One question I get all the time, is how do these really successful MSPs do it? What are they doing to attract high-value clients? How are they able to find good people? Why are they able to charge fees that a lot of MSPs would never even dare to charge? Yet they continue to grow and they seem to get the big, juicy contracts, the big customers and are able to just make margins that most MSPs only dream of… Why is that?
There’s a reason for that. After doing this for 20 years and working with literally thousands upon thousands of MSPs, here’s one thing I can tell you that successful MSPs do. The ones that are growing, successful, and they’re making money, they’ve got good people, and they’ve got great clients. Higher fees can just be commanded and they happen for them.
You must have a strategy in place to get and develop high-value clients.
One of the things they do, that a lot of the smaller guys just don’t do, or don’t seem to understand, is they follow the process. They follow the strategy of getting and developing high-value clients. Look at your client base and break it down to 80/20. Which means that probably 80% of your revenue and profits are coming from 20% of your customers. However, if you’re like most MSPs that are struggling, not succeeding, or not growing at the rate they want or not making the money they want, I would pretty much guarantee you do not have a strategy in place for cultivating and developing those high-value customers.
Another thing you’re doing that successful MSPs wouldn’t, is you’re just looking to get more
customers — full stop. You just want someone to bring you more leads and more MRR customers. You’re not being very strategic in saying who really are your high-value customers and understanding what their commonalities are. It’s not always the big customers who are the high-value customers. Often you get a big customer and sometimes they can get demanding because they’re spending a lot of money, so they want discounts, have high demands, they’re very noisy, or maybe they’re a pain in the ass to deal with, quite honestly.
Some clients may bring in a lot of revenue, but are still not considered “high-value.”
Even though they represent a lot of revenue, they might still not be a high-value customer. Because a high-value customer is someone who’s really profitable, consistently spends money, takes your advice, and has an easy-to-deal-with environment. In other words, their needs fit right within your wheelhouse. They refer business. They are champions for you. Something that most MSPs do not have in place within their marketing plan, is they do not think about how to specifically get and develop these high-value customers.
Have you even identified them in your customer base? Have you ever ranked your customers from least profitable to most profitable? Do you do that on a regular basis to see which customers are those “ones”? You need to give extra love and attention to those clients. You need to expand, grow, and develop that process.
Which clients should you consider letting go of?
In some cases, there may be clients that you need to let go of. You would let go of them because they’re actually keeping you busy, but they’re not profitable and you could free up that time to get more high-value clients. Right now, with inflation going up, and with it being very difficult to find and keep good technical talent now, it’s critical that you identify high-value clients and you cultivate them. You also have to get rid of all the cheapskates and the people who are just not the right fit for you.
The only way you’ll have the confidence to do that is to really have a plan in place for getting and attracting high-value clients, keeping them, and building your business on that. That’s what really successful MSPs do. They constantly trade up their client base where they’re shedding those low-margin, low-profit customers, and they’re getting these higher value customers and developing the ones that they have from within their client base. In the end, they end up with fewer customers, but they’re making MORE revenue, and MORE margins, with fewer employees. And that really is the key.
These are the tricks, but how do you get there?
How do you go about finding high-value clients? What are the marketing strategies? How do you raise your prices? How do you get rid of the bottom 20% without being disagreeable, or burning bridges and so forth? All of that is part of the content that we’re going to be covering at this year’s annual Roadshow event.
To really hone in on what is a high-value customer, what do you need? What do they look like? What do they want to buy? And then how do you build your service offering and your marketing so that you’re able to attract those high-value clients who want to pay more for a premium service and who are going to come into your business and actually be a true asset? These types of clients will be a delight to work with and you can do your best work with them.
Another thing you could do to get on the road to becoming a more successful MSP is attend this year’s IT Marketing Roadshow!
This will help you become more successful in running your MSP because we are going to be talking specifically about how you implement a marketing plan not just to get more customers, more sales, more leads, etc… but how to get more high-value clients!
Seating is limited. So you’ve got to click on this link and claim your city because if you don’t, tickets will sell out fast. Get registered, bring your marketing people or bring your business partner. This is going to be a high-value event. You’re going to love the content. You’re going to love what we’re bringing to you. But you’ve got to be there or you’re going to miss out!