After serving the IT Channel for the last eight years, it continues to surprise me how much MSPs have struggled to adapt to the recurring revenue model in their businesses.
Paper checks and manual processes are still the norm in our industry. The status quo is comfortable, and change may require business owners to take a new approach. That helps explain why most of the MSPs I’ve worked with didn’t think they could get their clients on autopay. Well, that is, until they asked.
I truly believe that MSPs have the right to win recurring revenue on an automated basis, That goal is not as difficult to achieve as some may believe a simple change to their workflow is all it takes to have the desired effect.
Win recurring revenue
Getting clients on an autopay schedule using a payment portal only requires one small change in your process. All you have to do is make it a standard expectation listed in your business contracts.
That conversation should be happening up front in the sales conversation when your team explains what the client can expect from you, and what you expect from them.
The autopay discussion is also worth having with existing customers based on the high level of service your business provides. They need your MSP’s support to operate; you’re maintaining their business-critical services and deserve to be paid on time.
Putting clients on autopay may seem like a daunting task that’s not worth the hassle, but if you don’t put those crucial processes in place, clients are more likely to take advantage of you. You will, in effect, be giving them free products and services.
Many are not going to pay all your team’s work. MSPs must have a system in place to continually collect payments, starting with a one-time setup on autopay. That’s the way the recurring revenue model is supposed to work.
That system also puts your business in a better position with clients who don’t want to pay their bills. If 90% of your customers pay automatically every month and just one is being difficult, it gives you more confidence to confront them.
It’s fairly common for small businesses. 10% of their clients typically cause most of the problems, but it’s a lot easier to handle the situation knowing they could still pay the bills if they walked away from their most troublesome accounts.
Autopay and payment automation should be pitched as a positive change in the name of security, and it won’t disrupt your customers’ processes negatively. They will end up spending less time making payments and gain instant access to all their invoices.
You have the right to demand quicker recurring payments from your clients. After all, your company is providing security that protects their operations and other services that keep them in business.
If you want make the switch to recurring revenue, check out our partnership with CharTec.