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Revenue in the managed services market is expected to reach $24.68 billion in 2024 and continue climbing. Dynamic, diverse frontrunners will claim the largest market share. The IT industry has seen significant changes in recent years, deepening the divide between successful and struggling MSPs. In short, some are thriving, while others are falling behind.
Understanding the difference between MSPs that thrive in the new landscape and those playing catch-up is essential to regain a competitive edge. In this article, we’ll explore five primary reasons why some MSPs are pulling ahead and provide actionable tips to help you catch up, build your business and remain profitable in the face of change.
The pace of technological change is faster than at any other time in our history. MSPs already operate in a technology-rich landscape, and those that are growing are quick to adopt the latest technologies. Customers expect more from their MSPs, and demonstrating your agility is essential to stay at the top of your field.
Many of the most successful MSPs expand constantly, integrating innovative technologies to ensure they always provide customers with the best possible service. A recent case study shows that MSPs that have leveraged technology to gain a competitive edge have experienced a 30% increase in new client acquisition and a 70% reduction in operational expenses.
Sticking with outdated systems may bring a sense of familiarity to your operations, but it comes with significant risks in this rapidly changing IT landscape. Legacy systems make an attractive target for cybercriminals, and can lead to data breaches, data loss and compliance challenges. Some of the most critical technologies MSPs are integrating to maintain a competitive edge include:
The cloud has revolutionized offsite backup and recovery, eliminating the need for expensive hardware purchase and hosting. The cloud offers storage, networking, applications and many other advantages. Integrating cloud services allows you to cater to the growing demand for cloud services, and support cross-selling opportunities with existing clients. The shift from on-premises to cloud, combined with increasingly complex technology, is driving the demand for MSPs across industries. Adapting to this market shift presents a unique opportunity for growth and profitability.
AI has become an invaluable tool in managed services, allowing MSPs to streamline workflows, automate repetitive tasks and enhance decision-making with real-time data. AI algorithms allow you to organize and retrieve information in a fraction of the time, so you can resolve client issues faster and provide them with real-time information to inform decision-making.
You can also leverage AI to automate the monitoring of IT infrastructure, allowing you to respond to events in real time. You can adjust resources based on demand fluctuations and respond immediately to security threats, maintaining a more stable and secure system for clients. In the same way, you can automate service request management, including ticket assignment, tracking and status updates.
Only 4% of organizations feel confident in their cybersecurity, and a massive 93% expect to increase cybersecurity spending over the next year. This upward curve presents considerable opportunities for MSPs to expand. Many businesses would rather outsource the protection of sensitive information to experts with robust capabilities.
Training existing team members to specialize in areas like cybersecurity and compliance places MSPs ahead of the growth curve, allowing them to attract new clients seeking these specialized expertise.
To expand your MSP, you must diversify your services to meet changing customer demands. Many leading MSPs began by specializing in one niche area. Over time, they have integrated new skills and expertise to prevent their clients from seeking out more comprehensive services from competitors.
Expanding your MSP portfolio not only leads to significant growth, it cements your reputation as an industry leader and gives clients confidence in your ability to handle various challenges. Increasing the scope of your current services or branching out into new markets is an exciting opportunity to increase revenue with new and existing customers. Even small MSPs have options through outsourcing some responsibilities to reliable partners, including helpdesk requirements.
While MSPs have focused on servers and basic support in the past, integrating applications and integrations are nonnegotiable for MSP expansion. The most competitive MSP offers these value-added services to stay agile in the face of change and attract growth minded clients.
Internet users spend six and a half hours online every day, and MSPs experiencing rapid growth have a strong online presence and brand reputation. As the need for managed services grows and the market becomes crowded, you must find a way to stand out from the crowd. Leveraging digital marketing has proved successful for rapid growth in the managed services industry, and many of the most effective marketing strategies include:
In a rapidly expanding digital landscape, neglecting your marketing strategy comes with significant costs. For your MSP to expand, you need a cohesive and visible online brand that positions you above competitors. It’s the most valuable method to communicate your skills and experience, and without it, potential consumers will gravitate toward MSP with a proven, professional online presence.
Attracting a new customer can cost you 7-10 times more than maintaining an existing relationship. When your clients’ trajectories no longer align with yours, or they no longer feel you’re engaged in a trusting partnership, you risk stagnation, high client turnover and the associated financial losses.
Successful MPS invest in building strong client relationships through attentive customer service. The key to expanding an MSP is prioritizing client satisfaction through personalized service and regular communication.
Long-term relationships are the foundation of sustained success. They provide a consistent revenue stream, and as you expand your services, potential for upselling and cross selling. Building these relationships requires a strategic approach and a culture of continuous improvement.
Take the time to understand your customers and their unique needs, so that you can personalize your customer service approach on a case-to-case basis. Engage with them to better understand their pain points and business objectives. When you align your services with their changing needs, you form a robust partnership that evolves alongside your mutual business interests.
The key ingredients to a successful MSP expansion are enhanced efficiency and reduced costs. Many successful MSPs have turned to business process outsourcing (BPO) to achieve these goals. As businesses expand across borders, they expect around-the-clock, multilingual support, which can drain your existing resources. Outsourcing your MSPs non-core functions frees up your staff to focus on core competencies, encouraging innovation, agility and productivity.
Many BPOs hire or operate from countries that favor the U.S. exchange rate, resulting in significant cost savings. As they perform some of your noncore functions, like customer support, you can also save on office space, call-center software and other operational costs.
BPOs can provide specialized skills and services outside of your current capabilities. They provide access to specialized expertise, cost savings greater operational flexibility, allowing you to focus on developing a competitive edge. They also specialize in customer service, helping you meet growing client demands and improving overall customer satisfaction.
The widespread integration of AI is one example of rapid market changes across industries. In a relatively short time, organizations had to rethink their offerings to remain competitive. Those with the agility to adapt quickly became the frontrunners. MSPs can expand successfully when they adopt a posture of ongoing learning, maintaining agility in a rapidly changing landscape.
Clients are looking for MSPs that can help them grow and change, and demonstrating adaptability is paramount to reaffirm your values to prospects and existing customers alike. Failure to adapt to a changing landscape can have devastating consequences. Your services can become irrelevant, and soon profitability becomes a challenge as you lose market share to your more agile counterparts.
If you want to grow and expand your MSP to reach new customers and diversify your offerings, the following tips can help you stand out in a crowded space.
In today’s changing landscape, every MSP has to work to avoid getting left behind. The most successful MSPs are already focused on growth. They’re already integrating innovative technology, diversifying their services, strengthening their client relationships and outsourcing to BPO businesses so they can focus on growth.
STAFFVIRTUAL is here to support your growth and help you perform at your best. We specialize in providing support to managed service providers, and our highly skilled and experienced support staff can provide technical support, and we’re available 34/7 to provide support services to clients. Let us be a part of your growth. Contact us to learn more about our robust and reliable BPO services today!
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