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The Growing Focus on Sales and Marketing in Managed Services Providers

In today’s rapidly evolving digital landscape, Managed Services Providers (MSPs) are proving themselves invaluable partners for businesses of all sizes and sectors. You can’t turn a corner at an industry event or review a social media feed in our industry without hearing how MSPs and their managed services offers are the key to penetrating end-user customers with new technology solutions – especially in the SMB space. 

As the demands of information technology (IT) continue to scale and complexity grows, MSPs have been a beacon of reliability, offering a comprehensive suite of services ranging from network management and data backup to cybersecurity.

However, a discernible shift has been noted more recently.  More and more high growth-focused MSPs are refocusing their efforts on sales and marketing. At a first glance, it may seem like an interesting change in trajectory, given the technical nature of the work that MSPs carry out. But diving deeper into the MSP market dynamics, the reasons behind this pivot start to make sense for those firms who want to grow and do so profitably.

A Crowded Marketplace 

The first key factor is the escalating competition in the MSP space. As businesses recognize the benefits of outsourcing their IT operations, the market has responded by becoming more saturated. To differentiate themselves in this crowded landscape, MSPs are focusing on sales and marketing to elevate their visibility, highlight their unique selling propositions, and attract a larger client base.

This is especially relevant in their local market.  In fact, as more and more competitors join the fray and offer lower-cost alternatives, it’s imperative that the MSPs with the best services learn to market themselves as such.   

The Need for Customer Acquisition and Retention 

Next, we must consider the nature of the MSP business model. The long-term success of an MSP depends heavily on its ability to acquire and retain customers. As a recurring revenue business, it is essential for MSPs to maintain a steady stream of clients and keep those clients billing. This can only be achieved through strong sales and marketing efforts.

By effectively showcasing their offerings, MSPs can attract new clients, while targeted marketing campaigns help maintain existing relationships and prevent customer attrition.  The focus on growing the ARPU (average revenue per user) is the key focus for most MSPs in this area yet many are just now understanding how to develop marketing and sales treatments that drive down churn and drive up renewals and upsells.   

The Power of Branding and Value Communication 

The technical complexity of managed services can often make it difficult for potential customers to understand the value they are getting. This is where sales and marketing come in, bridging the gap between MSPs and their clients. A well-crafted marketing strategy helps demystify the services offered and communicate the tangible benefits in a language that clients can easily understand. Meanwhile, sales efforts help solidify the value proposition, building strong client relationships based on trust and mutual understanding.  Smart growth MSPs are melding sales and marketing efforts together to create a cohesive story to the market regarding their value and then executing on that value.  

Adaptation to Market Trends 

In an age where digital presence can make or break a business, MSPs cannot afford to neglect their online image. The focus on sales and marketing is also driven by a necessity to adapt to evolving market trends. Social media, SEO, content marketing, and other digital marketing strategies are vital for MSPs to reach their potential clients, who are increasingly making decisions based on their online research.  One key element we see high-growth MSPs investing in is local search engine optimization (SEO).  By leveraging local search and their location, they can better send leads that are local in nature to their sales teams.   

Innovation and Diversification of Services 

Lastly, the continuous innovation and diversification in the managed services landscape necessitates MSPs to keep their clients and prospects up-to-date with their evolving services. The advent of cloud computing, IoT, artificial intelligence, and machine learning has significantly transformed the services MSPs provide. Sales and marketing play a pivotal role in educating customers about these new offerings and demonstrating their benefits. 

In conclusion...

While the core competence of MSPs lies in their technical proficiency, the growing emphasis on sales and marketing is a strategic move born out of the necessity to stand out in a crowded marketplace, retain clients, communicate value, adapt to market trends, and educate customers on new services.

In the future, the MSPs that strike the right balance between their technical expertise and marketing prowess will be the ones that thrive in this increasingly competitive industry. 



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