IT and Business Insights for SMB Solution Providers

5 Tips from Top-Performing MSPs

Follow these strategies to drive recurring revenue growth from existing customers. By Matt Richards

EVERYONE NEEDS AN ADVOCATE—even businesses. Managed service providers are in an ideal position to be the voice for and champions of SMBs. MSPs are SMBs themselves running lean operations, while simultaneously providing IT support and services to other small businesses. They intimately understand what their customers need to succeed because it often mirrors their own experiences.

Datto polled our MSP partners on the business metrics that matter most to them and uncovered their secrets for success—most notably, how to drive recurring revenue from existing client relationships. Here are the top five:

Embrace change. In today’s competitive landscape, success—and recurring revenue—are contingent upon strong customer relationships. While fixing what’s broken is important, it’s not enough to prove just how valuable the MSP is to its customers. MSPs need to adapt to clients’ ever-changing needs and be a trusted resource. As more SMBs shift to managed services to streamline operations and adopt emerging technologies, MSPs need to adapt their own business models to keep pace. They must:

Adopt a more advisory and consultative role. This positions MSPs as expert resources and an extension of the SMBs’ internal teams, particularly when SMBs have questions and need real-time guidance. 

Improve the delivery of service-level agreements (SLAs). SLAs present an opportunity for MSPs to stay ahead of their SMBs customers when it comes to the services they are delivering.

Maintain high client satisfaction rates. MSPs must always make sure that their clients are satisfied with their current and new offerings. To do so, they must listen to how their customers define success and help them achieve those goals.

Recognize that one size does not fit all. Solutions custom tailored for a healthcare SMB will likely not provide the same value to an SMB in financial services. Datto’s recent survey reveals that 56% of MSPs specialize in services for a particular industry. Embracing an industry niche has proven to be a competitive advantage for them.

Create new revenue streams. As more platforms and devices integrate artificial intelligence and machine learning, expertise in these data-driven technologies will quickly become an important differentiator among MSPs. Many Datto MSP partners have no plans to sell next-generation devices, but those that currently do or plan to start selling them this year say that managed power, video monitoring, and digital signage are the most popular options. Device sales is an emerging area for new revenue with a lot of potential too.

Strive for efficiency, efficiency, efficiency. Savvy MSPs need to devote resources to strengthening their operations. Our recent discussions with MSPs reveal that approximately 1 in 3 report that taking steps to improve service desk processes, performance, and automation efficiency contributed to their increasing client renewal rates. More than 1 in 4 report that improving service technician performance contributed to growth. This highlights the importance of measuring performance internally and looking for opportunities to improve.

Expect to grow. As MSPs strengthen customer relationships and increase the breadth and depth of products they provide, they need to understand how best to manage growth while maintaining high-quality relationships. Growing MSPs that add new services, products, and people should keep a focus on scale, and find ways to increase customer revenue and satisfaction while maximizing utility from their employees. Adopting automation, optimizing service technician time and performance, improving help desk performance, and capturing their own best practices on a regular basis will help MSPs scale and maximize productivity.

At the end of the day, regardless of an MSP’s business philosophy, all strategies must support recurring revenue growth. While the combination of these tips might seem overwhelming, the advantages outweigh complacency.

MATT RICHARDS is chief marketing officer at Datto.


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