There is no question that building a sustainable business in today’s economy is harder than ever. Managed service providers face ongoing challenges such as declining prices, finding ways to differentiate their existing service offerings from their competitors, and customer retention. Many MSPs attempt to solve these issues by going broad. They’ll jump on every possible opportunity whether the job is in their skillset or not – you know, the old “say yes and figure it out later” approach. And although some MSPs have found success with this strategy, going too broad means a lot of MSPs are missing out on the chance to stand out in a very crowded field.
One way MSPs can stand out from the competition is to focus on specific verticals. In a recent CDN blog post, Stuart Crawford said that fear can be a strong motivator for an MSP to take a horizontal approach. Others say it’s out of necessity. In fact, I spoke to a President of an MSP (whose name I’ll keep secret) who said, “My vertical focus is everybody who is willing to pay.” These are all understandable reactions, especially in an uncertain economic climate, but strategically, it’s always better to have a real competitive edge.
So why focus on a vertical? Steve Bigelow, Senior Technology Editor at TechTarget, mentioned that when an MSP operates in a vertical market they gain deep knowledge of that industry: its trends, terminology, regulatory and compliance challenges, competitive tendencies and other key attributes of the business environment. In turn, the MSP becomes a subject matter expert who can target solutions that not only solve the network issue at hand, but which add value to the customer’s core business.
Having a vertical focus allows you to:
- Create credibility and trust with prospects. An MSP can show a high probability of success by having use cases and customer references in their customer’s industry, and as a result, they can jump to key decision makers sooner in the sales process.
- Diagnose customer issues faster because they have a comprehensive understanding of the applications and systems used in that vertical.
- Understand and manage the variables that go into providing a quality end-user experience.
For example: an MSP who focuses on financial services might create templates, solution designs, statements of work (SOWs), and even include SLAs for banks, accounting firms, or/and insurance companies, each of which can be tailored to fit the specific needs of the customer. The MSP can also develop a standardized process that makes it easy for technical staff to perform installations and offer support. This is an opportunity for the MSP to charge a premium because they can deliver more value.
Charles Weaver said in his MSPWorld 2014 keynote address that the greatest growth potential for MSPs starts with getting involved at the application layer and focusing on verticals like financial services. This makes sense to us at Exinda. We have a proven track record of enabling MSPs around the world play to their vertical strengths with industry-specific solutions for a variety sectors including Financial Services, Higher Education, Hospitality, Retail and Government.
Let us show you how to grow your MSP business. Schedule a live demo today.