Business continuity solution: How should MSPs price an offering?
A backup offering, when packaged as a business continuity solution, can pique your customers' interest and provide attractive margins if positioned and priced appropriately.
Backup is a long-standing and popular offering among managed service providers and other channel partners.
Times are changing, however. The emergence of cloud computing has altered the nature of backup and disaster recovery, which has become another as-a-service line of business. But customer expectations are changing as well. They are looking for IT resilience to protect themselves from a ransomware incident, as well as natural disasters. In this ask the expert, Raffi Jamgotchian discusses how MSPs can package and price their backup offering as a compelling business continuity solution for prospective customers. Jamgotchian is president and CTO at Triada Networks, a cybersecurity and IT solutions provider in Norwood, N.J., and a member of The ASCII Group since 2008.
Don't sell backup. Sell a business continuity solution.
If you take a look at the fitness world, you see that they are selling an end result: a better, slimmer, healthier (usually) version of yourself. They aren't selling you a pill, exercise program or some medieval torture device disguised as exercise equipment. Insurance companies don't sell you an insurance policy; they protect you from "mayhem."
This is why clients aren't interested in your backup product. They know deep down they need it, but they can't tell the difference in value between a high-end solution and a USB drive they bought at the store. Layer in your backup solution so that it matches how much downtime risk your client can tolerate. An accounting firm, for example, losing its systems in the month of April is not a good look; and waiting until a new server could be stood up and restored is not something that's going to fly, even if they can deal with a one- to two-day disruption during other months of the year.
A backup backgrounder
Here are three steps you can take to help customers come to grips with the need for a backup solution.
To err is human: Prepare customers for trouble
Many will use disasters as a way to help bring clients around. The problem with disasters is that they are few and far between in most markets. Here in the Northeast, we'll have our occasional blizzards and once-a-decade hurricanes. But those are looked at as anomalies unless you live in tornado alley or high hurricane regions.
Your employees are more likely to delete a file, click on a link or spill coffee in their laptop than your company getting hit by a tornado. That doesn't mean you shouldn't prepare for both, but your prospect is most likely going to emotionally connect with a common mishap.
Tell a story
Real-world stories humanize the recovery experience. Because Hurricane Sandy was a common experience, we describe how we recovered a client's systems in a secure data center and allowed them to continue to access email and their ERP system -- the customer was thus still able to take orders while its office was out of power and internet for two weeks.
More recently, I use the story of the accounting team at two different companies. Both received a fake invoice that brought them ransomware. One had our business continuity solution in place and was recovered in 20 minutes, while the other was not yet a client and lost two years of data because their backups weren't being monitored or tested.
Back up all the data
Data is stored in a lot of places, not just servers. Laptops are roaming around and your clients have data there and they are also using cloud services. Make sure you have a solution in place to protect those assets as well, because, unfortunately, the vendors don't usually provide granular backups.
Pricing and packing a business continuity solution
The whole purpose of laying out the above was to establish a framework for understanding what comes next. If you're selling backup, it's hard to compete against $5 to $10 per month services when the prospect doesn't really value what you are pitching. And the right product or services isn't the complete solution either. Like the prospect we signed after their ransomware incident earlier, they viscerally understood the need for not only a solid backup but one that would be available to them when they need it -- during a recovery.
With that in mind, here are five tips for creating a backup offering:
Pick a solid product. There are great vendors in the industry. Pick one.
Build a service and solution around the product and include things like periodic restores for testing.
Add in business continuity planning and testing. Many companies are required to test their plans once or twice a year. Make sure they do what they need to do and that your solution is ready for them.
Add up your labor to the cost of the product, sprinkle on some healthy margin and go. Don't sell your solution just based on the margin of the product; make sure that you're getting paid for all of the value you bring.
Tie your pricing scale to the solution you have; don't mix fixed pricing with scalable costs.
Protecting our prospects' businesses is a key pillar in any technology service provider. Unfortunately, there will be an event: Sally in finance is going to infect the business with ransomware; the CEO is going to leave his laptop in a cab; an ice storm is going to take down power lines; or the construction in the street is going to cut the fiber optic cables running to your building.
Get the best solution you and your client can afford and include the services that are going to ensure success.
Your muster is going to be how you are going to get your client back to business and you deserve to be paid properly for it. Get the best solution you and your client can afford and include the services that are going to ensure success. The cost differences between inexpensive consumer backup and more expensive backup appliances and services can be great, but when you properly include your services, it won't seem to be. In fact, it makes the choice of a "lesser" product almost silly.
Read on to learn more about business continuity solution approaches for natural disaster preparedness and find out how channel companies can defend clients besieged by cyber threats such as a potential ransomware incident.
