The managed service provider (MSP) market is growing. In a MarketsandMarkets study, sales in 2019 were estimated at more than $ 193 billion, a compound annual rate of 12.5%.
The study also indicated that the percentage of companies using MSP increased from around 30% to 50% in the last year alone. However, these are just the macro numbers. The growth of individual MSPs varies considerably. According to the study, a significant proportion of MSP has seen their business grow 20% or more annually. However, about half of them only grow about 10% or less.
We are now four months away in 2018 and I think it is fair to say that none of us really knows what to expect in the coming months, with global changes that will have consequences for all of us. So how can we ensure that as an IT company we do everything we can to remain successful and decisively profitable? Through my conversations and discussions over the past few months with Datto MSP partners in Asia, I have been able to identify some of the important best practices that have been shared by the most successful companies and that I would now like to share with you Some Managed Services Best Practices:
- Be the person you are going to
For managed service providers, it is important to define exactly what your company is doing, what services it specializes in, and what advantage it has over competitors in your area.
It is important to be able to communicate the value of your business to potential customers. An effective way to stand out from other IT providers is to develop a high level of experience in a specific area or areas. For example, an MSP that focuses on serving SMEs in health and finance, or an MSP that specializes in a particular service or technology (for example, disaster recovery and backup). This decision should depend on your personal preferences and potential clients in your area. By serving clients with similar requirements, you can accumulate experience over time that can be applied to all clients. Suddenly you will be the "go to" person for something.
- Be picky about customers.
Many new IT service providers take on whatever job they may get. This makes sense when you are just starting out, but as your business grows, it is important to be more selective with your customers. The first step: identify your ideal client. This is determined in part by your specific areas of expertise, but additional factors must be considered. For example, it is important to consider the effort required to support the customer environment. When it comes to current customers, don't be afraid to cut ties. In general, if a client does not fit well, it is best to end your relationship with him.
- Build customer trust
It is important that IT service providers strengthen customer trust by accessing and protecting their private technologies and data, on which their livelihood depends.
Always be sure to keep your promises, since without them there will be no trust or relationship. Offering unbiased technology advice to your clients will make you a trusted advisor. Of course, you must generate sales and make a profit, but that does not mean that you are selling your customers the most expensive products you can. It is more important to recommend technologies that help them succeed regardless of their costs. Providing customers with the right tools and first-class technical support builds trust and ensures a long-term business relationship.
- Standardize technology offerings
Standardization enables you to develop expertise in the technologies you use, reducing the time and effort required to implement and manage them. This also makes it easier to manage relationships with a limited number of providers. Be sure to choose technologies that support many different IT environments. Many successful IT service providers publish a catalog of services to ensure that current and potential customers understand the options available to them. It must be so detailed that there is no confusion about what each service offers, but not so technical as to lose it in general.
- Prize for a victory
Developing a pricing strategy is about achieving the desired and / or required margins for the services you provide. It is important to understand your own costs - look at what you need to make a margin and then make a profit. Many IT providers, especially those who are new to the business, make the mistake of underestimating their services to beat the competition on price. Instead, think about how you can make your services stand out from the competition and tell us why your service is getting a higher price. IT service providers use a variety of pricing models today, and theirs will be determined by your business needs. Many IT providers pay per user or per device, while others choose a fixed-price model or a hybrid of the two.
- Develop a sales and marketing process.
Many IT service providers have problems with sales and marketing. In some cases, this is because they come for technical rather than commercial reasons. Others, especially small businesses, may not have time to spend on sales and marketing. If you want to grow your business, it is essential to develop a repeatable sales process.
- go to school
Education is essential in a constantly changing industry. Peer groups are a popular choice for IT service providers who want to continue their education. These groups meet locally or online and allow members to learn from each other in formal and informal settings. Members are encouraged to network and share ideas. Another option is to request certification of certain technologies that you use to provide services. Many technology providers offer specific product training and certification programs, and there are several organizations that offer more general IT training opportunities. Continuing education and certification are essential to remain competitive in an ever-changing industry.