Building a solid solution or technology portfolio is important for a growing MSP, but it’s not enough to outperform the competition. You have to sell that portfolio by establishing a unique position in an increasingly crowded IT services market. You have to differentiate yourself from the competition, or you will wind up fighting for customers using short-sighted or unprofitable strategies such as discounting your services.
From a marketing perspective, this differentiation involves clear, solid positioning. You need to communicate what you do, which customers you can provide that service to, and why you do it better than everyone else.'It's not enough to outperform the competition; you have to differentiate yourself or you'll be fighting for customers using unprofitable strategies' ~Matt McCarthy @BarracudaMSPClick To Tweet
Identifying and communicating that position will require that MSPs follow a few basic steps:
Find an area to specialize in. In a crowded IT service marketplace, specialization is becoming more critical. IT services and customer demands have become too complex to be addressed by an all-things-to-all people approach. Without developing some depth of expertise in your services portfolio, you can wind up pushing cookie-cutter services to your customers without adding any value.
That specialization should extend to your target market – a potential universe of customers that includes everyone sounds nice, but it’s not sustainable. Sometimes your value proposition is going to be knowing exactly what a certain set of customers need. For example, they may be organized by geography, industry, business size, or even the type of problem they need to solve.
Know your worth. You’ll need a simple, easy-to-communicate value proposition. Lots of companies provide email security, networking services, or endpoint protection. Why should anyone buy from your company?
You have to add value for the customer in a way that your competitors can’t replicate. Maybe its your market expertise, your outstanding customer service, or perhaps it’s your ability to deliver on a tight deadline. Play to your strengths – that’s what will net you higher margins.
Narrow your product and service focus. This can be difficult, especially given the fact that some customers have specific vendor or solution preferences. But, your team can’t effectively support every solution from varied vendors in each category. Find vendors that offer the right products for your target market, are easy to work with, and that provide value to your organization and make it easy to demonstrate you’re the value you deliver your customers.
Cultivate good references. By building a strong reputation among your customer base, you can quickly gain more business through word of mouth, as well as grow your business via upsell and cross-sell opportunities.
If you are delivering value, and your customers trust you, they don’t typically mind spreading the good word about you. Get them to go on record about it. This is especially important if you’re focused on niche target markets where testimonials and referrals can provide more value.
Communicate your message consistently across every channel. Your website, social media, marketing campaigns, and your sales presentations should hammer home this unique value proposition.
Once an MSP has established a strong, unique market position, it can more easily win and maintain a customer base that trusts their company and provides ongoing revenue opportunities.
Moving forward, differentiation helps you gain valuable insights needed to identify the right stakeholders at potential new client locations, as well as how to approach and persuade those prospects. Referrals will get better and be more plentiful, and you will have a stronger position during sales discussions because you offer real value that the customer can easily understand.
As your business becomes more specialized and more competitive, you will paradoxically face less competition and potential customers will have fewer choices when it comes to providers that can address their specific service needs.'Once an MSP has established a strong, unique market position, it can more easily win and maintain a customer base that trusts their company and provides ongoing revenue opportunities.' ~Matt McCarthyClick To Tweet
Matt McCarthy is the Director, New MSP Sales, Barracuda MSP. With 20 years of sales experience, he plays a key role in building initial relationships with prospective and new partners and educating them on the latest threats. Connect with Matt on LinkedIn here.