Every successful MSP is built upon valuable, reliable services. The trick is learning to stand out in the sea of service providers. What differentiators will help bring more customers in the door, and help you maximize the lifetime revenue you can earn from each customer?
Winning more MSP business
As a partner to dozens of MSPs, we've seen some succeed and others tread water. We've boiled down our observations to help you out.
Understand your customers: key motivators and pain points
We've written before about using the customer journey to win more business. This techinique involves picturing the entire experience of a customer interacting with your organization – from the initial introduction through becoming to happy customer. This can help you understand your potential customers' motivation and find more impactful ways of engaging with them at various points in the relationship.
Position your team as cloud experts
Your leads and customers are already bombarded with cloud propaganda. Some are already comfortable in the cloud using technology to get work done; others are mystified and probably, frankly, fearful.
They might even be using tools that you are not official supporting, things like Dropbox and iCloud. Your clients are going to the cloud, and you should lead them.
We recently came across an illuminating infographic that illustrates the breadth of the Office 365 offering. It's not just Word and Excel! Depending on the plan, end-users have up to 22 business applications available as part of their subscription!
It's important to position yourself as part of the solution. How are those end users going to know how to make sense of those 22 applications without you to guide them?
Provide results-oriented business support
A recent Avaya article identifies ‘focus on customer performance and growth’ as a trait of a world-class services provider.
To help customers perform and grow, you need to offer IT solutions that in service of the larger business objectives. Your customers don't just want network and hardward support, they want effective IT solutions to business problems.
This is the magic key to breaking away from being perceived as a commodity (based on who has the best price) to a trusted partner providing a valuable business solution.
Boosting Recurring Revenue
Constantly riding a revenue roller coaster was a predictable consequence of the old break-fix approach to IT services. But with newer, proactive managed services model, you can generate monthly recurring revenue while your clients come to view you as a steady, necessary requirement of doing business, just like electricity and salaries.
With reliable recurring revenue, you are in a better position to plan and budget for your own success. Let's explore a few options for making the most of this approach.
Maximize customer lifetime value
Customer lifetime value (CLV) or life-time value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer.
We'll leave it to others to explain how to calculate lifetime value, but there are 2 big stand-out points to be made. You can really move the needle if you maximize:
- Customer expenditures per month
- Customer lifespan - how long they remain a customer
By offering impeccable service and including valuable add-ons that help meet their business needs you can keep customers in your higher-end packages for months and years at a time.
Institute an effective customer retention and satisfaction strategy
One of the most effective ways to boost lifetime value is through customer satisfaction. The more satisfied they are with your service, the longer they are likely to stay with you and the more they are likely to recommend you to others.
Research has also found that a 5% increase in customer retention can increase profits by 25% to 95%. It's worth putting in some extra effort to keep a customer with you in the long run (especially considering the high cost of finding a new customer to take their place).
Ensuring that your customers are getting real business value out of the tech solutions you are putting in place is an obvious satisfaction boost. Be sure that user adoption plays a role in your recurring revenue strategy.
Align with innovative partners
As you build out your own team's core competencies, it's important to supplement that by choosing industry-leading peer networks, distributors and vendors to partner with.
Let's bring it back to the Office 365 example: have you seen the Office 365 Roadmap? Find a partner who can provide training-as-a-service and support for those never-ending updates, month after month, while you maintain your customer base, provide core IT services and monitor the IT landscape.