Increasing Your MSP Profitability by Monetizing Your RMM

monetizing rmm profitability

monetizing rmm profitability

Once upon a time, businesses relied solely on their sales and marketing teams to drive revenue. New, smarter approaches to business management have revealed that many other departments throughout an organization can increase revenue and improve profitability.

This holds true in the world of managed services providers. It’s no longer just about contracts, tech hours or projects — success involves monetizing as many aspects of your business as possible. Every solution and tool investment should turn a measurable profit.

Every managed services provider knows what a remote monitoring and management (RMM) tool does and how it increases productivity. In turn, RMM tools have a direct impact on the bottom line, usually by reducing labor costs (we’ll get more into this later).

But what many IT providers are missing out on is the opportunity to directly monetize their RMM tool. They simply see it as a fixed cost of doing business, an administrative tool and not a profit generating tool that directly increases profitability. In short, they’re not actually charging for it.

But you most certainly can — many successful MSPs do — and we’re going to talk about how to do it.

But first, let’s take a quick look at the basics in terms of how tools like NinjaOne impact an IT provider’s bottom line.

Managing Multiple Clients

First and foremost, we all know RMM is a tool for scaling. Remote management is what allows a few people to manage thousands of endpoints.

Scalability is a requirement for any successful business and it would be impossible for an MSP to maximize growth without an RMM tool. Every new client would mean adding new resources to manage them, labor hours would grow exponentially, and every client would be an almost untenable financial risk.

So, an RMM tool allows you to take on more contracts with less overhead. This is “part one” of the tool’s profitability.

Automation Frees Up Time and Resources

You could spend hours upon hours working on trivial tasks that could easily be automated. And the more clients you have, the more technicians you would need to hire to handle the extra workload of said trivial tasks.

Considering labor costs are the most expensive line item on an MSPs profit and loss statement, you want to avoid any time-wasting activities.

So don’t think of an RMM as just an administrative tool. Using RMM automation allows you to tap into the profitability-increasing potential of the tool. If you are just using it as a means to remotely access a machine or to interact with it at a desktop level on an “as-needed basis”, then you are not taking advantage of the time-saving automation capabilities of the tool.

This math here is pretty obvious. RMM tools reduce travel time and time spent on routine IT tasks while improving the customer experience. This means you greatly reduce labor costs and improve client satisfaction.

And there you have a second way that RMM tools help an MSP to succeed and grow.

 

Some RMM Automations that Keep You Profitable

  • Monitor for continuous critical events
  • Identify when a device is unintentionally rebooted
  • Identify devices in need of a reboot
  • Monitor for offline endpoints
  • Monitor for hardware changes
  • Monitor antivirus and automate scans
  • Identify when disk space is approaching capacity and take
  • Monitor for high memory usage
  • Monitor whether critical applications are running (particularly for servers)
  • Monitor for network utilization
  • Automated patching
  • Encrypt drives
  • Perform scheduled tasks
  • Perform scheduled reboots

Get more details on these and additional things you should be doing with your RMM here.

 

Now, you may be thinking that both of these benefits only apply on contract work.

If you’re billing a client for your time, what would be the point of spending less time on them? Or the cynical MSP might just be thinking that we’re talking about an RMM saving money, not making money. So let’s get into that next.

Monetizing RMM within a Break/Fix Model

Let’s first consider the case of the client you’re billing hourly, break/fix model of providing IT services. Imagine that you normally spend 10 hours per month on this client on patching, server reboots, checking logs and other regular administrative tasks and bill them accordingly. Now, through the time-saving powers of RMM, you find out that you can do all of these things through the automation provided by your RMM.

Believe it or not, most people see this scenario and think: “Well, I just lost nine billable hours. How is this helping me?”

The key is to remember that your clients aren’t actually paying you for your time. They’re paying for results. They just want to know their systems are working when they need them and optimized.  In this scenario, the results they’re getting haven’t changed (they might even have improved), so there’s no reason to take hours off of your bill. Why punish yourself for becoming more efficient?

There’s a good chance that you’re thinking, “Wow, this doesn’t sound right. How can I bill for work I didn’t do?” If so, that’s a good thing. It’s smart to be ethical, because business karma is no joke and your reputation has value.

When I was an MSP owner, I always focused on clients that made their money at their computer — primarily professional services — but I didn’t stop there or avoid other clientele. Some of my clients just needed some regular server maintenance, patching, and some hours to use as needed. For those clients I sold block hours, 10 hours at a time.

I looked historically at what it took to do complete tasks on their network. Four server reboots and patches per month totaling two hours of labor. I kept charging that once I had the RMM do it. In fact, in my PSA our RMM billed using the name Tech1 and it went right through to the invoices.

The clients didn’t complain. If anything, they were happier since we got this work done as promised and when scheduled with more precision using our RMM than techs accessing machines. I usually informed the client that we had added a level of automation, but I kept it simple and focused on the results they would see. In short, they were going to benefit from our ability to monitor, be pro-active and responsive, and provide them the up-time and optimization that would help their business. I never received any push back from any clients on this, and my MSP billed a lot of hours that were performed by my RMM.

What most managed service providers do is go for full transparency after the changeover to the RMM tool. Simply tell your clients that you’re now able to do a better job of maintaining their network with a tool that automates and completes critical maintenance tasks the right way each time. But don’t forget to attach a price tag to that value.

You bought the RMM tool, you set it up, you added the ability to pro-actively monitor and manage your clients machines, and — if setup correctly — you have strengthened your client’s network. So charge for it! The client is used to paying a certain amount for this work, and the client doesn’t care if a tech patched a machine or a tool did it. They just want it done. Send the bill either for the hours as they originally were when manually doing the work, or bundle them as set tasks performed monthly and send a bill for a flat rate each month for that amount.

Monetizing RMM with Managed Services Agreements

As a former MSP owner, I have direct experience monetizing RMM for both clients on managed services agreements as well as for those who were paying for pre-paid block hours. If you have ever tuned in to one of NinjaOne’s MSP Live Chats you have heard me say that a managed services agreement should become more profitable the longer it is in place. The logic behind that is you become more efficient in running a client’s network and reduce monthly service hours over time, hence making the contract more profitable.

In terms of administering a managed services agreement, the largest cost to the MSP in terms of overhead are technician hours. The primary way I lowered that cost was by leveraging the power of automation provided by my RMM.

Anything I could have my RMM do instead of a tech, I set it up and let it do the job. I saw the power of the tool, and how it could do the job of multiple techs and never call in sick or miss a repair window or forget to do something. I used my RMM in place of technician hours to get the job done, and thereby reduced the tech hours spent on managed service agreements. This, in turn, made them more profitable.

 

“Watching John with the machine, it was suddenly so clear. The Terminator would never stop. It would never leave him, and it would never hurt him, never shout at him, or get drunk and hit him, or say it was too busy to spend time with him.”

— Sarah Connor, Terminator 2: Judgement Day

 

When I think of how I monetized my RMM at my MSP, I think I viewed my RMM as my Terminator. It was never late, it never called in sick. It worked 24/7 and never complained. It never missed a deadline or forgot to do something. It was reliable and it made me money!

No revenue lost. Lots of time gained, and if you explain it correctly, the customer sees it as a net win for them — better, faster service without a price increase. If you aren’t fully monetizing your RMM you should be.

Next Steps

For MSPs, their choice of RMM is critical to their business success. The core promise of an RMM is to deliver automation, efficiency, and scale so the MSP can grow profitably. NinjaOne has been rated the #1 RMM for 3+ years in a row because of our ability to deliver an a fast, easy-to-use, and powerful platform for MSPs of all sizes.
Learn more about NinjaOne, check out a live tour, or start your free trial of the NinjaOne platform.

You might also like

Ready to become an IT Ninja?

Learn how NinjaOne can help you simplify IT operations.

Watch Demo×
×

See NinjaOne in action!

By submitting this form, I accept NinjaOne's privacy policy.

NinjaOne Terms & Conditions

By clicking the “I Accept” button below, you indicate your acceptance of the following legal terms as well as our Terms of Use:

  • Ownership Rights: NinjaOne owns and will continue to own all right, title, and interest in and to the script (including the copyright). NinjaOne is giving you a limited license to use the script in accordance with these legal terms.
  • Use Limitation: You may only use the script for your legitimate personal or internal business purposes, and you may not share the script with another party.
  • Republication Prohibition: Under no circumstances are you permitted to re-publish the script in any script library belonging to or under the control of any other software provider.
  • Warranty Disclaimer: The script is provided “as is” and “as available”, without warranty of any kind. NinjaOne makes no promise or guarantee that the script will be free from defects or that it will meet your specific needs or expectations.
  • Assumption of Risk: Your use of the script is at your own risk. You acknowledge that there are certain inherent risks in using the script, and you understand and assume each of those risks.
  • Waiver and Release: You will not hold NinjaOne responsible for any adverse or unintended consequences resulting from your use of the script, and you waive any legal or equitable rights or remedies you may have against NinjaOne relating to your use of the script.
  • EULA: If you are a NinjaOne customer, your use of the script is subject to the End User License Agreement applicable to you (EULA).