Kaseya Community

1 year contract commitment?

  • As we all know how the current economy is hurting us, I was wondering what other MSPs are doing out there with their contracts.

    Since our first day running Managed Services we have uphold our 1 year commitment in our contracts. Some of our potential clients are questioning this 1 year commitment and are actually starting to look at other vendors before giving our services a thought.

    I was wondering if anyone out there has different commitments or maybe even does it on a month-to-month basis.

    Any real world experiences are highly appreciated.

    Thanks!
    Daniel

    Legacy Forum Name: 1 year contract commitment?,
    Legacy Posted By Username: ddenhoed
  • Our Managed Services agreements have no comittment timeframe. They are meant to be a continuous ongoing document until the customer gives us 30 days notice.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: boudj
  • boudj
    Our Managed Services agreements have no comittment timeframe. They are meant to be a continuous ongoing document until the customer gives us 30 days notice.


    This is what we do as well.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: jasonmh
  • Same here,customers feel happier that they are not tied in.

    In practice its so hard to enforce a 1 year contract. Most customers will want a 30 or 90 day notice period so you effectively end up at the same point as not having the 1 year commitment. You just end up with a lot more arguments.

    Its best to rely on the quality of the service you provide rather than some legal paperwork. If your customers are happy they will stay,if not they will go regardless of any contracts.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: PeterS
  • PeterS
    ...Its best to rely on the quality of the service you provide rather than some legal paperwork. If your customers are happy they will stay,if not they will go regardless of any contracts.


    Well said.
    Also, we find that it is a nice selling point for us, since most other places in our area require a one year contract.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: jasonmh
  • jasonmh
    Well said.
    Also, we find that it is a nice selling point for us, since most other places in our area require a one year contract.


    We have only 3 year commitment contracts.Yes, it is harder to sell, but it's worth it.!

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: rudi
  • 3 -yr committment... Guess you've also locked in your pricing?

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: boudj
  • WOW 3 years. well done.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: chris@busy.co.nz
  • boudj
    3 -yr committment... Guess you've also locked in your pricing?


    No, we are using %CPI to adjust pricing quarterly.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: rudi
  • We outline in our agreements that it is a one year agreement with a 60 day notice to withdraw. We used to have an automatic renewal with a 15% increase built in unless otherwise renegotiated with our client.
    We recently had the same client try to lock us into a two year agreement with a decrease built in for the following year. Their justification was because their vendors were doing this for them. We told them we can't buy into that plan especially with the state of the economy as it is now and the near future.
    It may come to the point where this client becomes a "C" client and we drop them, but for now, we are locked in for two years at the same price each year and a 60 day advance notice to withdraw.
    Regards,
    TR

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: trnetwork
  • All our our agreements start at 3-years, minimum. The monthly fee raises once per year based on the CPI. It renews automatically for another 3-year period. I can't think of any time where a client was really all that hesitant to sign the contract, by the time that talk comes they are 99% secured. We have a few clients that have signed longer contacts...even though we don't discount for longer contract terms.

    Additionally, our contact is kinda difficult for clients to cancel and get out of. It has a standard 90-day written and mailed notice, but the catch is...if the problem is service/performance based they have to give us 30-days to fix it or they can't get out. Of course we understand some economical reasons and will work with some clients (in fact we let a client out of a contract because the economy was crushing them..), but if a client comes along and thinks they can just get out when they want to after we get their network perfected they aren't going anywhere without a large cancellation/licensing fee.

    That may sound a little harsh, but we do a lot of prep work to get a network up to speed...after all the better the network is running the less we actually have to do. The last thing we need is for us to do a ton of work only to have a client cancel on us 8-months down the road.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: CeruleanBlue
  • We also have no time committment, just a 30 day out. It's easier to sell up front, and aside from a couple very small clients, the only ones we've lost have been due to the economy, and that's been very few so far. As someone else said, we'd prefer to let the quality of our work keep the client with us, rather than them feeling obligated to stay. I can certainly see the value in locking in those 3 year contracts, we've just found it much easier to sell this way.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: kcears
  • our selling point is this....."you are never under contract, you can leave if you are ever dissatisfied". It keeps us on our toes but makes the sales process much shorter. Granted, they are paying $99 a node setup fee plus fixing any network issues they have (billed seperately) but if we do as we say then we don't have to worry about them going anywhere.

    My other point on this is the fact that if a client wants to break the contract, lawyers get involved. Well, many of our clients know each other as we are a VERY high referral base. If we sue a client for breaking a contract, we are going to hear about it from 3 other clients. That isn't good!

    Granted, I don't have my 3 year revenue locked in like others but I have confidence in my techs that these clients will not leave. I have the utmost confidence in my techs to back me on this. But again, not for the faint of heart!

    Everyone has their style - this is mine.

    Legacy Forum Name: MSP General Discussion,
    Legacy Posted By Username: markmancini