Business customers are consuming services on demand and are turning to managed service providers to equip them with a well-structured and protected IT infrastructure. With services such as the Internet of Things, artificial intelligence, and cybersecurity in great demand, MSPs are positioning themselves to offer and maintain digital-based solutions.
Small to medium businesses are expected to increase IT spending by 5.4% this year, according to a report from Analysys Mason. And Grandview Research finds that the MSP market is booming. By outsourcing services such as network, infrastructure, and security, SMBs can decrease their internal costs and remain agile.
There is a lot of competition in this subscription-based and anything-as-a-service (XaaS) economy. Here are three ways to grow as an MSP and achieve competitive advantage:
1. Prioritize Customer Stickiness
Finding customers and retaining them is an expensive proposition. It’s never been more important to keep your current customers happy in the long term. According to research by Brain and Company, a 10% boost in customer retention can expand the value of a business by more than 30%.
As an MSP, you can capitalize on deep customer ties to identify challenges and proactively solve them. Position yourself as a trusted adviser to boost customer loyalty. Not only does this provide opportunities to upsell and reduce churn, but satisfied customers are more likely to give you positive reviews. Online feedback is important, with one survey reporting that more than 90% of 18- to 34-year-old consumers say they trust online reviews as much as personal recommendations.
Design your customer journey so that new customers experience value as soon as possible. Communication with your customers is key. Let them know about any new services and/or opportunities available. Finally, automate your onboarding process to be well-documented, efficient, repeatable, and scalable.
2. Offer Bundled Services
As an MSP, it’s essential to constantly transform your product offerings. Business customers, like regular consumers, are interested in subscription-based services, made popular by the likes of Netflix and Spotify. They also want to consume technology more easily with a one-stop shop—a single vendor for most, if not all, of their business needs because IT is not their core business.
Moreover, in this uncertain economy, business customers want to pay monthly, rather than make a large, one-time investment up front. MSPs need to offer a variety of unique bundled services such as software as a service, cybersecurity as a service, data storage, and mobile device support. These IT services can be billed on a subscription basis and provide a way to grow a recurring revenue stream.
You can scale by partnering with a cloud platform provider that manages subscription and billing, vendor and product information, and vendor onboarding across multiple channels. A platform also enables you to create your own digital ecosystems that can simplify connections between partners through a centralized point. No single stakeholder needs to own or operate all components of the system, which means this network of partners, from vendors and distributors on to resellers, offers combined value. With a B2B digital marketplace, there is more opportunity to cross-sell and upsell.
A common mistake MSPs make is trying to go it alone. It can be a painstaking process to build application programming interface (API) systems for your marketplace and manage them. Expand your reach more rapidly through a digital ecosystem that enables you to establish one set of APIs for your products into a catalog that can be distributed globally. Building out through an ecosystem is less expensive, less time-consuming, and helps you scale faster.
Providing more services increases customer loyalty because you’re saving them the hassle of seeking products and services elsewhere. Cloud-based solutions also expand your reach of potential customers. In addition, a platform allows you to streamline the entire procurement, fulfillment, and billing activity—all in one place.
3. Deliver Compliance as a Service
Compliance regulations can be difficult to manage when moving to the cloud or making changes. Compliance-related issues can fall through the cracks and open up potential security threats.
As security and compliance needs grow, MSPs can fill a need by providing a comprehensive solution to maintain compliance and keep the cloud running efficiently. Furthermore, smaller MSPs can compete with large enterprises by creating a niche, such as compliance as a service.
Healthcare, banking, and legal services, to name a few, deal with increasingly more detailed data handling requirements. For example, organizations are turning to MSPs to help them deal with compliance of existing rules such as HIPPA in the healthcare field. Then there’s Systems and Organization Controls 2 (SOC 2), which was created to provide auditors with guidance on how to evaluate the operating effectiveness of an organization’s security protocols. Since MSPs are supposed to be the pros when it comes to IT infrastructure, it’s vital that you maintain compliance for your customers and your own operations.
To provide effective security services, you need visibility across your organization rather than keeping compliance responsibilities disconnected or siloed. A cloud platform provider with end-to-end automation can help you fill the gaps—with a unified view and data integration to improve visibility and workflows.
The Engine Driving MSPs
Automation is at the core of MSP success. With automated processes such as provisioning and billing, end customers can consume technology more easily and on a self-service basis. MSPs can benefit from automation platforms with preprogrammed templates that enable procurement and fulfillment operations. This allows a “one-click” shopping experience with vendors and creates huge cross-selling and bundling opportunities.
No matter how big you are as an MSP, doubling-down on automation can help you thrive in a digital-first world.