IT and Business Insights for SMB Solution Providers

3 Ways to Target New XaaS/IaaS Growth Areas

The XaaS/IaaS business is about building more meaningful relationships with channel partners that lead to a deeper understanding of your MSP customers, the industry, and your business. By Laurel Visocky

Despite inflation, the IaaS market is ripe for rapid growth, with an expected compound average growth rate of 28.2% between 2022 and 2026. For managed service providers and value-added resellers, this represents new opportunities to make the most of customer demand.

Nevertheless—and I can speak from experience—many MSPs and VARs still fail to exploit the growth potential. Especially when it comes to customers in the small and medium-size business markets, MSPs are often leaving money on the table. As today’s MSPs are increasingly preoccupied with the human and technological complexity of realizing and growing sales, they are losing the time and resources they could spend on product innovation.

The good news is there are ways for MSPs/VARs focused on the SMB segment to help enhance the customer experience and concentrate on product innovation simultaneously. Let’s look at three strategies.

1. Identify and play to your strengths

In the cloud market, identifying your strengths is essential because that's the first source of potential growth. Which product features are particularly well received? The best insights into which features are powerful come from your digital data. If you sell multiple products, you often offer different additional features or product extensions. If you record your data carefully month by month, over time you can see which components are in high demand or which were selected by customers at the beginning and then later either not used or even unsubscribed.

Alternatively, you can conduct a customer survey. To save time, you can use digital tools to ask customers about individual items and their perceived return on investment. However, it's also helpful to have a face-to-face conversation with the customer who, for example, has complained or isn't using certain products in your offering. That way, you can better understand the underlying problem, whether it’s poor functionality, inappropriate use cases, or even a comprehension issue. This insight will simplify the decision of when to allocate more resources, when to get new features to market faster, and when to let some features go.

2. Evolve to be solutions-centric

Growth is all about answering the question of how to build a business in the services industry in the most sustainable way. This should first lead you to another pressing question: Why should the customer stay with you? Many would say because of your unique value proposition or differential factor, but it's more than just your product differentiation. As your end goal is increasing customer contract value and improving customer retention in the SMB market, the customer experience, solutions offering, and marketing play a crucial role. Here are some tips:

Broaden your portfolio. More and more customers are looking for "all-inclusive contracts" as they dramatically reduce the effort of searching, buying, and installing. You can also focus on offering bundled solutions to increase contract value and improve service quality. Ready-to-consume packages and self-service capabilities help make quicker selections and are often critical to the purchase decisions of SMB customers, who are known for moving through the sales funnel at lightning speed.

Enhance your customer effort score. How effortless is your service? You measure that with the customer effort score, designed to gauge a service’s ease of use, including finding the information they need or ordering a service. In the SMB cloud market, where customers are still reluctant to design their migration and create a digital infrastructure, it is crucial to offer lean, digitized assistance at all stages of the customer journey.

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