12.12.19 – CEPro –
Looking to bolster your RMR? Industry expert Connor Kane offers his top tips for getting the most from your service contracts.
By now, integrators are well aware of the benefits of recurring monthly revenue (RMR) and how managed AV solutions can help expand a business’ reach. However, there is still a bit of mystery surrounding how exactly integrators go about implementing these services effectively and in a way where they’ll stay in place in the long term.
During my time in the AV industry, I’ve figured out a few ways to help integrators effectively price, sell, and implement managed services while earning more, selling more effectively, and keeping overhead low.
Here are five of my best tips:
5 Ways to Better Implement RMR
1. USING ANCHOR PRICING
Customers across all fields come to the buying table with a budget in mind. This budget may or may not be realistic for what they want in return. Integrators can use price anchoring to adjust clients’ expectations toward a more realistic number.
For example, say a commercial client wants a full suite of managed services for their headquarters. They have a stated budget of $200 per month, but realistically you can’t profitably provide this level of service for $200.
So to realign their expectations with reality, use price anchoring. To do so, you present three price options:
It’s absolutely worth the price tag, but you don’t actually expect to sell this package. Occasionally you will, but its main purpose is to reframe expectations for the next option.
Next, you present the package that covers exactly what the client needs. This package costs two to five times more than the stated budget (say $600 per month in this case). If you’ve done your job right, the client’s expectations are reframed such that this doesn’t sound expensive — in fact, they understand the true value.
Last, you present the package that fits more closely with the client’s stated budget. This package is bare-bones — just the basics. By this point, most clients will be inclined to at least consider the middle option.
Say you typically retain clients for five years. The increase in lifetime value from selling the client on the middle-tier plan is huge — 200% greater, in this example.
2. BUILD AROUND THE REMOTE ACCESS TECHNOLOGY YOU USE
This one’s a no-brainer, and varies based on the type of integration business you run and the hardware you use.
If you serve residential clients and are not already using OvrC products or similar hardware that allows you to easily and simply do things like reboot your clients’ network, consider looking into switching over to those products to make it easier to pivot to a recurring service model in the near future.
If you serve commercial clients, consider designing your projects with the long game in mind, using technology that allows you to provide ongoing value to clients by monitoring network and security status and more, remotely.
If you don’t have a service department and prefer to outsource initial support triage, consider looking into options like OneVision or Parasol that handle that for you, solving the most common problems on your behalf 24/7 and referring more complex issues to you for resolution.
3. CHOOSE A SUBSCRIPTION BILLING SOFTWARE THAT AUTOMATICALLY CHARGES CARDS
Part of the logistical trouble of implementing AV-as-a-service can come in administrative work — particularly, billing. If you’re not getting paid on time and automatically, the additional revenue you gain quickly becomes less profitable.
That’s where subscription billing software comes in.
If you’re not familiar with the back-end of it, you’ve certainly interacted with the front-end: every time your card gets charged for Netflix, you don’t have to log in to pay. It happens automatically on the same day each month, and they receive their payment on time, every time, with no admin work.
You’ll likely need to pay a nominal amount extra each month for the ability to automatically charge, but the value becomes clear as soon as you get your first payments without needing to remind (let alone chase down) a single customer.
4. NOTIFY CURRENT CLIENTS
Since most integrators aren’t planning to sell these as standalone services to get people in the door, you need a good way to communicate these offerings to existing clients.
It’s much easier and cheaper to sell to existing clients than acquire new ones. Managed AV services are no different: the quickest way to get traction with new managed services will be to offer them to existing clients.
Here’s what I’d recommend: put together a one-pager that outlines the three service levels mentioned earlier. Describe them in a benefits-first kind of way, and name the plans in a way that communicates the value
- Tier 1: Complete Peace of Mind
- Tier 2: Technology Caretaker
- Tier 3: Security Essentials
Then, email these out and ask to get on the phone to walk them through your new offerings. As a bonus, you could add a page to your website where your clients can enroll themselves in these plans.
5. BUILD IT INTO YOUR SALES PITCH FOR NEW CLIENTS
Once you have all of the above pieces in place, you can effectively build it into your sales pitch as a standard service. You want future customers to understand that this is in their best interest.
How you frame it is critical. In an initial description of these services to a new customer, resist the urge to detail every service you’ll provide. Instead, focus on the benefits to the customer.
What do they get by hiring you to manage their home or office technology? Peace of mind; reliable support from the people who understand their system best; a personal hotline to a real human expert; the confidence that if something goes wrong, they won’t be stuck trying to figure it out until 11PM.
When you can get your customers to picture themselves never having to spend another late night dealing with network issues, you’ve sold it effectively.
There’s a lot to figure out when it comes to bringing your managed services to market.
By taking time early on to price effectively, create well-crafted sales pages, leverage remote monitoring products, and define these as standard and critical services, you can earn more, sell more effectively and keep your overhead (time AND money) low.
If you’ve decided this is right for your business, what’s holding you back from making it happen?
At Wheelhouse Digital, I help integrators save time, grow revenue and get the clients they want through strategic digital marketing. Want to talk to an expert about your website and marketing strategy? Head over to Wheelhouse Digital to schedule a complimentary one-on-one web strategy call.