Barracuda MSP identifies three warning signs early in a client relationship, which indicate it may be time to cut bait.
No MSP likes to lose a client. Acquiring clients is hard work and expensive, so it’s usually in your best interest to do whatever it takes to avoid parting ways if a client relationship doesn’t work out as expected. But, once in a while MSPs have to face the uncomfortable decision of whether to fire a client.
This is generally an avoidable situation. The trick is to look for warning signs early in the relationship, preferably during contract negotiations. Learn to spot trouble signs, and you’ll be less likely to get stuck with a client that demands too much of your time, constantly complains their systems don’t work properly, ignores your advice, and pays late.
So if you come across the following warning signs, consider walking away before putting more time and effort into the process:
- Unreasonable requests
You can tell a lot about how a client is going to behave in the long run by how they negotiate. During the get-to-know you phase is when MSPs need to set expectations, going over your obligations and the client’s as you put together a services contract and SLA.
If the client starts to make unreasonable demands or insists on too many changes to your standard agreement, take that as a sign of things to come. It’s no secret that every client requires some customization, but most repeatable processes are applicable from one client to another. For instance, if a client insists you use a different RMM or security platform from the one you currently use, you need to decide if that’s a reasonable request. In most cases it isn’t because adding a tool for a specific client raises your cost of doing business.
Negotiations are by nature adversarial, but people who negotiate in good faith usually can strike a deal. Intransigent negotiators, however, tend to make unreasonable clients.
- Ignored recommendations
Michael Mowder, Senior Director of Partner Success and Services for Barracuda MSP
Until you take a close look at it, you won’t really know the state of a client’s IT environment. MSPs usually accomplish this with a thorough assessment of each prospect’s environment, looking at every system, application, and piece of infrastructure. No onboarding process should overlook this critical step.
Knowing the client’s environment allows you to better prepare to serve the client, make upgrades, and update recommendations wherever needed. Recommendations may involve a new business application, a network upgrade, new security tools, or the replacement of failing equipment. A client that ignores your recommendations is going to be a problem client. So you need to be ready for the frustration this will likely cause. Or, better yet, just walk away.
- Poor data hygiene habits
Data hygiene is fundamental to a well-run business, and it affects your relationship with clients. Data hygiene typically refers to cleansing applications and databases to remove bad, corrupted, and old data that’s no longer needed.
It also refers to data backup practices, something that not all businesses take seriously. For instance, a recent Barracuda Networks study discovered that 66 percent of Office 365 users rely on their recycle bin for backup. Keeping in mind that data in the recycle bin eventually disappears, this is a problematic approach to data backup especially in highly regulated industries.
So, as you take on a customer, you’ll want to assess their data hygiene habits and as necessary implement policies regarding database cleanliness, backup practices, and security. Clients that resist these measures are not worth having because they put themselves at risk and are likely to demand a lot of your time fixing problems.
The Earlier, the Better
Understanding a client’s shortcomings helps predict how good or bad the relationship will be. The more effort you put into the get-to-know you phase, the less likely you’ll be to have to fire a client later. That’s why weeding out problem clients early on is essential to running an efficient MSP business.
Michael Mowder is the Senior Director of Partner Success and Services for Barracuda MSP, a provider of security and data protection solutions for managed services providers, where he is responsible for the partner journey from on-boarding, to implementation, through professional services and finally, renewal.
