Three Challenges Managed Services Providers Face

The success of the Managed Services sector is a natural outgrowth of several ongoing trends. These trends include embracing core competencies, market specialisation in proven strengths and reliance on external sourcing for non-core business elements ranging from parts and supplies to credit and collections.

For the same reasons, selling Managed Services is a tough gig. Challenges managed services providers face are found in three specific areas, which include:

  • Product complexity
  • Pricing complexity
  • Complexity of the sale

Let’s look at each of these in terms of the nature of the challenge, how the challenges affect the selling process and how these challenges might be addressed.

First, let’s consider product complexity.

Managed Services Product Complexity

Whenever you move beyond the sale of physical, tangible products and into the realm of abstract or intangible products, you are instantly confronted with the inadequacy of language to describe what it is that you sell.

Describing a complex service in a marketing context is one thing, executing a binding contract for services based on a written description is an entirely different matter.

It is critical that both buyer and seller understand the physical scope of the problems being addressed and the solutions being offered. This understanding starts with an open and detailed discussion and discovery investigation of the pain points and problems experienced by the buyer.

For example, a problem initially described as “slow receivables” must be dissected and detailed into something more useful. Slow receivables might be more accurately described as:

  • X thousands of dollars outstanding beyond 60 days
  • Invoice disputes related to inaccurate descriptions of product delivered, services rendered or prices changed
  • Billing-system delays related to data entry or order processing
  • No follow-up on invoices sent
  • Inaccurate billing information such as billing addresses or persons responsible

When the problem is understood in these terms, the solution can be described much more effectively. Now the solution discussion can embrace something much more finite than simply promising to speed up bill payments.

Solutions might be described as:

  • Order-entry and billing-system linkage with workflow automation
  • Invoice receipt follow-up
  • Invoice inquiry processing
  • Billing dispute resolution processing

This is a menu of incremental services that can be described and mutually understood. For any given prospect, all or perhaps just one or two of these may be part of the solution for reducing outstanding receivables.

Complex Product Discussion

The concept of guided selling is not new, but it is especially applicable to the selling of complex services management.

The customer must feel some level of confidence that the descriptive materials offered are relevant to their issues. This confidence is necessary in order to engage the customer in any type of discussion involving possible solutions.

If the prospect is reading user stories, they need to read user stories from other customers who face the same issues that they face and preferably from the same market space and demographic that they occupy.

As the prospect’s confidence increases, conversations are more easily guided into specific solutions for specific issues, addressing one small problem at a time until an overall solution is revealed and understood.

For managed services, each part of a solution functions as a part within an overall product. This keeps the conversation focused and reduces the chance of assumptions regarding what is or is not being addressed within the context of the sale.

In our receivables example, each of the items can be separately evaluated for potential impact on the overall problem. A solution is composed of those services that offer measurable positive impact.

Technology of Selling Managed Services

Configuration technology (CPQ) is critical to building the finite boundaries of the solution discussion. CPQ products link up specific functional parts or services with specific requirements or issues.

A scripted discussion guides the sales rep and the buyer down the tree of questions, response and resulting options available.

As the discussion evolves, a solution emerges that is composed of many parts or specific service elements designed to mitigate the overall pain and problem experienced by the customer.

When the discussion is complete, the result will be a list of specific items to be addressed and the services offered to address each item. The result should be a complete solution that addresses the specific issues identified.

CPQ offers proposal generation capabilities that will clearly identify what is being offered and how it will address the customer’s requirements.

Managed Services can provide complex solutions without getting lost in a jumble of language and vague promises. Customers are assured that their issues are understood and that the solutions offered are both efficacious and proper.

Product Configuration