If you’re a managed service provider (MSP) looking to grow your business, don’t aim for fast growth for its own sake. And if you think the unpredictability of the last two years is the exception to the rule, change your mindset, experts advise.
Three MSP leaders on the “Unlock the Secrets of Fast Growth” panel at this year’s Conference said that they all see rapidly evolving technologies and changing markets as the norm.
IT Con CEO Leah Freiman said she wakes up every day wondering what’s new and how her business must adapt. Constantly being on top of the market and being in different places is her company’s biggest challenge, rivaled by finding good talent, because the MSP business requires technically savvy people with great communication and client management skills, she said.
Communicating with prospects and clients in person was put on hold by the onset of the pandemic two years ago. Still, Daniel Herrera, CIO of TailWinds Technologies, said it didn’t put a damper on growth. Instead, his sales team doubled down on Zoom calls, emails, and just picking up the phone to call more prospects and keep in touch with customers. The TailWinds’ approach was the opposite of many MSPs, which decreased marketing and sales. “We actually added $2 million in revenue during the first nine months of COVID.”
Clear metrics remain critical for growth
However, the company’s growth did have a downside, as it stopped paying attention to metrics. “We weren’t paying attention to what was happening to the organization as a whole. That bit us a little bit,” Herrera said. That prompted Tailwinds to build new dashboards and new key performance indicators (KPIs).
“Every department understands exactly what they have to hit and what happens if they don’t hit that,” he said. If MSPs want to fast-track growth and bring on clients on quickly, every employee needs to understand their role and their responsibilities.
Mitch Morgan, CEO of New Charter Technologies, agrees it’s critical to be metrics-driven. “Get in touch with your business from the standpoint of KPIs and dashboards. It’s extremely important to be able to enhance profitability.”
New Charter Technologies has an even broader view of what’s possible and the barriers to growth because his organization has brought together 18 multi-million dollar companies into an equity partnership over the past two years.
“We share a lot of best practices. What works gets quickly emanated across the platform and being intentional about growth, investing in marketing, investing in sales, and getting it right,” Morgan said.
Big-picture focus leads to solid growth
IT Con’s Freiman said focusing on the big picture is essential to strong growth. Head count and assets owned are not what matters, nor is landing the deal at all costs; what matters is knowing your metrics and the end goal, and staying focused, she said.
“Focus includes profitable ventures and being an educator for clients by knowing what’s coming next because they don’t know what they need,” Freiman said. “We know what they need. And it’s our job to go out there and offer it.”
Charging enough for it also critical, and customers don’t mind paying, said Herrara. “They understand they have to pay, so charge what you’re worth,” he said.
Morgan added that companies are raising their prices due to an inflationary economy. “Service margins are the key, and there’s a lot of pressure on service margins right now,” he said.
Labor costs also are rising rapidly, and hiring talent is a major issue for everyone. Morgan said that growing companies today means having conversations with customers around new pricing and services. “You’ve got to be able to reprice your services to market.”
The future of growth for MSPs is around innovation. According to Morgan, customers are reaching peak operational maturity, regardless of whether they are in the cloud, data or industry verticals. “We’ve got to be in a position to anticipate those needs. Unlocking the secrets of fast growth is listening to our clients and offering the services that they’re looking for.”