Recently, we offered businesses some tips on how to find a good managed services provider. But what about the MSPs themselves? Don’t they need some advice once in awhile?
We thought it might be helpful to share ideas on why an MSP should work with a business phone system partner instead of keeping that responsibility in-house. Whether working with Loop or not, MSPs can get great benefits from an arrangement with a partner whose expertise is phones, phones, phones!
We sat down for a Q&A with Loop Founding Partner/President James McKinney to get his thoughts on the subject.
Got any questions? Let us know!
Why should an MSP work with a business phone system partner?
JM: The expertise required to make the installation and level of continuing service successful will exceed their capability. It doesn’t make sense to hire one person to do it, because they still won’t have enough of a resource container. It’s too time-intensive to train their own staffs to do this, because it’s complicated.
They’ve got staffs of people who are experts in how to make networking successful, but there’s a completely different set of rules involved to execute on the voice end of things. They’ve got to understand different terminology, and how to advise a customer against making a bad decision. These things all come into play, and the amount of money it would take to build their own infrastructure is cost-prohibitive. That’s not even getting into the cost or complexity of Federal Communications Commission (FCC) compliance.
People at MSPs have their own areas of expertise, and we try to encourage them to stay that way. Don’t try to become a jack of all trades, because then you get bombarded with things you don’t have the knowledge to to resolve, or you become so overwhelmed with basic phone tasks that you don’t have the opportunity to grow in your own specialty area.
Why is FCC compliance complicated?
JM: Things such as record keeping, money collection and disbursement are not easy. To lawfully comply with FCC regulations requires a huge undertaking of staff, training and cost.
An MSP would need to register with the FCC, collect the appropriate contribution amounts from customers, and distribute back to the FCC. There are also numerous reporting requirements, filing deadlines, and financial disclosures that you must share with the FCC.
Unfortunately, the complexity doesn’t stop at the FCC. Each state, county, and city has its own regulatory and tax requirements with which a system you needs to comply. A business phone system partner will know how all that works.
What about staffing?
JM: Hiring the right people is always a challenge. Then, after building the right team, an MSP would need to build up a large enough customer base to recoup that investment.
A business phone system partner has already built the team and completed any learning curves involved. We allow an MSP’s technicians to stay in a comfort zone, and can safely communicate with their customers.
In Loop’s partnerships, we work directly with the MSPs clients. Why?
JM: We’re not going to cut the MSP out of the loop, but we’re going to immediately establish a relationship with the customer, so we can understand their language, approach, issues and the change they’re trying to make. Then we’ll take our platform, build around what they’re doing, and – in conjunction with the MSP – make sure that the necessary infrastructure is in place.
It’s better if the customer comes directly to us with any phone issues. If they go to the MSP for everything, it adds another layer to support and resolution. That will create frustration for the MSP – which would just be relaying information – and for the customer, since it will take longer to resolve their problem.
If there is a situation that requires engaging the MSP, we’ll do so on behalf of the customer so that we can communicate what’s going on from a technical perspective. Then, if there’s a network issue, the MSP can determine what the best course of action is.
How should the financials work with the MSPs existing customers?
JM: In our case, once the MSP establishes the relationship, it gets the commission for the relationship for the life of the customer’s arrangement with us, regardless of whether the MSP keeps the customer. We have no incentive to see the customer change MSPs.
Our Partner Program page can help provide more details.
What questions should I ask a potential business phone system partner?
JM: We advise that you read the partner agreement very carefully, particularly if you are white-labeling or reselling partner software. You may be assuming more liability than you think. In most cases, the onus for license compliance will be on the reseller (meaning YOU if you don’t have a phone system partner), which means you can expect audits and penalties from the software provider if your customer is not compliant.
You also may be liable for customer actions that are beyond your control or knowledge, such as trying to reverse engineer or build a competitive product. Our partners do not have that issue because we have a direct billing and support arrangement with the customer, therefore the MSP is not caught in the middle.
So, again … read that partner agreement, ans ask questions if you’re unclear on anything in it.
Can Loop help advise MSPs on this?
JM: Of course – please call us if you have questions. In this case we’ll certainly have a vested interest, but we’re happy to share our wisdom on how an agreement with a phone system partner can benefit your managed services provider.