Five Ways to “Super-Size” Your Managed Services Practice

By N-able Guest Blog 2

No, I am not a fan of the mega fast food chain. But I’ll borrow their “super-size” terminology to make this point. The best MSPs in the world are the best because they are not afraid to super-size their businesses. They set a vision, map out a plan and work hard to get the right people, processes and platform in place to make it happen. 

Here are five of the top ways our MSP partners achieve sustainable success:

1. Set Measurable Goals

What are you trying to accomplish this year? When setting goals, the answer to that question is not as simple as it seems. Stating that you want to grow your business in 2014, for example, isn’t an effective goal if it’s not backed by measurable objectives. A better goal might be “to convert 40 customers to our managed anti-virus solution by the end of Q2.”

It’s also important to come up with several supporting objectives for each goal, such as “to identify all customers with an AV renewal coming up in the next three months” or “to initiate a call campaign to book initial meetings with target customers by June 30.”  To succeed and keep your goals fresh, review them regularly and measure and update them. If the business side of your practice doesn’t come naturally to you, focusing on goals in this way can make you more accountable and more successful.

2. Sell The Right Services

Being systematic about the way you evaluate your managed services portfolio will allow you to identify what’s working and what’s not for your business. For starters, review each offering in detail from a profit and loss perspective. Be objective and consider whether the associated time, resources and expenses makes each one individually successful. Next, ask yourself, “if you are delivering on your sales message — are you serving your customers in the way that you committed to serve them from the start?” Your ability to stick to your commitments is very important for building trust and driving customer retention.

Also, to maximize your options for addressing customers at every level of managed services adoption, it might be in your best interest to play the field when it comes to your offerings. For customers who are just getting started, make sure to have a range of a la carte services in your portfolio. These individual offerings – whether for backup and recovery, AV monitoring, or something else – are ideal for allowing the customer to get their feet wet in managed services. If they like what they see, they’ll expand their business with you.

The next level up is to offer a more proactive solution involving remote management and monitoring (RMM) for maintaining key systems and preventing unwanted issues for your customers. Then, there are fully-managed services, where complete systems management and maintenance is offered for a single monthly price. In addition, a number of cloud services can also be brought into the mix to support the customer’s entire IT environment or at least critical components of it.

Lastly, there are supplemental services, which are targeted at organizations with an internal IT department already in place. Depending upon what the company’s IT department needs help with or what they want to hand over, MSPs can offer managed monitoring, outsourced help desk services, project and implementation support or other custom services.

Addressing the needs of all your customers and prospects puts you in the position to capture more business. It won’t make sense for every MSP to cover the full spectrum, so consider your customer base and target market and decide what best meets their needs.

3. Capitalize on Your Customer Base

The first step in understanding whether or not you are capitalizing on your installed base is to profile your customers by gathering key information about their specific needs. Next, take it further and segment them based on common requirements and vertical markets. Finally, determine your market penetration for specific services. For example, find out how many customers leverage your managed anti-virus solution or how many customers subscribe to your fully-managed program. While this may sound basic, it’s common knowledge that selling to existing customers is far easier and less costly than identifying new customers, so having clear insight into the opportunity gaps will set you up for improved growth.

4. Pricing and Profitability

Establishing pricing for each of your services isn’t simple and it involves looking at everything from labor and management tools, to administration and gross margins. Labor for MSPs includes preventative maintenance, remediation, consulting and end-user support; management tools primarily consist of RMM, professional services automation and ticketing; and administration includes actions such as billing, reporting and account management. And then there’s gross margin, which, at its core translates into how much money you are actually bringing in over and above your costs.

All of this points toward developing a standardized pricing system along with an anticipated gross margin for each of your offerings. To increase profitability, you’ll need to implement a tracking system to test assumptions and measure actual performance against assumptions. Leveraging automation to reduce labor requirements, through MSP-optimized tools such as N-able’s N-central Automation Manager, also contributes significantly to profits and is becoming the most important way for MSPs to drive growth and success for their businesses.

5. Sales & Marketing Strategies and Pipeline

New business doesn’t just appear out of nowhere. You’ve got to have effective sales and marketing strategies in place to fuel a pipeline of opportunities, and your strategies can change week-to-week or even month-to-month. That’s why ongoing analyses should be performed to ensure what you have in place at any given time is on target. This entails looking at how many calls were made, how many new business meetings were conducted and the types of opportunities you are pursuing, along with creating status reports on outstanding proposals.

When evaluating your target performance, compare actual revenue vs. target revenue or conduct a win/loss review. By regularly analyzing your track record across all opportunities, you’ll not only get a better picture of what it takes to win new business, but you’ll also gain insight into why you might be missing the mark.

The above considerations represent just a handful of the actions we advise our N-able MSP partners to take as they seek to grow and thrive in their businesses. After more than 10 years in the industry, we know first-hand that those MSPs who focus equally on both the business and technical sides of their practice are putting themselves in position to win.

Mike Cullen is vice president of worldwide sales and business strategy for N-able by SolarWinds. He brings over 20 years of corporate sales experience to his MSP customers, and has assembled an equally experienced sales force. Prior to joining N-able, Mike was vice president of sales (Ottawa Branch) and interim president of the Québec region for IKON Office Solutions. He grew the Ottawa business to $24 million in just five years, resulting in the Ottawa office’s recognition as the branch office of the year in 2000. Mike joined IKON in 1995 as a result of an acquisition of Fulline Office Products, an office equipment company Mike co-founded in 1988.