The 3 Questions That Can Save MSPs Money... And Frustration
By Scott Tyson, Director of Sales, Mailprotector
One of the biggest issues facing any new or existing managed services provider (MSP) today is determining which direction to go next. Many end up asking themselves a variety of questions relating to their products, relationships and employees; all in an effort to map out their organizations’ long-term strategies and improve their overall success. That’s what good entrepreneurs and other business professionals do.
That process is not much different in the MSP community. The questions they ask try to identify inefficiencies and potentially costly issues, or anything else that could impede the growth of their businesses. Answers may be easy to come by, simple inquiries of staff members or customers, or details that may require a little insight from outside professionals or neutral observers. It’s not rocket science, but MSPs do need to do their homework to ensure the information uncovered during these discussions is both accurate and valuable.
In fact, the answers to just three questions will often tell providers whether they’re either on track with key business goals or need to seriously rethink their strategies:
- How do I choose the right products?
MSPs should be asking this question on an almost daily basis. The simple fact is that having the right portfolio for their existing or targeted customers means more sales and growth opportunity. But how do they ensure that happens? By ensuring (1) the product fits an immediate need for the client and (2) that the market for that offering has growth potential. For example, cloud-based security is in high demand, with Gartner recently stating that, by the end of 2015, roughly 30 percent of all security controls in the SME market will be delivered virtually. Choosing the solutions that best suit your business, your chosen target market customers and your organization’s skillset is crucial. Following those guidelines allows your team to understand its strengths as well as potential gaps. That information will help you augment your portfolio to better differentiate it from the competition, and gain more new customers as a result.
- How do I choose the right vendor?
Some vendors can be more difficult to work with than others, and their solutions can be extremely complex to manage as well. MSPs have to realize certain suppliers may not be right for certain customers. Some points to consider when choosing vendors include:
- New partner training and on boarding: Does their process work for you and your customers?
- Expertise levels: Can your team sell, install, and support it?
- Geographic/vertical limitations: Will a prospective vendor limit your sales to existing customers or can you bring on new clients and expand into different markets?
- Partner program: Does the supplier provide sales and marketing materials, and offer lead generation and access to co-development funds?
- Quantity discounts: will your margins increase as your grow your business?
It’s important to choose vendors you can develop long-term, profitable partnerships with. The companies you speak with should always spend time qualifying the fit between both organizations, as well as with your customers. Be sure to review how their specific solutions can make a positive impact on your clients as well as your own business.
The right vendor should be experienced at delivering solutions to your market, from both a vertical and company size perspective. While an enterprise-focused vendor could have a great solution, the learning curve can be painful if you cater primarily to small and medium sized businesses.
One of the costliest mistakes an MSP can make is to choose the wrong vendor. If a supplier isn’t a great fit, you will waste your company’s most valued resources: time, money and energy. You have to educate the sales, marketing and technical teams on a new solution and its associated processes. It will have to be rolled out to customers and promoted to prospects. If it fails to catch on, or the features and support aren’t aligned with your clients’ true business needs, all those resources will have been wasted.
Make sure you spend an adequate amount of time vetting your vendors before signing partnership agreements. Check their channel references closely by talking with peers and industry experts (those without a vested-interest in the supplier). That’s an exercise MSPs simply MUST do.
- Do I have the right team?
Having the right products and vendor partners in place is great, but you still need good people to sell, market and support these products. Without those resources in place, it will be hard to profit from any of your relationships.
As your company grows, make sure everyone’s activities and responsibilities are adequately outlined. Know who can perform which tasks, and constantly review workloads. Determine if and when external resources (contractors) or new hires will be required. An effective employee recruitment plan can be the key to success, as long as it’s properly executed.
Having positive answers to all three questions will not make your company instantly profitable; but it can ensure your team is on the right track. Can you respond affirmatively to each? If not, dig deeper and ask how improvements in these three areas could make a difference in your company’s outlook. With the right products, vendors and team members in place, your prospects should be quite positive.