Do you need a new competitive edge?

Ryan Morris

Why do your customers buy from you?

This is THE question for MSPs trying to remain relevant or grow. Sometimes your answer is tied to uniquely unrepeatable reasons (long-term trusted relationship, truly rare knowledge that’s especially relevant to a very specific customer set, your cousin works in their IT department, etc.). But every other time, the answer is: IT DEPENDS.

Competitve-AdvantageBut not on what you think it does. The answer DOES NOT depend on what you sell … it depends on WHEN you are in the maturation process of your segment of the MSP market.

In simple terms, customers choose their MSPs based on a proven evolutionary model that’s based on TIME:

Stage 1

When a market is new, competitive advantage is based on having the best offering in terms of technical specs / capabilities. New markets require innovation. For MSPs, this question focuses on remote services offerings that customers have never been able to buy before.
Some segments of the MSP market are still very new: eDiscovery, data loss prevention, device / sensor monitoring and big data.

Stage 2

When a market matures to the point that multiple “equal” offerings are available, competitive advantage shifts beyond the product and onto the question of engagement terms. Growing markets with more than one competitor require differentiation. For MSPs, once a service is established, customers care more about who has the best pricing and SLA, the most flexible terms, etc.
MSP segments in this category include mobile device management, business continuity, and application performance management.

Stage 3

When the market further matures to the point where “Ts & Cs” become similar, competitive advantage shifts to salesmanship. For MSPs, this question is about overcoming objections, presenting a compelling value proposition, and getting customers to act now. In other words, now that this generation of offerings appear equal and the engagement models are comparable, which MSP can actually sell it most effectively?
MSP segments in this category include data & network security, hosted storage and remote infrastructure / computing platforms.

Stage 4

When sales skills become comparable, competitive advantage shifts to consideration – meaning the customer is most likely to buy from the seller they know the most about / feel the best about BEFORE the sales process even starts. In a nutshell, that’s the definition of MARKETING. For MSPs, this stage means that winning is less about having the best service (still necessary, but not sufficient to win) and more about making sure every customer knows you have the service.
MSP segments in this category include help desk, remote systems management, proactive maintenance and alerts monitoring & response.

So to really answer the competitive question – and how to convince more of them to say yes – you need to know two things:

  • Who are you selling to, and what kind of relationship do you have with them?
  • How advanced (or not advanced) are your customers in terms of spending money to buy the services you sell?

Bottom line: the MSP market is maturing at different paces for different services. The good news is this means more customers are willing to buy MSP services. The hard news is that customers will buy what you sell for different reasons than they did before – and that requires you to change your tactics.

From a different point of view: the underlying competitive advantage for MSPs is also shifting. Sometime around 10 years ago, competitive advantage for MSPs was based on great technical skills; 4 – 7 years ago: a great SLA; 1 – 4 years ago: great sales reps; and now: great marketing.

So here’s the ultimate question: if you are an MSP (and you want to stay relevant or grow your business) how great is your marketing capability?

While that skill may have been less vital in the past, it’s going to be absolutely mission-critical from now on.

MAXfocus offers free marketing materials, sales tips and advice to all MAX customers with our Building Blocks program, designed specifically to help you sell your services. To find out more why not sign up for a free trial?