Growing your MSP business is hard work. Your goal might be to grow your roster of managed service contracts. But customers prefer to call you when something breaks and pay you when the work is done. They believe a managed service contract will be like that gym membership they can't get out of. It will lock them into paying for services they will never use.
One quick way to bypass this fear is to sell an interim product: Time blocks.
Selling blocks of 10, 50, or 100 hours of time is a low-commitment way to give hesitant clients a taste of having a competent team of technical experts on tap. Convince them that waiting till everything breaks is a disruptive way to operate and offer this entry-level option for a much-easier sale.
Block-time billing is particularly appealing to companies that already have an IT department. They don't want to outsource their IT needs but they do expect there will be times when they need help. According to a study done by Barracuda, this scenario is a rich source of new business for MSPs because technology is getting more complex and IT staff sizes are staying the same. You aren't likely to sell this customer a contract but they will probably love the idea of time blocks.
This billing strategy has financial benefits for your business, too.
The hazards of time blocks
It sounds so simple. But before you leap into this model, be sure you have a tracking procedure to manage it.
Without the right system, time blocks can create a nightmare of overhead. They can also leave you at serious risk of having every customer in your roster demand vast amounts of time in the last few weeks of the year. Selling a service you can't charge for or deliver is not a good strategy for growing your client base.
And there is a significant amount of data to track, if you sell your services in blocks. You have to track who did the work and how much time they spent, what work was accomplished, and how much time is left in each customer’s block. There are certainly tools in the market to help with each of these pieces but you don’t want to add layers of obstacles and unbillable time to your load.
You need one simple tool that can manage this entire process – preferably one – such as Moovila’s Perfect Project – that works with your PSA.
Why you should be selling time blocks
It’s clear why clients want to buy your services this way. And it’s always good business to give customers what they want. But billing for your expertise this way can be good for you, too.
The obvious benefit for you is that you get paid upfront. Not only does that fill the coffers before you have shelled out for labor, but it means you never have to chase people to pay invoices.
Time blocks also help you charge for work you are probably doing for free.
Time blocks help you charge for work you are probably doing for free.
It’s likely that you frequently give away advice that has a high value to your client.. Perhaps a customer you recently did work for calls looking for your take on a cloud solution they think will solve a headache for them. It takes only a few minutes to help them make a decision. But how do you bill for this?
That knowledge, while not time-consuming to share, took years of study and experience to acquire. You work in a knowledge industry and like to get paid for your expertise. But if this customer only calls you when something is broken and pays when it's fixed, sending an invoice for 15 minutes on the phone feels rude. And it would take as much time as the conversation did.
If you had sold them a time block, though, it’s simple to bill them for 15 minutes on the phone. Or it is if you have a good system for tracking those time blocks.
How to track time blocks in Perfect Project
Once you are set up in Perfect Project, this becomes so easy.
When the customer calls, click to create a task in their block of time in your Perfect Project dashboard. Hit a timer. Then sit back and chat. You won’t feel the need to rush because you aren’t giving your time away. You are selling it. When the conversation is over, stop the clock.
You can go back to doing your job.
Perfect Project has made a note of this consultation and deducted it from the customer’s time block. It has noted who did the consult, the date, the time, the cost codes, and any other relevant data.
This dashboard can also help you convert this call into future work and prevent an end-of-year rush. It might even facilitate converting this client into a service contract.
Time blocks in action
It is certainly a joy to be paid for your advice – and to be flush from being paid in advance. But that joy will quickly turn sour if – at the end of the year – a boatload of customers discover they own time blocks and want to spend them fast.
You can easily avoid this disaster, though, with Perfect Project’s dashboard on your screen.
When you look at the Labor Quantity Estimates vs. Actuals dashboard in Perfect Project, a chart shows you how close the client is to using up their time block. It also surfaces who did the work, what level of work it was, and many other details.
Back on the call, you take a quick glance at your screen and note that this 15-minute chat isn't putting a dent in this customer’s time block. So, you point out that they are due for some security updates and warn them that this is potentially leaving their data exposed.
"You have a time block that would easily cover this work," you say. "Do you want to schedule it?"
The customer loves this idea. You check who is available – right from your Perfect Project dashboard – assign the job with a few clicks, and give the customer an expected completion date.
This client is getting a tasty sample of what it's like to have a managed service provider. You are forestalling that end-of-year rush. And time blocks are proving to be a win-win.
The big picture
The real beauty of managing time blocks in Perfect Project, though, is in the Portfolio Time Tracking dashboard.
It displays every customer’s time block in a glanceable graph and shows you which customers are using up their time and which ones have lots of it to burn.
This shows you who you should reach out to, so you don't find yourself in trouble at the end of the year. Maybe you want to push a client to schedule something you know is on their wish list. Or perhaps you could offer everyone with lots of time available a security or maintenance check.
Those customers who reach the end of their time block early in the year will probably be easy to upgrade to a managed service contract. They have tasted the water, liked it, and are likely willing to commit.
Perfect Project makes tracking projects and time blocks so easy and accurate that you can use it to quickly start growing your business.
Schedule a demo today and take our rich time-blocking toolkit for a spin.
