Outsourcing

August 7, 2024

6 Reasons Why Some MSPs Are Expanding, But You’re Not

Nestor Ong

Nestor is a content writer for STAFFVIRTUAL. He is passionate about discussing social issues, teachi...

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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.

Adopting Cutting-Edge Technology

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Sticking with outdated systems may bring a sense of familiarity to your operations, but it comes with significant risks in this rapidly changing IT landscape.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:

Cloud Services

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.

Artificial Intelligence (AI)

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.

Cybersecurity

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.

Expanding Service Offerings

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.

Tried-and-True Marketing Strategies

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:

Create a professional website: Your website often gives prospective clients a first impression of your business. As MSPs already operate in the digital space, a clean, easily accessible website is a must.
Leverage search engine optimization (SEO): Google experiences 84.2 billion visits a month — an indication of the number of people searching for products and services online. Top MSPs expand their reach by optimizing their websites for search engines and improving visibility in search results.
Integrate content marketing: Content is your most valuable asset in a digital marketing campaign. Producing informative, authoritative content can help build trust with potential clients and position you as a thought leader. It also improves your SEO and drives traffic to your website.

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.

Fostering Client Loyalty

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.

Hiring a BPO

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.

Staying Agile and Adaptive

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.

8 Tips To Grow Your MSP Business Success

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.

Focus on Branding: Your brand identity is the culmination of everything your MSP stands for, and it should be instantly recognizable as yours. A strong brand identity helps customers relate to your brand and differentiate your MSP in an oversaturated market. It’s a cohesive and memorable first impression that incorporates your logo, color palette, and brand voice.

A clear brand strategy positions you as the solution to your target audience’s challenges. It communicates a consistent message across all communication channels, shaping how people interact with, and remember your business. Consider how you can differentiate your MSP from competitors and solve your clients’ problems more efficiently and effectively.
Adopt a Client-Centric Approach: As an MSP, you provide a service, meeting your clients’ needs and promoting their best interests. The most successful MSPs prioritize their clients’ unique requirements and go the extra mile to ensure they’re always satisfied with the service.

The first step to adopting a client-centric approach is to understand your clients. No two clients have identical needs and goals, so knowing what sets your clients apart can help you tailor your services. MSPs are partners, not vendors. You need to take as much pride in achieving your clients’ objectives as they do. When you show them you’re willing to offer bespoke solutions, you already set yourself apart from competitors.

Communication is the backbone of the client-centric approach. To meet your clients’ needs, you need to know what they want, and when. Foster transparent lines of communication from the outset and set yourself up to respond to client requests quickly and decisively.
Invest in Employee Training: Agility is another cornerstone of MSP expansion. For your MSP to remain agile, your whole team must have the skills to adjust quickly to changing markets. Try and adopt a culture of continuous learning and provide training to your team to keep them skilled and competitive.
Regularly Update Your Services: Your clients likely experience rapid changes in their industries, and they must maintain the same levels of agility to remain competitive. The most successful MSPs keep their finger on the pulse of their clients’ needs, expanding and changing their services to stay relevant and meet market demands.

Look for gaps in the market where you can relieve potential clients so they can focus on their own business growth. For example, many businesses commit considerable time and money to boost their cybersecurity profiles in-house. If you can take on their cybersecurity, you provide a more cohesive service while relieving them of the anxiety associated with protecting their own digital assets.
Improve Your Customer Support: In today’s globalized, digitized business landscape, people expect excellent customer support. To provide it, you must create an environment where your customers feel heard and valued. You must also solve their problems quickly. Around 70% of U.S. customers consider the same day an acceptable response time. In digital terms, it could be even less.

A massive 71% of customers expect personalized interactions, which means taking the time to understand their challenges and react immediately. They also want to communicate where they feel comfortable, whether that be online or on the phone.

Your existing customers are your most valuable asset regarding customer support. Open honest channels of communications and ask them where you can improve, so you can integrate their feedback into your customer experience strategy.
Leverage Data Analytics: Harnessing the power of data can enhance your decision-making and improve your overall business operations. Data analytics provides valuable insights that can change the way you do business. You can leverage data in real-time to make better decisions and discover new growth opportunities. Data analytics tools and processes can position you as a leader in an already competitive market.

Access to real-time data also makes you more agile in the face of change. You can analyze past project data to correct failures and mitigate risks. With this information, you can minimize the effects of delays and disruptions, freeing up your team to focus on diversification and revenue generation.
Engage in Industry Networking: Building connections with other MSPs and industry leaders can open the door to unprecedented growth opportunities. It gives you the opportunity to collaborate and share with others in the industry who may have experienced the same challenges. In communicating with your peers, you can avoid some common pitfalls and access successful strategies that other MSPs have used to expand.

Look for opportunities to attend industry events, conferences and seminars so you can engage with your peers and stay updated on industry trends. Over time, your network can lead to partnerships and referrals, supporting your growth and boosting revenue.
Use a BPO Company to Outsource: To expand your MSP, you need the time and space to focus on your unique selling points (USPs). You can only diversify your offerings if you can expand your existing IT services expertise. Instead of limiting expansion by managing every aspect of your business in-house, you can boost productivity and reduce costs by outsourcing administrative and customer service tasks.

Working with a BPO company takes the pressure off your MSP to handle every aspect of the business, freeing up your time and resources to focus on business growth. Partner with professionals who specialize in areas like customer service and administration so that you can focus on standing out from competitors and reallocate your resources for strategic growth.

Expand Your MSP With STAFFVIRTUAL

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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