Vendors Poaching Your Clients?
BY IT GLUE | January 28, 2020
Ever had a vendor reach out to your client as a contract was expiring, trying to get the business for themselves and cutting you out in the process? As an MSP, you’re often the intermediary between a vendor and the end client—a necessary role that’s beneficial to all parties. You have the relationships and the capacity to implement the vendor’s product and ensure ongoing satisfaction. It’s a symbiotic relationship that benefits all, but sometimes the vendor can’t resist the temptation to sidestep your MSP and go directly to the client, thereby capturing the margin that you once claimed. There’s no value in pointing the finger at vendors that do this or sitting around venting, so what can you do?
Don’t assume—diversify
You may currently enjoy the added revenue derived from reselling third-party tools but it’s a precarious revenue source. Have you modelled what it would look like if that revenue disappeared? How would it impact your current pricing scheme and ability to cover ongoing expenses? The greater percentage of your revenue should be from stable and reliable sources. Reselling SaaS doesn’t always make the cut, but selling time and expertise does.
Focus on your value
The benefit of having the client-facing role can’t be understated. You don’t just implement and maintain IT services, you provide a relationship and assurance that you’ll be there to support the client on an ongoing basis. This emotional connection and trust that’s nurtured over the years is worth more than the minor savings the vendor might offer the client, so focus on establishing this.
What’s more, because you take care of the client’s network, you have a macro and micro understanding of their IT infrastructure, and how it fits into their line of business. Having this essential knowledge gives you the ability to know what products will meet their unique needs, whereas a vendor is simply looking to sell product. Your ability to recommend a different vendor is precisely why vendors want to bring your clients in-house, but it’s also one of the main points of value you can offer to your clients, because it’s focused on their best interests. Your motive will be viewed more altruistically when you effectively communicate why a given application is necessary to their business and how it fits into their tech ecosystem.
The power of convenience
While the human brain gives us intellectual superiority over other animals in the kingdom, most of us are cognitive misers. We’re motivated to exert mental energy only when necessary, and favor opportunities to make life more convenient. Just think about all the modern conveniences you’ve happily exchanged money for over the years. Smart appliances, cleaning services, Uber Eats, Amazon Prime…you get the idea.
Your clients are no exception. The reason they hired you is not just for your expertise but also for the convenience you provide. Keep making your clients’ lives easier, and the administrative annoyance of switching over to working directly with vendors won’t be worth it. Gently remind them that dealing with you is a lot easier than dealing with dozens of vendors individually.
Service level superiority
Do the math. The customer support team of a vendor likely won’t be able to handle the additional volume of service inquiries from endpoint users if they successfully poached your client base. Say you have 50 clients each with 25 endpoint users. That’s an additional 1,250 endpoint users the vendor will now have to allocate time to. Sure they could simply enlarge the army of call center employees, but your service level should be much higher than some new vendor call center reps located goodness knows where. It’s unlikely that your clients will be pleased with the level of service they’ll get from the vendor, but that’s not something the vendor will tell them up front.
Put it in writing
Draft your agreements so it’s clear that you will manage the implementation and billing of a vendor’s product for a specified term. The goal isn’t to make it difficult and unpleasant for a client to move, but delay any snap decisions, and ultimately make it painless for all parties if the client wishes to modify the services agreement at the end of a term.
Having a paper trail isn’t just important with regard to the terms of an agreement, though. You’re aware of all the work you do for clients because it’s documented in IT Glue, but are your clients aware of this? Talking about it doesn’t really convey the depth of support you provide. Having the ability to showcase your work and bring a level of transparency is invaluable. It will also establish a more collaborative relationship with the client, and build out that personal connection that will make them stick with you.
If you haven’t looked into the how MyGlue can help your MSP achieve this, what are you waiting for? It’s our client-facing application that brings the functionality of IT Glue to your clients. They get the benefit of having a secure password manager, their proprietary documentation, and more. Based on the IT Glue framework, MyGlue helps you become a trusted security advisor. Simple. Smart. Secure.
