Recurring Revenue Hinges on Specializing and Choosing the Right Targets

LONDON – MSPs need to separate themselves from the pack by identifying their ideal customers and specializing in solving their problems, instructed global channel sales expert Fiona Challis during her keynote at the recent Channel Evolution Europe conference. This will help increase recurring revenue streams and drive predictable and profitable growth.

Identifying and qualifying your target audience is the first step to winning new premium customers, whether it’s IT services or toothpaste, according to Challis. She used the example of four toothpaste brands—with prices from £1 to £9—to identify four types of buyers, from price-conscious to premium users. It’s not that different in the managed services market, which is highly segmented like other industries. Only the MSPs that can clearly understand their customer’s needs will succeed.

Challis argued that MSPs need to concentrate on three key factors to gain a competitive advantage: knowing their market, using the right media, and delivering the right message. She emphasized the importance of specialization.

MSPs Must Learn as Much as Possible About Their Clients’ Businesses

Opportunities for MSPs keep growing as most industries undergo digital transformation projects. However, selling standard solutions to different markets will not land premium customers.

Challis told the story of one MSP losing a new deal with one of its customers, a large law firm, because another MSP demonstrated its specialization in the IT needs of legal organizations.

Her advice is to learn as much as possible about a specific market segment, create a clear message for the sales team, and position themselves as experts in that market using their website, social media, and other channels. Also, engage with potential customers by attending their industry-specific conferences, trade shows, and other events, she said.

Make Sales Meetings About the Customer Business, Not Technology

According to recent research, 52% of the organizations in the U.K. will outsource some or all of their IT processes. While in some industries—especially in highly technical fields—the move to the cloud has already happened, many other sectors are still in the consideration phase or need specialized help.

However, going to a potential client armed with a bunch of technobabble will not win their business. Vendors and MSPs who already work in one specific industry and can engage with customers, understand their challenges, and talk to them about real solutions, not technology, are the most likely to get the business and keep the customer for many years.

MSPs Need Collaboration to Leverage Cross-Market Opportunities

Over the past few years, collaboration has emerged as the best way for channel partners to optimize their business models and understand best practices.

Collaboration in the tech sector has increased as hardware and software companies understand that they can’t do everything alone. From companies such as Samsung producing the processors for Apple, to Netflix running their service on the Amazon cloud, industry leaders in consumer and professional markets have found ways to share best practices and go to potential customers together.

Challis said there is an excellent opportunity for MSPs to collaborate with each other. Those who can see the potential of sharing information and even work together on significant projects will gain a competitive advantage and have the tools to go after bigger deals.