I recently had the privilege of interviewing Joe Amaral, owner of The Amaral Group, an IT products and services provider that earned the #92 spot on the prestigious Ingram Micro SMB 500 list of top-performing partners in 2012.
During my conversation with Amaral, he shared something with me that I’ve never heard before: “We’ll sell customers a managed services contract if they ask us for it, but we prefer break-fix contracts with no monthly recurring revenue guarantee.” At first, I thought this guy must have a really dry sense of humor and any second he was going to tell me ‘Just kidding.’ After all, every reseller wants more recurring revenue, right?
After sensing my surprise to his first comment, Amaral shared another thought, which shed light on the first one: “The fact is that a large percentage of our revenue comes from picking up new clients who were dissatisfied with their MSPs.” The Amaral Group earns a healthy percentage of its annual revenue by unseating incumbent MSPs who have burned customer relationships by locking customers into long contracts and/or signing customers up for service programs with monthly fees where few services are ever delivered.
I know you’re probably thinking what I was thinking at this point: “Just because other MSPs try to lock customers into long contracts, or they don’t provide enough value to their clients isn’t a good reason to ditch managed services altogether.” And, here’s where the method to The Amaral Group’s madness starts to make sense. The VAR uses an open source RMM (remote monitoring and management) solution to monitor its customers networks and IT assets at no cost to the customer. “If any problems are detected, we contact them to make them aware of the situation and ask whether they’d like our assistance.”
More often than not, customers take The Amaral Group up on the offer, which leads to a regular stream of monthly billable service activities. This year, the Amaral Group is projecting 30 percent revenue growth over last year.
Want to learn more specifics about how The Amaral Group employs this unique IT service strategy? Check out my complete interview with Joe Amaral and hear about how his company won a large network infrastructure project with J.P. Noonan, one of the largest transportation companies in New England.