Peter Drucker's famous quote feels more relevant with each passing year. Businesses that fail to look forward and are content to stay within their comfort zone often suffer the consequences. As many as 50% of businesses will fail within their first five years of operations. Those in the professional, scientific, and technical services industry lead the way, with nearly 20% folding in the first year alone.
The managed service provider (MSP) market is no exception. With the ever-changing landscape of technology and customer expectations, MSPs must keep up with the times to remain successful. So, after that doom-and-gloom opening, what should MSPs do to ensure success in 2023 and beyond? Here are ten things that every managed service provider should be doing right now.
1. Establish a Proactive Service Model
The industry shifted towards a reactive service model as MSPs became more prevalent. Services were offered on an as-needed basis, often with little proactive maintenance or monitoring of clients' networks and systems. In today's environment, however, MSPs must have a proactive approach to their services. Regularly scheduled preventative maintenance helps identify potential problems before they become costly repairs. Automated monitoring allows for early detection of trouble spots in client systems before any downtime can be incurred. This doesn't (necessarily) mean offering break/fix services, but instead, a package that includes regular maintenance, patching, and monitoring as part of a client's monthly service agreement.
2. Leverage Automation
This tip is not MSP-specific, as automation is the new buzzword for businesses across multiple industries. But, it's particularly relevant for MSPs as they look to maintain profitability in an increasingly competitive landscape.
Big firms are investing heavily in automation to reduce the manual labor costs associated with certain tasks. MSPs should do the same by leveraging automation tools and processes wherever possible. Automation can help streamline onboarding new clients, patch management, inventory tracking, ticket resolution, and more. Invest in solutions allowing you to automate mundane tasks so your team can focus on higher-value activities.
3. Invest in Security
There is nothing—nothing—worse for your MSP reputation than a data breach. Unfortunately, the prevalence of cyber threats has only increased in recent years, and the risk is significant for MSPs managing client networks and systems. To protect your company and clients, you must invest in security solutions to detect, contain, and respond to threats quickly. Investing in advanced threat detection tools and processes to monitor suspicious activity can save you from disaster.
4. Create a Disaster Recovery Plan
That said, disasters can still occur no matter how well you prepare and protect your networks. That's why it's essential to have a comprehensive disaster recovery plan in place for any eventuality. Establishing procedures for backing up data, recovering from outages, and responding to security threats will help ensure that your clients' businesses remain unaffected during times of crisis. Over 60% of outages in 2022 cost companies more than $100,000. You don't want to be one of the 15% that cost over $1 million.
5. Offer Cloud Services
The cloud has become an essential part of the IT landscape, and MSPs must offer services to their clients that take advantage of modern cloud technology. Not only is this a great way to diversify your offerings, but it can also help you increase profitability. Cloud-based solutions are more cost effective than traditional on-premise systems, allowing for increased scalability and flexibility. That means you can easily add or remove resources as needed without investing in additional hardware or software licenses. Plus, cloud applications often include automation capabilities that make managing client networks easier for your team.
6. Optimize Your SLAs
The service-level agreement (SLA) is the cornerstone of any successful MSP-client relationship. SLAs outline your obligations and expectations for service delivery, so optimizing them is vital to ensure that you provide your clients with the best possible experience. Ensure all SLAs are updated regularly with the latest industry standards and client needs. Additionally, establish a process for monitoring performance and responding quickly when problems arise. This will help ensure that your clients feel like their business is in good hands—and keep them coming back year after year.
7. Recruit for Customer Service
The MSP industry is becoming increasingly competitive, so standing out from the crowd is essential. One way to do this is by investing in customer service. While many MSPs focus on technical skills when recruiting new employees, you should also look for candidates with strong interpersonal and communication skills. This will help ensure that your team can effectively address client issues and provide a great experience overall.
One survey found that more than 60% of customers are very willing to switch brands for a better service experience. Even the smallest slip-up can cost you significant profit.
8. Adopt an Omnichannel Mindset
If you aren't already doing so, it's time to adopt an omnichannel mindset. Customers expect to be able to reach out for help via their preferred channel—whether that’s phone, email, live chat, or social media.
Investing in a comprehensive customer service strategy that includes multiple channels of communication ensures that you are always available and responsive when clients need help. This will also create more opportunities for upselling and cross-selling services.
9. Embrace AI
Artificial intelligence (AI) is here to stay whether you like it or not. The genie can't be put back in the bottle. Chatbots, data analytics, and voice activated systems are becoming more and more commonplace in the business world, and MSPs should embrace this trend rather than resist it. AI can help automate time-consuming tasks like ticketing, freeing up your team to focus on higher-value activities. Also, AI-powered analytics can provide invaluable insights into customer behavior and preferences that you can use to tailor your services for maximum effectiveness.
10. Reconsider your KPIs
Whenever possible, trend towards more sophisticated key performance indicators (KPIs). It's no longer enough to simply track the number of tickets closed—you need to be able to dig deeper and measure customer satisfaction, response times, resolution rates, and other metrics. This will help you identify areas for improvement in your services and ensure that you provide the best possible experience for your clients. Always Remember, those old thresholds won't last forever because the industry is always changing. You must stay ahead of the curve and constantly reassess your KPIs to make sure that they are still relevant and effective.
Ultimately, success today will require MSPs to stay agile and proactive in their approach to service delivery. By following these best practices, you can ensure that your business is well-positioned to capitalize on future opportunities.
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