Quick poll: If you’re an MSP, raise your hand. Thank you…just what I thought….almost every one of you claim to provide managed services as a key service offering. This includes those of you that provide conventional IT managed services plus telco carrier services, print manufacturers and their dealers, software developers providing SaaS, and tons of other entrants seeking to capitalize on the wave of recurring revenue.
Are you feeling the pain? Are your clients questioning why you charge $125 per seat, while the local telco provider is advertising $45? Or…did you get a call from your client that just moved their line-of-business app to the vendor’s cloud and questioning if they need you now? If any of these scenarios sound familiar, read on.
These new competitors come from a concentric circle of business providers that are also seeking to expand their business with your client. Know that your client also has a trust relationship with these providers if they are a current vendor. Today’s traditional MSPs have to guard against these new competitive threats and be much more vigilant in differentiating themselves.
You tell the client: “There is no way <vendor> can provide the IT service levels I can! After all, I have my own help desk, NOC, local consultants and we’re active in the local community!”
And the client says: “Hmmmm…. It looks like the service levels are the same, the description is certainly almost the same. But <vendor> is offering a similar service for 40% less!”
So, how do you talk your way out of this one?
First, the MSP must move their conversation higher up the IT value stack and talk more about business work flow, rather than network infrastructure and service desk support. While you as an MSP may be proud of your technical prowess, this is becoming less of an advantage than in previous years. Today it’s more about the data, not the infrastructure.
Second, talk about the client’s business! Research their industry. Understand the challenges of this industry and how it relates to your client. Identify the common vendors for this client and what services they provide, especially for the line-of-business solutions and their accompanying add-ons. Be proactive and reach out to develop a relationship with these vendors that are important and strategic to your client. These relationships will get you closer to the business work flow.
Third, promote your unique knowledge and talents especially as it relates to a vertical or technical specialty. MSP business owners often overlook this aspect as they have become accustomed to these special talents and may not think of them being unique or different. I have often found that MSPs have unique subject matter expertise they don’t promote.
And lastly, leverage your relationships with your clients’ vendors. SMB business owners feel safer in doing business with clusters of vendors that work together and collaborate. Be proactive in reaching out to these vendors to establish a working relationship. Take the lead in collaborating relationships between these vendors. No doubt this effort may also lead to opportunities with these same vendors in their client accounts.
While there are certainly more ways and efforts for an MSP to differentiate themselves, the suggestions above do not require a big budget or additional staff to implement. Every MSP owner I’ve ever met is capable of taking these measures. It’s mostly a matter of focus and intention to shift your discussions with your client.
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This topic and more like it are discussed in The MSP CEO: Your Guide to Developing a Successful MSP Business. Available on Amazon, this book will provide Managed Service Providers (MSPs) of the IT industry with an in-depth perspective on the key steps for building and maintaining a successful and profitable MSP business.
Authored by long-time veteran and MSP business owner, Tommy Wald, The MSP CEO shares the wisdom and experience of highly successful MSPs and how they built their businesses. The book contains relevant data sourced from the nation’s leading IT financial consultancies as well as numerous interviews and anecdotes from leading industry journalists and analysts.
If you are an MSP business owner or executive, this book will provide you with guidance on what works, and what doesn’t. This book will serve as a road map for moving your business forward, regardless of how big or small your practice may be.