Five ways MSPs can flourish in a fast-growing market

While some MSPs are struggling to keep up with the pace of customer demand, others are confidently seizing new opportunities and strategically planning for sustainable growth. Greg Lalle, VP, International Sales & Strategy, at ConnectWise examines how MSPs can thrive and survive in the face of rapid market evolution.

There’s no denying it – it’s a great time to be a managed service provider. Demand for managed services is increasing at an exponential rate and those providers that are prepared to meet these needs are capitalising on the burgeoning opportunities in a big way.

According to analyst firm Research and Markets, the IT managed services market is projected to hit US$257.84 billion (€221.20 billion) by 2022 at a CAGR of 11.1% with demand being driven by the growing popularity of cloud computing initiatives, heightened cyber security concerns, growing compliance requirements and the increasing complexity of IT environments.

Little wonder then that MSPs are scrambling to respond with innovative ways to help customers and, in the process, seize new opportunities for revenue growth.

But with so much to play for, it’s clear that some MSPs are better prepared than others when it comes to converting such openings into a sustainable growth trajectory.

Are you confident about the future?

Indeed, 43% of the MSPs surveyed for our recent state of the market report Managed services: the winners and losers in 2018 say their organisation is already running to keep up with the current growth in customer demand. Meanwhile, 42% admit it’s proving difficult to identify the right solutions to offer customers.

By contrast, members of an MSP peer group – an international collection of over 500 managed service providers who consistently measure their performance against the Service Leadership Index (SLI) – appear much more confident about their ability to build a better future.

Almost two-thirds (65%) say they’re confident they’ll be able to take advantage of upcoming opportunities to increase market share, expanding their businesses as customer demands evolve.

So, what does it take to be a winner in a burgeoning market where staying ahead of the growth curve depends on optimising performance, handling price pressure and seeking out value-creating solutions?

  • Deliver more than just a managed service

MSPs that are thriving and surviving go beyond building their business models around technology alone in their desire to offer customers more.

Determined not to fall down a technology rabbit-hole, they’re investing time and energy in understanding exactly how customers interact with their services and upgrading their offerings accordingly.

As a result, they’re initiating value-add services that play well with customers. Indeed, our research shows they are more likely to offer on-site visits, remote management, consulting services and out-of-hours support.

By moving up the value chain, they’re becoming trusted solution partners that customers rely on for the long-term.

  • Make informed choices

While some MSPs are scrambling to launch a plethora of new services that will potentially stretch current operational resources to the limit, others are taking a more measured approach and evaluating their existing service portfolio with a more appraising eye.

Aware that selecting the wrong strategy for their next act will potentially jeopardise future profitability, they’re using customer insights to determine if their current services and strategy are sufficient and where refinements should be made in response to market needs.

Whether that’s putting the focus on developing an offering that truly scales to serve many customers and consistently delivers revenue or tapping into new customer segments or geographies.

  • Streamline operational capabilities

With the race to the top becoming more intense, MSPs are under pressure to assign resources, expand their service delivery options for sustainable growth, and, all the while, ensure their services are competitively priced.

Clearly, doing more with less is the name of the game for MSPs with their eye on the long game. To achieve this goal and deliver exceptional service more efficiently, these solution providers are utilising automation tools to streamline and manage every customer touch point and interaction, maximise employee utilisation and gain visibility into every aspect of their business.

For these players, reducing costs and improving efficiencies – without compromising the customer experience – is a sure fire ‘stealth growth’ strategy

  • Sell more, sell smarter

Winners know which services and customers are the most profitable for their business and leverage this information to determine when, where and how effort needs to be expended to maximise the bottom line.

But that’s not all. Because they take the customer experience seriously, they’re more likely to be able to satisfy the needs of customers today and more effectively predict the next service requirement an individual customer will need down the line – and proactively tailor their offerings appropriately.

  • Prioritise the customer experience

Nearly all (96%) of MSP peer group providers say they view the customer experience as an important measure of success, with over a third (35%) viewing it as the most important criteria for evaluating the success of individual services.

Greg Lalle

By focusing on delivering frictionless customer journeys, they’ve ensured customer satisfaction levels remain high even during periods of fast-paced service transformation. Indeed, improving the customer experience is the number one priority for 61% of these providers, who are determined to ensure they don’t become complacent in the face of revenue growth.

It’s clear that winning MSPs focus their time, energy and resources on identifying where growth resides, utilising customer and operational insights to identify revenue and value creation opportunities.

It’s a customer and market-centric approach that enables the granular growth of service portfolios while putting the nuts and bolts of business basics first – typically, these MSPs monitor and measure performance across the business so they can re-allocate resources fast in the face of commercial realities.

Finally, it may not be a coincidence that these providers have set a high bar for achievement over the next three years. Strategically managing their portfolio and operational resources to achieve their vision.

The author of this blog is Greg Lalle, VP, International Sales & Strategy, at ConnectWise.

Comment on this article below or via Twitter: @VanillaPlus OR @jcvplus

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