For managed service providers (MSPs), creating contracts with vendors may seem like a great idea. These agreements define the terms and conditions between you and your vendors. The downside is that they are difficult to break. If a vendor fails to live up to its end of the bargain, your business and its customers may suffer the consequences.
Pursuing contract-free relationships may benefit your business and your customers. Here are three reasons why.
You Can Quickly and Easily Adapt to Industry Changes
The MSP industry is evolving. To keep pace, you must provide services that meet your client's expectations. On top of that, you need vendors that can help you deliver these services without any delays or disruptions.
With contract-free relationships, you'll be able to handle client requests, even if they change in the months and years to come. Since no contracts are in place, you'll have the flexibility and scalability to tailor your services to your customers. You can add or remove services and support from your vendors at any time. And you can do so without incurring penalties or fees for violating an existing contract.
Additionally, contract-free relationships can help you gain a competitive advantage over your industry rivals. Many MSPs struggle to adapt to industry changes, due in part to their vendor contracts. While these service providers are bound by the terms of their vendor agreements, you're not. As a result, you'll be able to consistently provide your clients with the services they need. This can help your business drive sales and profits and cement your brand as an industry leader.
Further reading How MSPs Can Avoid Vendor Lock-In
You Can Reduce Your Overhead Costs
Saving money is a top priority for your business. If you want to cut costs, look at your existing vendor contracts. When you do, you may find that you're paying big bucks for services and support beyond what you actually need.
In a contract-free relationship, you only pay for the services and support you need at a given time. This also means you only need to cover the overhead costs of the services that you're providing to your customers. If you need a vendor's help to fulfill customer requests, you can invest in the tools and resources required to do so at that time. Otherwise, you'll be able to minimize your overhead expenses and save money.
Of course, when you lower your overhead costs through contract-free relationships, you'll have more money to invest in other areas of your operations. There are many ways to use the money you save to improve your business. For instance, you can invest in your MSP marketing and promote your services to more prospects than ever before. Or, you can add new services to your portfolio or upgrade your existing ones.
You Can Deliver Exceptional Customer Service
Customer service is a game-changer for MSPs. You can explore ways to improve your customer service every day. After all, if you can't provide your clients with best-in-class support, you may miss out on opportunities to establish long-lasting partnerships.
Thanks to contract-free relationships, you can level up your customer service. You won't have to commit time and resources to develop and maintain contracts with vendors. Instead, you can focus on what's most important: keeping your clients happy.
When you don't have to worry about vendor contracts, you can allocate additional time and resources to your customer service and track your results. Doing things like conducting customer surveys and monitoring key performance indicators (KPIs) across your customer service can have far-reaching effects. Over time, you'll be able to identify your customer service strengths and weaknesses. Plus, you can find the best ways to transform any weaknesses into strengths.
Further reading MSP Customer Retention: 5 Best Practices to Reduce the Churn
Take advantage of contract-free relationships with vendors to streamline your operations and position your business for long-lasting growth.
