An MSP or Managed Service Provider helps keep your company operating at or near 100% through managed services and IT Support. According to Markets, the global MSP market is projected to reach a staggering $329.1 billion in value by 2025.
Now, that's a huge market right there. As a budding Managed Service Provider, you certainly want a share of the market.
For the remainder of the article, we will be using MSP as the abbreviation of Managed Service Provider.
Even so, to become a top MPS company, you need to get the basics right. Simply put, you'll need to know what to do to stay ahead of the curve.
You see, launching, building, and growing an effective managed IT services business requires a lot of dedication and careful strategizing. There isn't one thing
With that said, here's how to become a much sought-after managed service provider.
Develop A Ferociously Unique Selling Proposition
With the projected MSP market growth, it is easy to get tempted to offer what's popular on the market.
But to truly stand out, you need to develop an exclusive offering your prospective and current clients cannot find anywhere else. One of the most popular offerings for successful businesses is becoming an Azure Expert MSP. Other ways to help set your business apart are becoming a cloud solutions provider, providing remote access management, and adding in monthly calls are all ways to boost customer retention and attract new clients.
Like any business, the most important thing to focus on is service to customers and business development. Companies need new customers to grow and to be aggressive with their business plans.
Here's how to create a unique USP for your MSP business.
Maintain Excellent Customer Service USPs (Unique Selling Propositions)
According to Microsoft, 90 percent of your target clients use customer service excellence or lack of it to determine whether to transact with your company.
And guess what?
Most MSPs suck at customer service.
To stand out, be sure to provide your customers with quick and reliable support. Clients will be happy to interact with your business if you're available to resolve their issues 24/7, even during public holidays. Top-performing MSP's have clearly defined customer support triage setup. For serious issues, there are guidelines to follow and this allows customers to get the help and support they need. Along with that being quick to support offers more sales opportunities because if there is an issue and an opportunity for an upsell it can be taken care of right away.
Another reason to take customer service seriously is birds of a feather flock together. Successful business owners hang out with other successful business owners. They discuss everything from money to how they run their company and more. By standing out for amazing customer support you can turn your customers into a referral engine.
Invest in a Remote Monitoring and Management System (RMM) to increase your team's efficiency and speed of responding to glitches.
Create Industry-Based USPs (Unique Selling Propositions)
The best MSP companies focus on one sector at a time.
The thing is, to attract customers, you must position your company as an authority in a particular field. This means picking a vertical or industry and sticking to it.
Clients are more likely to trust you if you understand what they want and how their businesses work. Put differently; you'll draw more clients if you have specialized knowledge that your competitors don't. After working with dozens of MSP's and coaching over 40,000 business owners this is the single largest factor in business success. If your company is going to be a Cloud Solution Provider it should specialize in everything in the cloud. The same can be said for companies that focus on being a Microsoft Azure. Think about what your company excels in and create a unique selling Proposition around it.
Implement Technology-Based USPs (Unique Selling Propositions)
You can create your USP around the technology you use. You can, for instance, offer outsourced IT cloud services. Throw in the industry-based USP, and you have something innovative. This may sound vague but most MSPs overcomplicate their offerings. Pick the best thing you do stick with it. If you are the best with business continuity planning then go with that. Every company has its own business requirements. Understand what those are and develop a USP around it. There is something unique about every business. If you're not sure what sets you apart from competitors ask new customers why they moved to you. They will tell you!
Takeaway: Find your unfair advantage that's hard to replicate. It's the special thing you have that no one else could quickly copy or buy with money.
Develop A Pricing Model That Works For Your Business
IIndeed, the favorite part of being an MSP business owner is, well, making money!
To become a top MSP company, you'll need to establish pricing that your customers find affordable and valuable.
How do you price your services fairly while ensuring you're raking in enough revenue to sustain your business and leave you with a reasonable profit?
When determining the pricing model to adopt, start with your breakeven cost and the cost of delivery. Once you have that figured out, analyze the difference between the cost of hiring full-time employees and your outsourced IT services.
That way, you'll know how to break down your solution in packages potential customers can understand. A good rule of thumb is to follow the KISS method. Keep It Simple Stupid. MSPs thrive on a reoccurring revenue model. Customers like that the overall fee is broken down monthly and it includes a variety of services. Overall whatever you prefer for your business plan keep it simple.
Once you have completed these steps, standardize the pricing of your core offering. When you determine what the standard and extra costs are, you can price your services in a way that allows you to penetrate the market faster.
Besides, this will enable vendors to set a favorable price and, as a result, shorten your sales cycle. When the pricing is right, selling your managed IT services becomes easier and repeatable, allowing you to grow your business much faster.
Some of the best MSP pricing models you can implement include:
This is the most flexible and popular pricing option. It is ideal if you're targeting clients with employees who operate multiple devices. When using this model, be sure to develop a price that caters to all services per user. This helps reduce the number of headaches you're going to have figure out devices and know that if the user is on the payroll they are getting support with their company device. Cloud services and Microsoft Azure are a must for this model.
Flat Fee Pricing
As the name suggests, this pricing structure enables you to offer your services for a standard fee across the board.
Charging a flat fee is ideal for MSP companies that outsource IT for their clients.
Monitoring only pricing works best if you're in a market that doesn't require a lot of maintenance. You can price your services this way to track specific elements of your client's infrastructure and issue a warning promptly.
This service when offered alone is a high-profit service. Business automation can be set up to trigger alerts and updates when something is going wrong. It's usually a set it and forget it type of model.
This is also a monkey's fist for your business. It's a small service you can offer clients for them to get started. As time goes on and they get comfortable with your MSP it will then allow you to upsell other services and solutions.
Tiered pricing is ideal for MSPs that offer a variety of services to their clients. Here, you will break down the price into three or four tiers. The lower tier offers basic services while the higher tiers offer premium services.
The idea is to show your client that the higher the pricing, the better the services and value for their money.
Some clients only want the bare basics however others want it all. They want to get all of the services you offer from cloud services like off-site backup to advanced support and fast response times. Every company has different needs and it's up to you to figure out what tiers work for you.
A La Carte Pricing
This is the best MSP pricing model if you're looking to create an optimized solution for everyone. Here's you'll offer a standard service broken down into hourly blocks for clients who require specialized support.
There are some issues with this. With every customer having different services it does become a nightmare to manage. Even with programs like Connectwise to manage your customers, it's still a pain to manage it all. When I was working for an IT company we focused on moving away from this model. It's inevitable to have customers slip through the cracks and typically these are the lowest profit clients.
Takeaway: Develop pricing structures that will accommodate your target clients at all levels.
Choose The Right Tools
Any top MSP company leverages tools.
And, we've reviewed the ten best MSP tools for your business.
The thing is...
MSP software allows you to manage the endpoints of your clients, and by extension, enable them to run their businesses better.
We'll let you in on a little secret right now.
The most expensive MSP tools aren't necessarily the best and vice versa. Choose a tool that offers the functionalities you need to provide an excellent service to your clients and boost your profitability.
So, before you spend your money on any MSP software, ask yourself:
- Does the tool offer the IT function I need?
- Do I need software that offers mobile capabilities?
- Can this tool streamline my company's work process and lower the cost of providing my services?
Answering these questions will allow you to narrow down your choices of tools and, most importantly, determine the best MSP software for your needs.
Remember, the goal is to portray your company as one that uses technology to streamline processes while ensuring you get the best support possible.
Takeaway: MSP tools will make your job easier and give you a competitive advantage.
Focus On The Business Side Of IT
To stay ahead of the competition, you must get a grip on the business side of things.
You can stay on top of the business side of technology by tracking metrics that enable you to understand the direction your MSP company is heading.
Some of these metrics include:
- The average profit margin
- Customer satisfaction
- Customer churn
- Average deal size
- Average profit margin
- Revenue Model
- Monthly Revenue Per Month
- Return On Investment
- Technical Skills
Tracking these metrics enables you to identify redundancies in how you do business and find a way to deal with them.
On top of tracking your business's growth, you should develop a well-thought-out marketing strategy to put your services in front of your target customers.
The strategy should clearly define how you'll generate leads for your business and, most importantly, how you will convert these leads into buying customers.
As your customer base increases, be sure to set up a proper support team to guarantee your existing customers' continued satisfaction.
Remember, looking for new clients is between 5 to 25 times more expensive than retaining existing ones.
Create Result-Oriented Organizational Structures And Processes
It makes perfect sense to have organizational functions such as sales, finance, and marketing for your business. However, the best MSPs employ people with the expertise and understanding required to perform these functions brilliantly.
You must be thinking,
How does developing effective organizational structures and processes help your business become a top MSP company?
Well, numbers don't lie. The details of a study by the Technology Services Industry Association on Managed Services revealed that:
- MSPs with a dedicated sales team report an 8 percent increase in revenue.
- Operating and earnings before interests and taxes increase by up to 12 percent when handled by an organized team.
- The rate of retaining existing customers increases by up to 14 percent when an MSP uses dedicated and specialized client management.
… One More Thing
Develop A Strong Relationship With Vendors
Typically, MSPs act as the link between their customers and IT vendors.
These vendors offer an assortment of solutions such as business tracking, antivirus, business ticketing, and more.
These solutions are essential to the services you offer an MSP. So, when you want to team up with an IT vendor, be sure to check around for the ideal offer that you can resell to your customers.
And, when you've settled on a particular vendor, make sure that you're in constant communication to nurture a healthy working relationship.
The idea is to ensure that your vendors can, for instance, let you in on how to make the most out of their solutions to help your clients.
A little secret sauce from the industry is leading vendors will send you clients. For example, if you become an Azure Expert MSP Microsoft will look for ways to partner with your firm. If you leverage cloud software becoming a cloud solution provider and partnering with the software will help them work with you. Vendors will even give you additional money for marketing, company training/events, and more.
Want Help Building An Industry-Dominating MSP Business?
Yes, you can be the best MSP company in your industry.
You only need to go above and beyond what everybody else is doing.
At times this is easier said than done.
GrowthGenarators can help put your MSP business on the map. We can develop a marketing strategy to make your business more discoverable by its target customers.
Contact us today to book a free schedule with one of our MSP marketing executives.
To discover even more tips for success with your MSP marketing strategy, check out this post.
December 27, 2021
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