MSP Strategies For Thriving In An Uncertain Business Environment
By Lil Roberts, Xendoo
During the COVID-19 pandemic, managed service providers (MSPs) have been at the forefront of supporting businesses as they migrated to remote working at scale. While effective IT managed services are in high demand now, MSPs, like most every other industry, are experiencing the impact of a downturn as customers reduce or shut down operations. Datto’s Global State of the MSP Report, based on a survey of more than 1,800 MSPs around the globe, found that before the COVID-19 pandemic, MSPs were expected to grow by 17 percent. The report noted that this outlook changed after the start of the pandemic with 40 percent of MSPs expecting to reduce their growth projection by at least 10 percent.
Now, most MSPs are determining how they want to evolve and adapt post-COVID-19. A survey by Altaro Software gauging the impact of COVID-19 on MSPs and their response to the pandemic found that 50 percent of survey respondents had a post-COVID recovery plan in place. The survey of more than 180 MSPs worldwide revealed that expanding product/service offerings and improving services were the top recovery plan strategies cited by survey respondents.
As MSPs execute recovery plans, they also will need to develop strategies for deepening customer relationships and differentiating themselves in a crowded and challenging post-pandemic business environment. To survive and thrive from here on out, MSPs will need to:
- Demonstrate Value
The transition to remote working at scale drove demand for IT support and services during the pandemic. To meet this demand, 66 percent of MSPs reported going the extra mile to support their customers during this time, according to a survey by SolarWinds. As the economic fallout from the pandemic continues, MSPs will need to continue to execute at a high level and demonstrate their value proposition to clients. Frequent and open communication with clients will build transparency, which then builds trust. MSPs also can increase transparency through client reports by making sure that reports are honest and include key performance metrics. This will not only help improve the client relationship but provide an opportunity to highlight the value of the service provided and how it delivers ROI.
- Personalize Services
Personalization, a major force in the consumer space by virtue of companies like Netflix and Amazon, is also becoming an imperative in the B2B space. Companies have an increasing expectation for personalization and customization. To deliver on this expectation, MSPs should consult regularly with clients to gain insight into their needs. This will allow MSPs to tailor services to meet client needs, which can generate bottom line impacts of boosting sales and reducing churn.
- Develop Loyal Customers
MSPs also can develop loyal customers by offering strategic technology advice and guidance that will position them as a trusted advisor to their customers. MSPs should not leave any stone unturned to deepen customer relationships and engender loyalty. Find ways to be an extension of the client’s team by providing a direct phone number to someone who can help with any issues, step up client interactions, listen to feedback to better align services with client needs, and more. As clients look at cutting back IT services to deal with the economic realities of the pandemic, this loyalty will make it more likely that their relationship with their MSP remains intact.
- Stay On Top Of Business Health
The business uncertainty of the pandemic and post-pandemic environment could translate into declines in revenue for some MSPs. The Altaro Software survey found that 27 percent of MSP respondents expected revenue and staffing business performance to decline, and of these respondents, 59 percent expected a decline of 21-40 percent.
As the pandemic triggers the cancellation of contracts, services downgrades, or non-payment for services, monitoring overall business health will be critical for MSPs. They can use the data and analytics provided by cloud-based accounting platforms to make more informed business decisions in an environment of uncertainty. These platforms connect into bank account and credit card transactions and can help MSPs track expenses and cash flow, providing a clear picture of financial performance.
MSPs can use all of the strategies outlined above to ensure their businesses not only survive but thrive during the pandemic and beyond. Deloitte noted that the goal for technology companies “shouldn’t be merely to bounce back after governments lift the lockdowns. Tech companies have the opportunity to emerge stronger, more resilient, and more innovative.”
About The Author
Lil Roberts is CEO and founder of Xendoo, a cloud-based fintech company based in Fort Lauderdale that specializes in online bookkeeping and accounting focused on the small business owner. Lil is a serial entrepreneur with a passion for small business and is known as an innovator with an enviable ability to foresee market trends.