(Editor’s note: contributed blogs like this are part of ChannelBuzz.ca’s annual sponsorship program. Find out more here. This article was authored by Alex Hoff, vice president of product management at Auvik Networks.)
If it ain’t broke, don’t fix it. Isn’t that what people always say? But when it comes to providing network and IT support, it’s an approach that could be killing your business.
IT infrastructure isn’t something you buy once and rarely need to service. It’s a resource that requires constant expert care to be effective. (You know this.) So the break-fix model — having your clients waiting for something to break, then calling you to fix it — hurts both your business and theirs.
Break-fix hurts your IT services business
Break-fix services can seem like an easy sell. But that account win now could cost you dearly in the long run. Let’s look at just five of the many reasons why.
- Break-fix hurts your reputation with clients. If the only time a client calls you is when something goes wrong, they start to associate you with bad things. Potentially expensive things. Do you want clients to dread talking to you or to consider you a valued partner?
- Break-fix hurts the network’s reputation. If you’re not able to monitor the network and complete preventative maintenance, the network’s performance can become spotty and unreliable. Guess who’s considered guilty by association for that?
- Break-fix creates inconsistent revenue streams. Getting paid by the hour or the incident when something goes wrong means you never know how much money you’ll make from month to month. It also means that a great month for you (lots of revenue) is a terrible month for your clients (lots of problems). Ugh.
- Break-fix keeps you scrambling. You never know when a call or ticket will come in, but when it does, you’ve got to hop. That could mean paying techs premium rates to work odd hours. At the very least, it means constantly racing against the clock to find problems and get rid of them. That’s stressful and inefficient.
- Break-fix can jeopardize your relationships with managed services clients. Do you have some clients on a monthly retainer and some on break-fix? You could be shortchanging your best business. Guy Baroan, president of Baroan Technologies, describes the situation perfectly:
“Suppose you’ve got clients that are on your managed service program and are buying everything you’re selling and are really happy. Then imagine you’ve got someone who’s calling you and keeping you on the phone for four hours troubleshooting a problem because they didn’t clean up their viruses or malware. That’s time you should be either saving or spending on the clients that are really buying into your solutions. You just really can’t have these break-fix clients.
Your managed service clients deserve your attention. … You can jeopardize the relationship you have with your best clients if you can’t help them because you’re focused on emergencies for break-fix clients. It just doesn’t make sense.”
Break-fix hurts your clients too
So maybe break-fix isn’t the best business model for you. But hey, it works for clients, right? I mean, that’s why they buy the service.
Nope. Most break-fix clients think that paying only for actual problems saves them money. But that’s not true. Break-fix tends to cost more than managed services over time, in multiple ways.
- Break-fix hurts client productivity. By the time a client calls you with a problem, their productivity is already plummeting. So apart from the hard cost of fixing the incident, the client also loses money through downtime. (The actual fixing of a network problem is only 12% of the total cost, research from Infonetics shows. The rest is lost productivity.)
- Break-fix can mean clients accept subpar network performance. When a client knows it’s going to cost money every time they contact you, they tend to start tolerating “minor” annoyances and hiccups. Over time, those little performance issues become a fact of life, continually chipping away at their productivity. Again, lost money.
- Break-fix means disaster is more likely to strike. Iceberg dead ahead! Warnings are of no use unless someone pays attention to them. Putting off regular maintenance, such as checking backups or monitoring activity on the firewall, creates ripe conditions for disastrous events that could be avoided. Disasters are costly to address—and did we mention downtime?
- Break-fix can multiply client problems. Reactive fixes can easily become bandaid solutions that don’t address bigger underlying issues—or actually make them worse. As IT blogger MJ Shoer points out, by resolving one problem with break-fix tech support, clients can actually create other serious issues that cost money for months to come.
- Break-fix creates expense spikes. A reactive service model is an unreliable revenue stream for you. The flip side is that clients can face huge unexpected bills at any time. In addition to paying for problems to go away, clients may also need to make sudden outlays for new gear that’s gone out-of-date with no one noticing.
How to break clients of the break-fix habit
Clearly managed services are in the best interests of both you and your clients. Still, many of your break-fix clients may be reluctant to move to a monthly fee with constant, proactive support. If that’s the case, here are some tips for breaking them of their break-fix habit.
- Transition clients slowly. If a complete managed service gives your clients sticker shock, ease them into it. Start with a single service for which they pay monthly, like backup or antivirus protection. Educate them on the value they’re receiving for those services—perhaps you can point to a reduction in the quantity or severity of incidents they’re calling you for. Use that as a foot in the door to keep adding other monthly services until they’re fully managed.
- Raise your prices on break-fix services. This will be a hard pill for your clients to swallow and maybe for you too. But the truth is that unless a client is willing to pay especially high break-fix fees, it’s probably not worth it for you to keep them. Reactive services diminish the profitability of your company across the board and jeopardize your relationships with other clients. Since you may lose a client or two along the way, roll out the price increases to a few clients at a time and make sure you have some extra funds on hand to cover any short-term revenue gaps.
- Don’t lock clients into fixed-term contracts. Let managed service clients go month to month, rather than forcing them into a commitment. Making the switch to a monthly bill can seem scary for a company used to break-fix invoices. You’ll only compound that fear with multi-year contracts. Sean Vojtasko, executive VP at BlueWave Computing, swears by this month-to-month strategy as a way to acquire—and keep—happy customers.
- Educate your break-fix clients. Talk to them about the hidden costs of reactive problem-solving. They may not realize the true price they’re paying. Explain how proactive monitoring, planning, and maintenance can keep their businesses running smoothly more of the time. Point out how ongoing service means they can consult with you on-demand instead of only in emergencies.
It won’t be easy, but transitioning away from break-fix services could make a world of difference to the success of your business. And if anyone ever asks, Why fix what ain’t broke?, you’ve got a ready answer: An ounce of prevention is worth a pound of cure.