We’ve all been there: a customer you signed up and thought would be great seems like they are sucking the life out of you. Your team dreads seeing their number pop up – they seem to endlessly call about every little issue. You think you might be losing money on them, but they pay you so much! What can you do?
The knee-jerk reaction is to do nothing or, at best, fire the client. But why do they keep calling? Restructuring your agreement with the customer is probably the best option, but how do you even start the process?
The answer always starts in the data.
First, find out your customer’s profitability. Are they profitable? OK, you’re making 20% margin – is that good? What do other MSPs make? Good margin is around 30% – great MSPs can push above 40%. So, how do you make this customer better?
Why is this customer not profitable? Where are your technicians spending all of their time? Assigning hard dollars to ticket types is crucial to understanding where the money is going. Is it an old server’s hardware? Replace the server. Is it a Line of Business application? You might need to make sure the vendor is supporting the product and not your team.
Working internally first, how can you become more efficient? More training or automation? What technologies can you implement to cut down on tickets? Work here, then circle back to the data to see how it improves.
Then look externally: prepare to increase the customer’s costs; either through additional services or right-sizing their agreement. Have the conversation with the customer, showing them the data to support your claim.
Ultimately, you might need to fire the client. But let the clients fire themselves! Tell them: “Either pay this price that makes sense for me or get someone else to run your IT, because I can’t do it any better than this.” And you know that you can’t because you’ve done all of the work to prove it.