As an MSP, you are responsible for the customer’s countless hardware and software issues. While fixing these issues day in and day out, you will encounter many issues that will not fall within your remit. These might include managing new line-of-business applications or fixing necessary security loopholes from WFO to WFH endpoint transition in the client’s environment.
In times when cybersecurity is becoming a key concern for all businesses, some customers will always have unrealistic expectations of you and demand more of your time than they are entitled to. Here, a Master Service Agreement (MSA) can help you clarify and outline what you are responsible for. A comprehensive MSA can improve customer perception of your MSP and minimize the number of legal disputes that arise in the future.
However, just having an MSA in place is not enough. Keeping customers satisfied by managing their expectations, and mitigating the potential for disputes require you to follow certain best practices. To discuss what those practices are, I invited Bradley Gross, an expert in IT & Technology Law for MSPs, for this week’s Silver Linings podcast.
Keep your MSA simple and include everything
It is important that you stay away from ambiguity when entering into a service agreement with a customer. To achieve transparency, forget fancy, difficult to decode language, and state everything in simple and plain language for your client to understand.
These are most common legal issues that impact MSPs the greatest. So, make sure that everything from the duration of the agreement (monthly, 1-year, and 3-year), limitation of liability, cancellation clauses, and price protections to other elements necessary to your relationship with the client is articulated simply. Follow best MSA practices, including:
- Specifying which IT assets are covered by your support so there is no question of what you’re accountable for in the event of an issue. Thoroughly outline customer responsibilities as well as your responsibilities.
- Setting clear expectations around reporting issues. It is also essential that your customers know how exactly to best contact you if they have an issue. By phone, text, email, chat, or a ticket portal?
- Including realistic performance metric benchmarks such as device uptime and incident response times. On the safer side, educate customers about complex metrics such as Mean Time Between Failures (MTBF), Mean Time to Repair (MTTR), and Mean Time to Failure (MTTF).
- Including a clause for customer compensation.
Does the customer want to negotiate MSA terms? Go for a “no”
I know many MSPs lose many potential clients in the final round of negotiation just because of the terms mentioned in the contract. In such a case, Brad suggests going for “NO.” Rather than seeing “no” as a stop sign, use it to your advantage. As long as you know the greatest concerns or pain points of potential customers such as understanding of their cybersecurity liability unlike your competition. They will come back to you on the negotiation table to finally sign on the dotted line as per your master agreement.
You should also retain this power to say “no” during the ongoing engagement with a client. When a crisis hits your customers, they often ask for help. Don’t accommodate going beyond the MSA. Doing any extra work during a crisis, such as managing security for a customer who just permanently switched to a distributed workforce, will not get you paid extra., It will be more likely to increase your risk of liabilities. So, say “no” to any ad hoc work. For the security of distributed workforce, send a separate ‘Scope of Work’ document. As the best practice, double-check on the promises.
Have only one version of MSA across your MSP
First, understand that MSA is a document that cannot be changed for different customers. It is a master document that can be reviewed or re-evaluated as you see changes in the industry compliance and major shift in the MSP landscape.
To avoid having to change MSAs for each customer, refrain from making “services” part of the agreement. Your MSA is a global document that you must use with each client. This means it can’t include any variables and needs to remain your bible for service delivery. So where do services go? They go under your “quote” that will be governed by price, the scope of work, exceptions, and assumptions, and the term period mentioned in the MSA.
Have new MSAs signed by existing customers as you consider “situational realities”
Sometimes, a long-term customer relationship requires you to make some exceptions. As long as these exceptions are profitable and mentioned in your MSA, you are good. If you are seeing increased demand from multiple clients, mark your ability to “adjust the invoice for the increase in endpoints or workstations” in the MSA. If one of your customers saw fluctuation from 100 to 5 workstations, Bradley suggests mentioning a profitable minimum fluctuation threshold of 40 in the MSA to address the issue.
Once you include these situational realities and re-evaluate your MSP, have all existing customers sign it. Any good customer that understands industry compliance and the changing realities of the business will have no problem signing it. If a particular customer refuses to sign it, realize the possibility of letting them go at the time of contract renewal.
Final Thought: Setting MSAs can help you manage customer expectations and clarify accountability by giving your customers a clear outline of where your responsibilities begin and end. If written and managed effectively, they can help you prevent customers from holding you accountable for issues that are not your fault or are outside of your control.