The Alpha Chad’s Playbook to Maximize Profits in Managed IT Services

Note: this piece is written as satire and does not reflect EMKAL’s business practices, but is based on actual observations over the past 15+ years.

Like many industries, the managed IT services space is facing increased competition. Customers expect more and want to pay less, which could put the squeeze on your business. In response to this worrying trend, I have written the following 10-step playbook to eat your competition alive and help you smash through to record profits.  

Low-Ball Your Initial Price

Quote only half of the actual price you want to charge a client. After they sign and you have achieved Vendor Lock-In (see below), you can then skyrocket their price. Make sure you bump their price annually! 

Enforce Vendor Lock-In

After they’ve signed on the dotted line, re-sell them “sticky” IT services. Sticky means that the client will have a very difficult time disentangling from this service. One of my favorites is backups. Re-sell them a backup solution at-cost initially, then add your fat margins to jack up the monthly price. You have their backups under your thumb, what are they going to do? It’s like legal ransomware – very profitable!

Take Control of Their Relationships

Insert yourself between the client and their services. Mark them up, bundle them (see next point), and increase their dependency on you to make changes. Whenever there’s a problem, blame the service provider and position yourself as the hero who will make things right. Manufacturing this barrier will make you difficult to replace!

Bundle Services

Convince the client that they need a full suite of services (dark web monitoring, XDR, SIEM, etc.) otherwise they will be at high risk of a cybersecurity incident. If they have questions about what they are paying for, bury them in tech-jargon. It’s important that you don’t line itemize these costs, as this transparency will lead to more annoying questions. After they sign up, make sure they know that all of these “critical” services will stop if they ever end their contract with you. Fear is a great motivator!

Find the Customer Satisfaction “Sweet Spot”

Maximizing customer satisfaction is a sucker’s game. We’re here to maximize profits. So your goal is to keep your client just satisfied enough so they don’t try to replace you. IT switching costs are high for your client, use that to your advantage! 

Control Labor Expenses

Since you’re re-selling services, you don’t really need talented, expensive IT staff on your payroll. If the client has issues, just forward it to the vendor that’s actually providing the service. But make sure to take the credit though!

Offer “24/7” Support

Some clients will demand 24/7 support. We all know it’s not practical to guarantee that talented, local IT staff will pick up the phone at all hours of the night. Get around this by outsourcing this service overseas to faceless techs who know nothing about your client’s IT environment but are (probably) trustworthy. Hey, we said we offer 24/7 support, we never said it was any good!

Provide a Toothless SLA

Clients might also demand a Service Level Agreement (SLA). No problem, offer a 5 or 10% discount when you don’t live up to expectations. It will be a pain for the client to prove and won’t be worth their time. Even if they do, you’re already making so much money that this discount is irrelevant. Or just bump their price to compensate for this discount!

Use an Exploitable Pricing Model

Structure your business so that you get paid when things break. The “break-fix” and “block time” models are both great examples. Then, when issues arise, deploy band-aid solutions. This will increase the likelihood that the problem will recur and you can bill again and again. It’s the gift that keeps on giving!

Keep Profiting After the Relationship Ends

If the client eventually does find a way to leave, that doesn’t mean the money should stop flowing in for you. Put their domain under your re-seller account. They’ll have a really hard time pulling it out of there, and since your contract has already expired, you are not obligated to help. It’s free passive revenue to do literally nothing!

Stick with this playbook and I guarantee that you’ll be swimming in profits in no time. Sure, this approach might chafe against your customers, employees, partners, or anyone else who interacts with you, but you’re in it to win it. Anyway, clients are expendable. If you lose one, it’s pretty easy to snag another with this foolproof playbook.

Above all, make sure you don’t become a wimpy Beta MSP that values client relationships, end user satisfaction, or long-term solutions at an affordable price. Trust me bro, follow this playbook and you’ll never have to worry about profitability again!

Get an IT Assessment