The Top 4 Attributes Of Successful MSPs

By The Business Solutions Network

How many of these traits does your managed services practice emulate?

A lot of the advice offered to managed services providers (MSPs) is focused on ways they can differentiate themselves from their competitors. For this trend article, however, we wanted to take a look at the other side of that coin and ask: What are the top attributes shared among the most successful MSPs? Industry experts from CloudRunner by Dell, ConnectWise, RapidFire Tools, and SolarWinds N-able had important insights to share on this topic as well.

Attribute #1: Be A Planner — Not A Reactor
A common challenge shared by a majority of MSPs is that they are so busy working in their businesses, that they neglect working on their businesses. “The most successful MSPs, however, make the time to step back from their day-to-day routines,” says Darrin Swan, CEO of CloudRunner by Dell. “This allows them to do a self-assessment on where they are, where the market is, and where they want to be.”

To ensure they make the best decisions for their businesses, MSPs have to know the metrics surrounding their sales and operational costs, says Frank Colletti, VP of sales, SolarWinds N-able. “The most successful MSPs look at their books regularly, and they are well aware of their operating income and gross margins, as well as the profiles of the types of customers they want to attract.”

One point of caution for those looking to improve in this area is to avoid moving too fast. “MSPs need to be careful that they do not alter their path without first seeing where they are headed, then getting colleagues on board,” says Mark Sokol, director of marketing at ConnectWise. “Also, be careful of keeping employees who are not willing to change. Give them time, but if they cannot make the transition, it is worse to keep them.”

Attribute #2: Develop An Industry And/Or IT Focus
When any business is in its startup phase, it’s normal to accept whatever lead one can acquire. However, the most successful MSPs quickly transition out of this phase and establish sales guidelines. “Successful MSPs have a focus on an industry, an area, and/or an offering,” says Sokol. “This focus allows them to standardize, which reduces the need for knowledge workers to cover so many different areas.” Plus, there are a couple of additional benefits that come from having a focus, such as being able to invest in employee training and education. “And, when employees feel that they play an important role in this process and that their employer cares, they work harder,” says Sokol. “Additionally, when you’re focused on a specific industry or offering, you can more quickly gain knowledge and expertise compared with IT generalist companies.”

Attribute #3: Nurture Peer, Vendor Relationships
While it’s true that rugged individualism is a big part of America’s history, the most successful MSPs recognize the value of networking, say the experts. “Becoming a top MSP requires a cultural change for most companies, and the only way to do this is by first nurturing strong relationships within one’s company and extending that relationship to one’s peers and vendors,” says Mike Mittel, CEO of RapidFire Tools. SolarWinds N-able’s Colletti concurs and adds, “Joining a peer group or user group to gain an understanding of what’s happening with other MSPs in your industry is invaluable. You can learn from their successes as well as their mistakes.” Be mindful not to get too much of a good thing, however, advises Colletti, by finding and sticking to one high-value group instead of bouncing around too much. “The best peer groups should be conveniently located near your headquarters, and there should be a common expertise among the participating members,” he says.

In addition to learning from one’s peers, vendor and distributor relationships play a vital role in MSPs’ success. In fact, on page 22, MSP Zobrio talks about how building a close relationship with its managed security services vendor played a key role in Zobrio’s 18 percent revenue growth in 2015. “By doing more business with our closest vendors, we can add greater efficiencies to our operations and offer more competitive prices to our customers,” says John Quatto, the MSP’s channel partner manager. In addition to the various IT services Zobrio resells from its managed security services vendor, it uses the following complementary services:

• A 12-month, five-step success plan that helps it achieve monthly, quarterly, and yearly revenue milestones.
• On-demand business and technical training that helps the MSP onboard technical staff. It also includes best practice tips and discussion on sales, marketing, business, and channel operations.
• A knowledge base that includes frequently asked questions and information for troubleshooting issues.
• User forums that feature community engagement for learning and networking with peers.
• Ready-to-use sales and marketing materials that can be used for selling specific managed services offerings.

Attribute #4: Use Assessment Tools To Prospect, Upsell
One of the biggest challenges for MSPs is articulating their value to prospects. This becomes even more difficult when the MSP’s value proposition is conveyed from a low-level influencer at an end-user company to the final decision maker. “The top MSPs use assessment tools to make their jobs a little easier,” says Mittel. “A good assessment tool can collect key metrics from a prospect’s network in a matter of a few minutes and present the findings in a format that’s easy for a prospect to digest. For example, instead of using text alone, an effective assessment tool will incorporate charts, scales, and other graphics that allow a reader to quickly see security vulnerabilities and other areas in need of repair.”

Not only can assessment tools be used to shorten the sales cycle, but they also can be utilized to build long-term customer relationships, say the experts. Zobrio, the MSP mentioned earlier, uses its RMM (remote monitoring and management) and assessment tools to generate quarterly reports, which the MSP reviews with its clients. One of the recurring problems Zobrio was running into was having customers question why they had to continue paying the MSP each month when there weren’t any problems and everything was working just fine. “We had one customer who had 6,000 incidents over the course of a year and 95 percent of those problems we were able to resolve in less than one day — without them even being aware of it,” says Quatto. Implementing the quarterly reports solved this problem.

A Word Of Caution About Moving From Managed Services To Cloud Services
If there’s one common theme that every MSP can relate to, it’s the fast pace with which technology is changing. Even as IT solution providers are trying to hone their managed services skills, it’s important to keep an eye on the trend of IT infrastructures, platforms, and applications moving to the cloud. This transition leaves MSPs with fewer resources that they have to manage for their customers. “To remain relevant, MSPs have to develop strong business value propositions rather than relying on their technical value propositions alone,” says CloudRunner by Dell’s Swan. “The ones we see having the most success with this transition are those who develop expertise in regulated markets such as healthcare or legal, and they can speak the same language as the executives in those verticals. Fewer customers today care about buying a specific technology than they do about buying solutions and services that can help with their productivity. The MSPs that embrace this are the ones that will be most successful in the long run.”