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5 Tips For Small MSPs To Increase Sales And Compete Against Bigger Businesses

Updated: May 2, 2023

5 Tips For Small MSPs To Increase Sales And Compete Against Bigger Businesses

Image Credit: WWE

Find out five tips on how to build a managed services business. Become the MSP that can compete against the bigger businesses and continue to increase sales and earn more profit.

What Are Managed Service Providers (MSPs)?

Managed service providers or MSPs are businesses that deliver services in the form of network, application, infrastructure, and security. They do it through support and administration tailored and customised specifically to the needs of the customers. Traditionally, the term ‘MSP’ was limited to infrastructure or device-based services. However, in 2021, MSPs also cover the day-to-day management, maintenance, and support as well.

Here Are 5 Tips For Small MSPs To Increase Sales

Move From SLAs To XLAs

sla to xla credit Raf Celis - Twitter

XLA Canvas – Credit: Raf Celis/Twitter

Traditionally, MSPs kept themselves limited to delivering on the services that were agreed upon between them and their customers. The aim was to deliver a high-end output of the particular service level agreement they were hired for. This was regardless of whether or not these SLA outputs satisfied the needs of the end-user. 

Due to the feeling of not getting value for their money, unsatisfied customers take away their deals from big MSPs. Now, they have started diverting their resources towards smaller businesses that pay attention to enhancing their experience. They focus on the outcome – not output – of the customer’s business through experience management, which ensures customer satisfaction and higher chances of loyalty.

If you are a small-scale MSP hoping to compete against the big fish, make an effort towards converting your Service Level Agreements into Experience Level Agreements and we can help.

Automation Is A Must

According to a 2019 research, the most successful MSPs in the world had less than 10 employees. Despite the small staff, these businesses managed their sales, marketing, support, and administrative tasks efficiently. Additionally, they excelled at managing their clients’ requirements and tickets without any hassle. But how is that even possible?

Modern MSPs have managed to automate tasks that require repetition with the hopes of helping their staff members focus majorly on the core duties aimed towards the growth of their business. For instance, having a well-developed chatbot look after the customer’s mundane issues and FAQs can cut operational costs up to 30%. According to another research in 2020, over 85% of customer interaction will be handled without any human intervention in 2021.

Adjust Your Prices And Services

The market for MSPs is highly competitive and it is only going to get tougher with time. Therefore, adjusting your prices by bringing down your cost per good sold can give you a competitive advantage against bigger customers.

However, lower your prices across the board may not be the most viable option. After all, it is a business and you would want to make profits at the end of the day. Hence, another way to adjust the prices could be to establish multiple tiers. For instance, prices on the basis of the number of users or devices you will be delivering services for.

MSP Hyper-specialisation

As a smaller organisation, you may wish to create a niche in the kind of services you may specialise in or the kind of technology you would use in enhancing the outcome of your potential customers. Narrow down your service range on the basis of your target client’s sub-industry, business line, geography, and sector, for instance.

Potential buyers tend to trust MSPs more when they see that they have the expertise in the kind of products and services they need to address. If you create a strong niche, it helps the customers justify the kind of money they will be spending on hiring your firm.

Customer Retention Is Key

While it may seem obvious, the statistics on customer retention are startling and good enough to dishearten any MSP, no matter how big or small it is. According to a 2019 research conducted by Analysys Mason, only 38% of MSPs across the world were able to report satisfied customers. As mentioned earlier, the biggest reason for such a level of dissatisfaction is the lack of positive impact on their outcome regardless of how efficient the output delivered by the MSP was. 

Figure 1: Percentage of MSPs that track different types of KPIs

percentage of MSPs that track different types of KPIs - bright horse

This is known as the Watermelon Effect in which the SLA metrics remain green on the outside signifying good output by the MSPs. However, the insides remain red which signifies dissatisfied customers due to little to no impact on their outcome.

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