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3 min read

Finding it Difficult to Differentiate Your MSP?

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You’ve likely experienced the frustration for an MSP, the inability to differentiate from competitors even though you have better service, a very high operational maturity, the best employees in town, the most certifications, the best management, the best tools available and raving customers. Still the prospects are questioning the service, comparing apples to oranges and putting the MSP into a defensive mindset through sales.


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Symptoms and causes of eroding your differentiation

Differentiation is not an on-off aspect of your business, like yesterday you stood out from the crowd and suddenly today you don’t. Losing the ability to communicate your unique or superior value is a slow process and also changes from prospect to prospect.

Here are the main signs of losing your edge:

  • Cannot control unfair price comparisons - the prospects are comparing you to an obviously inferior service provider’s low prices
  • Cannot engage high level executives - during the sales process, decisions aremade by those “who would get it” but with no understanding of the superior value
  • Small or Less Mature Prospects - the sales pipeline has mostly “not ideal” prospects who are small in size or very low in maturity. That means they are not likely going to value the superior services
  • They love you but choose the competitor instead - even when you have been able to differentiate against the competitors they choose them because of the price advantage. That means the overall value/price equation could not be planted.

One of the main reasons for seeing this trend is the commoditization of the MSP market. Commoditization is a process in which technology services become relatively indistinguishable from the same offerings presented by rival service providers. Commoditized services allow clients to make decisions based solely on the price tags.


The ultimate solution for differentiation

We have been helping best-in-class MSPs to overcome this challenge and surprisingly there is a short term, a mid term and a long term solution for commoditization.


Short Term - Communication

When we work with high maturity, market leading and progressive MSPs, the general communication solutions can fix this problem quickly as they are truly different but cannot really articulate it well:
Improve the message of the business problems to get the executives to talk
Generate high expectations as a norm to change the selection criteria
Improve the personal brand of the individuals of the organization
Provide true thought leadership materials to generate trust
Implement consultative sales tactics to get better understanding of their business problems
Articulate the service packages better to present a better value/price equation

Improve communication first to grab the low hanging fruit.


Mid Term - Innovation

If the MSP is not innovating then communication can go only so far. Service innovation has two aspects. One is new service innovation to solve new upcoming problems or extend the solution. The other is existing service optimization to make the current service faster, quicker or more economical to deliver.

The most important innovation we help implement to elevate an MSP is on the business aspect of your services. If you think about it, you have been adding many professional services to your technology stack. Even if it is a consultation, find a new application or develop a technology roadmap.

The reason is that most of the services you deliver and will be delivering cannot be sold and serviced without business consultation. Think about Cloud Services, Cybersecurity Services or Collaboration. All are very consultation heavy services and we can call those “Digital Transformation” services instead of technology services. If an MSP can communicate and deliver those professional services around the technology services they can have the ears of executives and beat the commoditization trap.


Long Term - Delivery

Seeing our clients succeed in elevating their MSP with “Digital Transformation” services instead of pure technology services, monetizing those services will not render them in a scalable way.

The long term game is not just the ability to talk about it, list it and sell it, but to deliver it the same way as delivering server patches.

Most MSPs think that delivering such services needs an entrepreneur superman with an MBA. This can’t be further from the truth. Delivering those services is basically applying very limited management activities to very limited scenarios: running a digital transformation assessment, scoping a digital transformation project, executing a digital transformation project or managing multiple projects.

These can be defined and put into a delivery process. Education materials can be generated and software can be developed to automate it all.


On a bumper sticker

Losing differentiation is a symptom of commoditization. To beat it an MSP needs to be elevated with Communication, Innovation and Service Delivery. An elevated MSP can enjoy higher prices, take pride in a properly differentiated brand, attract the right clients and have a predictable sales process to grow. At the same time a standard MSP just keeps struggling, losing margins and company valuation and has a hard time growing or even staying afloat.


Schedule a Future-Proof MSP Strategy Call



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