The struggle is real. Generating more business remains one of the biggest challenges for many MSPs today, but it is also one of their biggest opportunities.
New research from the N-able 2024 MSP Horizons Report shows that 22 percent of MSPs struggle with new customer acquisition. But not all MSPs struggle to acquire new customers. For those MSPs with an established specialization in a particular technology or vertical and strong market share, new customers can be relatively easy to find. For many, as the report calls out, there are several problems, including sales and marketing strategies, the changing customer landscape, the scope of managed services available, and the complexity of integrating technologies into a cohesive package.
Instead of chasing all of these scenarios down, let’s “judo flip” this 22 percent dilemma and ask this question: Is gaining more customers, or as we might hear it, more leads, the answer MSPs need to be looking for and executing against? Or is it more so raising the standard and seeking out more good business with existing customers and prospects?
As fact would have it, lead generation can be a distraction for many MSPs for two key reasons. First, because of bandwidth and lack of service standards, it takes the focus, that important “F-word”, off their current customers. Second, many MSPs are hunting blind. They have not invested the time to consider who their Ideal Customer Profile (ICP) is and, in some cases more importantly, who it isn’t.
Identifying Who You Want
For a baseline, the ICP is the type of company or decision-maker most likely to buy and benefit from your services—in this case the MSP. And let’s be transparent; they are also the ones who trust you, take your guidance, and pay you on time.
Identifying your ICP involves understanding who your services most appeal to and why they would need them. Below are a few simple qualifiers to help you gauge your current customer base and align your sales and marketing moving forward to attract more of the same. Note that I said more of the same—that was intentional.
Not all prospects and current customers are great. MSPs must be deliberate and avoid saying “yes” to all business. Picking up the nickels may cost you the dollars. Take the time to decide who you want to do business with and what value you can repeatedly deliver and create. Concurrently, don’t hesitate to ask for or incent referral business. Good people want to do business with good people and enjoy “knowing a team” that can help. Encourage connections and ask for the business.
Here are three easy ways to segment your base and identify your ideal target customer:
Verticalization: What verticals do you play in today and which are best for your business? Make a list. Of these, which customers are the easiest to serve and most profitable?
Problem Solving: What are you most commonly solving out-the-gate for new customers? What are you solving today for existing customers? Market both those answers.
Customer Insights: Gather insights from customers regularly on why they do business with you and what more they would want from you if budget wasn’t a barrier.
Replicate The Good and Say Goodbye to the Bad
The takeaway is to identify ICPs representing good Monthly Recurring Revenue (MRR) and steer away from those who net you bad MRR. These accounts drag you down, nickel and dime your time, and wreck your team’s spirit.
To that end, another foundational point about growing your base and attracting more customers is having and nurturing a growth mindsetthroughout your organization. It may sound fluffy to some, but when put into play, it’s a superpower of top-performing MSPs and should not be ignored.
By Stefanie Hammond, Head Nerd, N-Able
