MSP Client Agreements: Are You making these 3 mistakes?

| Author
TruMethods

The foundation of your MSP is the services that you provide to your clients, which are laid out in the agreements that you sign with them. You need to make sure those agreements serve to support an effective, efficient business model that brings in a healthy amount of monthly recurring revenue (MRR).

You can do this by keeping your client agreements focused on the essentials and avoiding these three mistakes.

1. Failing To Define Your Edges

Be crystal clear about what’s included in your monthly price – and what isn’t. Your clients are signing up for the business value you provide, so avoid getting distracted with other tasks that are out of your wheelhouse or not worth your time.

A project may come up that you can help with, and you should feel free to take that on. However, be sure to negotiate a separate agreement for it, and don’t provide it as a freebie within your monthly service agreement.  

2. Offering Different Service Levels

You’ve identified your Super Power and built an MSP packaging and pricing strategy around it. Sell that package, and that package only. You’re saying you’ve identified the best path to a successful IT partnership. Don’t undercut your own credibility by suggesting alternative paths.

When you offer different levels of service – with our standard service you get X, with our super service you get X and Y, with our super-duper service you get X and Y plus Z – you confuse the client as to what the best solution is. The best solution is the one you’re offering, period.

3. Setting Entrance Barriers

Make it easy to hire you! You need to avoid barriers that will cause a potential client to think twice, or even decide against signing up with you at all.

One kind of barrier is practical, such as expecting that the client already has a certain kind of technology stack. The value you offer as an MSP is bringing their technology into alignment with their business goals, so don’t exclude customers based on what their current stack looks like.

Another kind of barrier is mental, such as using an overly complicated client agreement. You should be able to get all of the information that your lawyer says you need into a one- or two-page document. Any longer than that, and the client wonders what you’re hiding in all the verbiage.

The right agreement puts you on solid footing for a long-term, mutually beneficial relationship with your client. Avoid the above mistakes to help prevent confusion and conflict.

Learn how to how to drastically increase your monthly recurring revenue in our free guide.

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TOPICS: MSP monthly recurring revenue

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