How MSPs remain competitive in an increasingly disparate market

There is no denying that MSPs are operating in a highly competitive marketplace. On one side of the market there are emerging and high-growth MSPs, and on the other side are much larger, ‘super’ MSPs. While this provides end customers with more choice and the freedom to choose their solution based on the level of support they need, for MSPs, this competition can sometimes be a threat to business growth. This is according to David Weeks, Senior Director, Partner Experience, N-able.

Traditionally, many MSPs rely on passive methods, such as referrals, for securing new business and retaining clients, but with increased competition in the market, this is no longer a sustainable approach. MSPs were some of the unsung heroes of the pandemic—while doctors and nurses were working on the frontline to keep the virus at bay, MSPs were managing mass digital migration for millions of remote workers to ensure business continuity. With such strong client relationships, MSPs need to work closely with their customers and show how they can offer value beyond their base-level service.

Ultimately, MSPs need to be more proactive when it comes to business growth. Because those that don’t will simply be left behind.

Price doesn’t trump value

For MSPs, operating in such a disparate market comes with its challenges, especially for business growth. Firstly, larger industry giants have substantial buying power, which means they can disrupt the market and affect pricing—especially when it comes to commodities such as antivirus and backup services.

Secondly, these players have sophisticated sales and marketing engines. With marketing expertise and well-trained sales teams, they can quickly pivot to new opportunities, which means they can hit a much wider addressable market.

MSPs can’t compete in the same way on price, so they must find other ways to show their value. Becoming a business consultant, and an extension of a customer’s team is one way to do this—especially if they can use the relationships they have already built as a lever. MSPs should be positioning themselves as consultants, allies, and reliable resources that have proven their worth during the past 12 months of the pandemic.

Relationships alone are not enough

While there is no denying relationships between MSPs and their customers are critically important, relying on these relationships alone, no matter how strong they are, just isn’t enough. Businesses constantly change their focus and can easily forget. MSPs need to explore new avenues where they can grow and protect their revenue stream.

Many MSPs regard themselves as suppliers of technology, but this won’t lead to long-term client retention. Ultimately, they need to become an extension of their customers—they should be involved in planning and better understand the goals and objectives of their customers’ business. 

Embedding yourself is more than just account management reports. MSPs need to make their way into executive-level strategy discussions on a regular basis. Reflecting on the pandemic is a good foot in the door.

MSPs should make a point of how they supported businesses and help draw up plans. This will position the MSP as a true consultant, advising on risk locations, mitigation, and areas for growth. For example, if a customer had grown by 20 per cent, what would be the repercussions if their operations went offline?

MSPs were instrumental in business planning and risk mitigation during the pandemic—why would they not continue to play this role in the future?

MSPs and small businesses are in this together

At the start of the pandemic, every single business had to shift to remote ways of working, and MSPs were forced to swallow costs, work overtime, and even supply services out of goodwill to be able to support this transition. MSPs were especially understanding when it came to customer support. They were at the frontline of digital migration and security in those first few months. The support they provided has created a serious bond between MSPs and their customers. But with more competition in the market, MSPs cannot rely on these relationships alone.

Ultimately, an MSP that is more prepared and embedded in their customers’ leadership will always have a step up against any rival. Along with mitigation and forward-looking planning, the MSPs that work with their customers to explore new avenues for growth—and how they can diversify their business—will ensure they remain competitive in this increasingly disparate market.

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