Editor’s note: Commercial Integrator has teamed up with The ASCII Group, North America’s original and vendor-neutral community for Managed Service Providers (MSPs), to produce a series of thought-leadership content for the AV/IT community.
Not all business is considered good business; but, if you have read even this far, you may already know that. Please read on for some additional insights: Over the 30 years of running Net Sciences, I have learned some hard lessons about engaging with new clients — namely, the three main aspects of client relationships that delineate the good, the bad and the potentially ugly.
The Three Risks
Potential of Client Culture
The first consideration is the culture of the potential client, i.e., how they see business and how they “relate to” their technology. Please note that this is not about politics; rather, it is about their philosophy and how they see technology (as a friend or a foe).
In my experience, the ideal client is enthusiastic about technology and embraces it as a potential force multiplier and competitive advantage.
They should see your services in that light as well, realizing that you not only prevent catastrophic failures but enable greater success.
Determining the Relationship Value
Next is the likelihood that the relationship will be profitable, both short- and long-term. This includes what they do (and how they do it), whether they fit your ideal client profile and whether they bring something less tangible to the table.
For example, will engaging with a candidate — despite the warning signs — offer additional valuable benefits over time?
You will not always be able to see this from the outset but let your gut instincts be your guide. Additionally, never underestimate the opportunity cost of time and mental energy wasted on clients that are not valuable.
Read Next: Recognizing Burnout Early: Safeguarding Your Team’s Longevity
Assessing the Risk Profile
Finally, always consider the risk profile of any potential new client acquisition.
For example, if you engage with a client that faces regulatory constraints, but they are not interested in addressing them, you are taking on a compliance risk.
If you have another client that believes that consumer-grade equipment is more than good enough, that is operational risk.
And, if you are considering taking on a client that fights you over security basics — MFA, MDR, privileged access management or anything else you consider mandatory — you are taking on a security risk.
The Three Rewards
When you find a business with a similar culture, everything flows seamlessly. If you choose clients with the right culture, they will naturally gravitate towards you as a business peer and reliable source of guidance. You may well find that such businesses are more stable financially as well. This will make your services as well as their costs easier to manage. Finally, this sort of alignment also greatly heightens your chance of referrals to the right prospects.
The scariest of all these risks are those around compliance and cybersecurity. However, these are also the most manageable risks, and, by choosing clients wisely, you can mitigate this exposure.
Of course, nothing can protect you entirely from third-party or supply-chain risk, no matter the quality of your clientele or your own practices. But with eventual experience, you can learn to focus on the risks under your control and prepare for those you cannot control.
I would thus argue that a bad client choice is a risk you can control and suggest that you choose clients just as carefully as you select your tools.
Closing Thoughts
Every MSP has experienced the feeling of the need to grow, subsequently made bad choices and then experienced the aftermath.
While engaging with a client that is marginally profitable, highly risky or one that does not appreciate your work may represent a short-term tactical win; however, it will never be a good strategic choice.
On the other hand, engaging with a client that respects your guidance, who wants to use their technology as a competitive tool and understands their risk will always be the right choice, now and well into the future.
Joshua Liberman is president of Net Sciences, Inc.
