except they now with "technological" problems like installation, server setup, etc. We usually refer to this as an "IT management" problem. Usually clients simply swipe their cards to get access to applications in no time. They don’t know or understand that buying an application is only 10% of the entire process. It is easy to get onto this slippery slope. Users buy applications, then have problems, stop using them, and conclude the technology failed. The trick is education and storytelling.
My favorite story for this is Evernote's business-card-scanning feature. This is a nearly-free tool that can scan business cards, send LinkedIn invites on the spot, and then populate their CRM application with the contact data. I usually go through the process with clients/prospects and explain how it works and that it’s very affordable, because very few people use and leverage its true functionality. They just get it and use it, but the non-obvious features are going undiscovered. After this story, they understand what they are missing. This is a small reframing :-)
The value proposition here is to make your company more effective and vital by harnessing applications.
The delivery side is not rocket science, and very close to what traditional IT managed services providers are doing. However, to do it seriously, there are a couple things to think about:
Problem - Solution library:
Creating the problem library means you collect all the non-obvious problems you could solve with applications. Populating a CRM with Evernote’s business-cards-scanning feature is not an easy one to realize; it might be connected to a CRM through Zapier's integration feature.
You should create a knowledge base of the different business pains of CEOs and package your solutions for that. I bet you have a couple of geeks in the team who know every cool and popular service and app around.
There are also ready sales in managing people, meetings, delegating tasks, managing calendars, personal effectivity tools with the integration of mobile devices. Here, you could offer a bundled solution with to-do applications and shared project management tools, etc.
To make the process happen, you need to use a cloud-based integrator platform like Zapier to connect Evernote and the CRM application. It’s a pretty neat tool - you just drag and drop the two applications you want to connect, select your triggers and actions and you’re ready to go.
Most of these applications have a partner model. That means if you sell them, you receive a commission. The best win-win way to use it is to share this commission with the client. In this case you remain independent, while still getting the client to choose your recommended provider - they enjoy the benefits of a discount and trust of your partners.
Pricing and packaging
There are many options here, but sooner or later you are going to shift to the managed model, which is very clear and easy to enroll.
Just think about it—they want to buy this service for the same reason they would want to buy a cloud based-application: as a service with a monthly flat fee, a package of their choice, and within their budget.
This is a flat fee based on application per user. You could use Light, Medium, and Pro classifications based on the difficulty of the application. For example, a ToDo app is classified as a Light app while an Online Marketing Tool is classified as a Pro app.
Then, you need to categorize your services, for example into Silver, Gold, and Platinum. The Silver covers basic services, but the Platinum includes integration with five other applications. A must-have is the hard edged definitions of the service, clearly stating what is included and what is extra. This is critical to smart delivery of the service.
At the end you are going to get a decent sized spreadsheet with all the applications and all the packages. The big idea is to aim at managing all their applications, so consider a quantity discount.
Of course, for bigger projects like a CRM or Accounting Package, you could always use the "3rd-party project management" method to monetize on the evaluation and implementation after the application of a flat fee. These are not just "apps"; these are serious business applications.
There are huge opportunities in the application world because even when there are no technical problems it doesn’t mean MSPs have nothing to do. There is plenty of work that can propel the success of our clients but they aren’t aware of it...the apps come from the cloud, so they must be ready to go with no more concern.
Teach your clients to build their own marketplace, deliver services, and create more recurring services!