A lot of managed service providers and IT suppliers look the same — they’re all vanilla. Ten years ago, this was fine because you were still in high demand for your IT skills and knowledge.
Now with advancements in technology, automation, and the Internet, the base IT knowledge that most people and companies is higher. This can make positioning your managed IT offering a little harder. For example, potential clients might ask “Why do we need you for IT support when we can do it ourselves?”
This scenario will happen, and this type of client needs to be re-educated (if possible) about how the correct use of IT and leveraging an MSP can support their business growth.
But we are different!
Managed service providers often fall into the trap of thinking (and saying) they’re “different” or “better” than other MSPs in their area. But, when asked why they’re better, most business owners or managers will reply with answers like:
- We have better engineers and teams
- We have better tools
- We have better technology vendors
- Our clients think we’re the best
- We can offer better/cheaper pricing
Now let’s break these down and look at why each of those arguments just doesn’t work:
Engineers & Teams – Yes, having a great team (great people AND skills) is extremely important, and it’s one of the most critical factors in having a high-quality service offering. HOWEVER, it’s not a unique selling proposition or a reason why you’re better. Why? Because any MSP can hire great people and invest to ensure they have great skills.
Tools – Tools like help desk, antivirus, remote monitoring and management, automation, etc., all play a key role in the efficiency and quality of your service offering. HOWEVER, your competitors can buy the same tools.
Technology Vendors – Partnerships with the likes of Microsoft, hardware vendors, security partners, etc. do add value to your services and ultimately your clients. But, guess what … your competitors have the same partners.
Clients – Yes, you may have great clients with glowing reviews, but so does your competition.
Pricing – If you’re able to undercut the competition and be cheaper, that’s not always a good thing. You need to lead with value and service. If you’re adding value, then your clients shouldn’t be looking for the cheapest option.
What’s wrong with being an ordinary MSP?
The problem with being ordinary is just that. Your service offering is ordinary, vanilla, boring, and seen as a cost rather than as a partner that adds value.
Overtime, this problem will compound as new managed service providers are born, and competition grows. This will result in a race to the bottom for the “ordinary MSP,” which will impact your revenue, your quality of service, your offerings, and your relationship with clients (if you keep them).
The problem with being an ordinary #MSP is just that. Your service offering is vanilla, boring, and seen as a cost rather than an added value @MikejDouglass @smartermsp
Stay relevant, add value & thrive
The answer to this problem is simple: Once you have your team, service offering, procedures, and tools running like a well-oiled machine, you need to find your MSP niche!
Finding your niche or owning your “space” will be your differentiator, and it will give you the opportunity to scale and take your MSP to the next level. The execution of this requires commitment and determination, though.
Finding your MSP niche
How you find your niche will be different for every MSP and MSP owner. You may already have a niche and not know it, or you may need to go looking.
For example, if you look at your existing client base, you may find that a large number of your clients are from the same industry or that you offer a specialized service on top of your standard MSP services that differentiates you from the others.
Look for something different or unique, a strength you already have that you can leverage. If you’re still struggling to find the right niche, get searching. Look at other markets, areas, or industries, and look at the MSPs in that space. Can you do it better?
Many MSPs claim to have a niche, but if you look closer it’s just another area to add to their growing list of services, areas, industries, and mix of clients. Once you find your niche, focus on it, grow it and own it.
Advantages of concentrating on a niche
Once you have found, nurtured, and developed your offering around your niche, you’ll find a number of benefits as you build your client base in this space. These benefits include:
- Clients are not price-focused. They come to you for your experience and quality.
- You will receive referrals and recommendations from within your niche.
- Conversations can be about adding value to your clients, not just providing reactive IT support.
- Over time the advantages will compound and result in more clients, happier clients, increases leads, better margins, and a healthier MSP.
Finding your #MSP niche will ultimately lead to more clients, happier clients, increased leads, better margins, and a healthier MSP @mikejdouglass @smartermsp
How Yellowbus Solutions found our niche
When Yellowbus was started, we were a very traditional IT support MSP, offering the typical IT services and complimentary services like Internet and telecoms. We got good at what we were offering, invested in the tools, people, and service offerings. This allowed us to grow. However, as the market became more and more competitive over time, we knew we had to change.
We analysed our client base and realised that a big portion of our existing client base was within the nuclear and engineering sectors, due to the location of our head office. We then reviewed the client personas that were the best fit and where we liked working, and again this pointed us to the nuclear and engineering clients.
So, our niche was born. We were going to become THE managed service provider within the energy and engineering sectors.
Fast forward to today … yes, we still offer IT and associated services to businesses of all shapes and sizes, industries, and locations. However, our focus is on the energy and engineering niche when we develop our marketing, message, future service offerings, and partnerships.
We now have a name in the industry, receive referrals from within the industry, and have often won projects against IT companies 100 times our size in part because of our quality, security, and speed … but ultimately because of our track record in this sector.
To see our MSP offering and message to our niche firsthand, visit www.yellowbus.uk/y-enable
Find your niche!
Great article, I agree, I think the only way to thrive today in the IT Services space is to specialize, find a niche or hyper-niche.
There may be other variables to consider when choosing a niche, including, long term growth opportunity, culture, size, billing…sometimes medical offices can be net 90 and may mess up an SMB’s cash flow, other things like that, but great article for sure, thank you for sharing your insights and ideas.
Thanks Martin, glad you enjoyed!
Great information, There are many companies who provide manage service. But it is difficult to find good company with experienced team and IT engineers. ITS is also a good managed service provider in LA.