The best way for any business to grow is strategically: at a manageable pace, and with a clear view of implications and opportunities as they evolve.
While there’s no single, all-encompassing secret to success, these tips will help frame a strategy for MSPs looking to develop profitable, sustainable growth.
1: Set smart goals
A clear vision is crucial to any enterprise. For MSPs, that means setting serious, concrete long-term and short-term goals that are specific, measurable, attainable, realistic and timed. Incorporating these goals into a business plan will help when improving or expanding a service portfolio, with a mix of short and long-term goals.
Specific goals help everyone understand what needs to be accomplished, and will help with creating and sticking to sales plans. But these goals also have to be realistic, and match the skills, resources and time available. Most importantly, they should be communicated clearly to the rest of the business, so each team is on board and understands what the business is trying to achieve.
2: Provide structured but flexible service offerings
When MSPs focus only on fixed-fee services, they appeal only to customers who place very high value on their IT systems. To achieve 100% market coverage, MSPs should consider providing a more flexible service offering that will appeal to customers at every level of IT maturity, selling individual solutions as managed services.
Some of the most popular managed service plans include remote monitoring, printers, help desk, backup and disaster recovery, managed security and patch management.
One useful approach here is to take the 80/20 rule. Only 20% of the addressable market is seeking a fully-managed, fixed-fee type solution. The other 80% of the market is dominated by customers that want to buy individual products and services like antivirus and backup.
3: Use research-driven pricing
Managed service offerings are many and varied, but a good investigation into service delivery costs can help MSPs identify the right price points, models and approaches for each service offering, whether that is penetration pricing, premium pricing or promotional pricing. One good place to start is by working out how much it costs to perform one hour of service.
An MSP’s value is now based on the end user experience, which means that pricing models must be quickly and consistently aligned with new marketplace trends, staying relevant by being ahead of the curve.
By researching the pricing that will best service the business, an MSP can reposition to maintain healthy margins while delivering value to the end customer.
Managed services is a model which can adapt to different market conditions and competitive threats, and by following these tips, MSPs will be more durable against changing conditions with a next-level business.
