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The value proposition conundrum for today’s MSPs

(Image credit: Image Credit: Coffee / Pixabay)

Managed service providers (MSPs) have truly demonstrated their value during the coronavirus pandemic. Entire organizations have had to transform their business operations and support remote working en masse almost overnight, and MSPs have provided the much-needed lifeline enabling businesses to operate as close to normal as they possibly could.

But while MSPs have been able to showcase their worth during this time—whether it was helping to migrate workforces to Microsoft Teams, ensuring all employees had the right devices to work from home, moving backup systems to the cloud, and ensuring IT estates were secure—this was an exception to the norm. Typically, MSPs can sometimes struggle to show the value they bring to businesses.

Since the advent of managed IT services, some providers have struggled to show value in the same way that traditional IT providers have. A lot of an MSP’s work is done remotely (an essential element given the pandemic) and is essentially “invisible.” The entire premise of managed services is to prevent problems through remotely managed, proactive monitoring and maintenance. In this service model, best-in-class providers rarely have the need to go onsite and this can create difficulty for the MSP to show value to the customer. Current events have exacerbated this problem with even less onsite visits and interactions due to social distancing and employees no longer being in one place, the office. 

Customers are also demanding more from their MSPs, but the billing situation hasn’t changed—which means MSPs are delivering more value for less money, directly impacting bottom lines. What makes this even bleaker is that across Europe, MSPs pick up an average of three clients every two months, but lose one in the same period. To counter this high rate of churn, MSPs must find new ways of showing their value and help their customers understand why they are worth paying for.

Communicating the value proposition

Ultimately, the answer lies in communication. MSPs must ensure they are having ongoing and regular interaction with their customers—MSPs shouldn’t assume that “no news is good news.”

MSPs need to enhance client communication to better pre-empt the niggles that can turn even the healthiest client relationship sour. It’s only through communication that MSPs can truly understand how customers feel about the services they’re receiving, what they’d like to see more of, or how they can turn a negative perception into a positive.

This communication isn’t just important to ensure that clients are happy with the day-to-day running and management of a client—it’s also an upsell opportunity. Conversations will lead to insights into particular issues, worries, or bugbears of the client. From there, MSPs can add-on services that might solve or mitigate these concerns.

Security is a prime example. More and more businesses are worried about security, especially given the pandemic—how can they remain secure when their IT estates are so dispersed? Cybercriminals haven’t stopped doing what they do because of the pandemic—if anything, more cyberattacks are taking place. MSPs have a perfect opportunity here to have conversations with customers about their security offering. For many, they may assume that their MSP is providing a complete security service as part of their services. After all, they are responsible for their IT estates, so doesn’t this include protecting it? It may come as a surprise to the customer that an MSP might not be providing the service they thought they were—and will demand it right away.

For the MSP, this doesn’t need to ring alarm bells if they aren’t a specialist security service provider. They could act as a reseller of security products and add this to the backup services they already offer to provide a much more comprehensive offering—and drive revenues as a result.

Automating the value proposition

Automation represents a unique opportunity for MSPs, and will be an increasingly important tool for them to demonstrate their continued value. Monitoring customer networks, managing complex digital infrastructure, and protecting companies from cybercriminals around the clock means MSPs have to be everywhere at once. IT Process Automation (ITPA) allows MSPs to automate routine functions and give their teams a comprehensive view of their customers’ digital infrastructure, allowing them to take a more strategic and proactive approach to threats and potential issues—and as a result, can offer more counsel, products, and services. If the “invisible” work of keeping everything ticking over is mostly automated, then MSPs have more time to devote to tasks that show their value.

It also allows MSPs to ensure they’re offering the highest quality of service possible in order to retain business without adding undue strain onto staff. ITPA software can help MSP techs stay on the ball without setting unrealistic expectations.

Clearing the smoke and mirrors

MSPs have long been valued partners to their customers, and nothing has highlighted or demonstrated this more than the coronavirus pandemic. But just like businesses shouldn’t take their MSPs for granted, MSPs cannot risk taking their clients for granted. They must continue to show their value to reduce churn—they cannot rely on the goodwill from their pandemic response forever.

It is crucial for MSPs to ensure they are delivering the very best service and services tailored to individual client needs. MSPs need to understand how and when these needs change, and need to cater to these needs. A customer leaving should never come as a shock to an MSP. If it does, there are big communication problems that need immediate attention.

Eric Anthony, Head Operations Nerd, SolarWinds MSP (opens in new tab)

Eric Anthony, Head Operations Nerd, SolarWinds MSP.