As we approach December MSPs could be thinking they’ve missed the selling season for 2017 but this isn’t necessarily the case.
December, and the festive season, brings the opportunity for refining your selling process in preparation for the New Year as companies start to wind down for their holiday break. And as we approach 2018, it’s also a good time to look back at what was driving the market in the preceding 12 months.
Here at Transmentum we’ve looked at how The Cloud is affecting the channel, preparation for the introduction of the new Global Data Protection Regulation, and on establishing a recurring revenue, as just three of a number of key topics Managed Service Providers have been dealing with.
In a blog to coincide with Thanksgiving, channel experts CompTIA wrote about the trends and challenges of working within the Tech and IT channel for MSPs and it pays to consider those when creating your selling strategy.
Revenue and profit margins have remained relatively high within the channel for companies offering unique products, services and value-add. At Transmentum we’ve often focussed on the importance of finding your UVP (unique value proposition) and capitalising on that when it comes to your MSP offering.
Selling and delivering Managed Services
Selling and delivering Managed Services is quite different than a traditional sales model however and needs to be looked at carefully as part of the overall blueprint. Your sales team will be offering your brand as the unique selling point and Value Added Service (VAS) – a case of what you can offer not how you offer it.
With the UK Government’s recent Budget announcement of a £500m investment into in a range of initiatives from artificial intelligence, to 5G and full fibre broadband, the Internet of Things (IoT) is still driving SMEs to seek help from MPS. A survey by Vanson Bourne revealed that 55% of MSP respondents stated customers were demanding IoT related services and that seven in 10 MSPs were planning to amend their services based on the wants of the customer.
From the breadth of new applications that need to be implemented, integrated and supported, to a wealth of network and security support opportunities, MSPs are in a perfect position to upsell and to offer partner and reciprocal agreements.
Partner business propositions are different from the end user value propositions. The motivation and metrics of success are different. Partner business propositions address the key reasons the relationship is beneficial to the vendor and partner. Key questions to consider include:
- the market opportunity and how this relationship will affect their business or their clients business.
- what the financial benefits are and what services they can wrap around the offering.
- how the proposition helps differentiate them from vendor and their own competition.
- what tools, demand generation, and other elements that will strengthen their position.
Packaged into a Managed Services offering, these partnership and layered offerings can provide a full range of options which go beyond a single service point solution. This can significantly enhance the offering from an MSP and deliver real extra value to a customer.
This in turn leads into a recurring revenue model, something we at Transmentum have been advising our clients on for a long time.
MSP security offerings
With high profile data breaches making headlines on an almost daily basis, IT security is still driving SMEs to seek help and this is reflected in the upturn of MSPs adding data security to their service portfolios which we’ve seen during the past couple of years.
Our blog An MSP guide to selling IT security looks at this in greater depth and is something which should be seriously considered for the 2018 selling season.
Christine Horton writes about the same thing on Channel Pro this month. In her piece she says: “Mounting security threats, new regulatory demands across the UK and EU, limited in-house resources and an ever-increasing skills gap are all fuelling growth for managed security services.
“The next step is for MSPs to offer their customers end-to-end, layered managed security services that combine different technologies to help protect them from an increasingly treacherous threat landscape.”
The future still looks bright for MSPs, especially those working with a recurring revenue model and those who have expanded into the MSP security sector. Spiceworks is predicting, in its 2018 State of IT report, that companies’ IT budgets will either stabilise or, in many cases, increase next year.
In addition, organisations are looking to hire more IT staff and increase their adoption of emerging technologies such as artificial intelligence (AI), Internet of Things (IoT), and virtual reality (VR). All of these pain points provide a perfect entry platform for Managed Service Providers to offer value add propositions.