How to Find Opportunities and Thrive in a Saturated Managed Services Market

According to the TSIA ‘State of Managed Services 2023 Report’, managed services was cited as one of the top three growth engines for the technology industry, with a revenue growth rate that was up 23% from 2022. And according to businesswire.com, the global managed services market is expected to reach $311 Billion by 2027.

Yet, from N‑able’s own 2024 Horizons Report that we conducted in conjunction with research firm Canalys, we found that 22% of MSPs still rate new customer acquisition as their number one business challenge.

While these are encouraging numbers, why is that almost a quarter of MSPs out there continue to struggle with finding and signing new customers?

Having worked with MSPs for the past 20 years, I see one of the key drivers for this as being the fact that many MSPs were initially founded by techs, not business professionals.

Moving the conversation from tech to business benefits

While these technical business owners understand technology extremely well, when it comes to sales and psychology, they’re not so well versed. As a result, their sales conversations tend to be more focused on reselling tools, when in fact it should be focused on selling the value of their services and the beneficial outcomes their services can provide to their customers. This inclination is most evident when I receive questions from MSPs around how to price. It’s the question I field the most from MSPs: “How do I price EDR?”,  “What should I be charging for backup?”,  “What do you see other MSPs charging for MDR?”  

The problem with this line of questioning is that the MSP is approaching sales from a toolsets mentality, instead of trying to establish a connection with the prospect to cultivate a true managed services relationship. Until they understand that there is a difference, they will continue to struggle with lead gen and landing new business.  

With this technical bias, many MSPs overlook who they are actually attempting to sell to: NON-TECHNICAL BUSINESS OWNERS. These non-technical business owners think differently and have diametrically different buying behaviors. So MSPs need to refrain from using industry terms or tech jargon when engaging with business owner prospects who are not technical.

Rather, MSPs need to speak the language that CEOs and CFOs speak and that is – How can you help my organization make more money?  How can you help my team become more productive?  How can you help make my organization more secure and cyber resistant?  How can you help reduce the amount of downtime my organization experiences? How can you help me better control my costs? This is how MSPs should be engaging with business leader prospects.

4 ways to overcome your MSP sales challenges

So, what can you do to help overcome these sales challenges and begin to thrive in an otherwise saturated market?

1.  For an owner-led sales model, hire yourself some help!

For the time being, you remain your MSP’s top salesperson, but consider bringing in a Business Development Representative (BDR) to prospect and book appointments for you, or consider hiring an account manager who can help mine for new sales opportunities from your existing customer base. Either position will be less costly for you to acquire, and more efficient in helping to generate new sales, than bringing in a top-gun sales executive. As the MSP business owner, you know the industry best and you intimately understand the value managed services can play in your target client’s business, so bring in the supporting cast you need to maximize YOUR effectiveness as the MSP salesperson by establishing a more dedicated focus to the revenue-generating activities needed to grow your business.   

2. Stop using the term ‘MSP’ and ‘Managed Services’ in your marketing and sales material

As our VP of Partner Experience, David Weeks, likes to say, “Don’t let those three little letters define you…you are so much more than that.”  Which is so true. When you look at everything that your MSP has to offer, there are better ways to be promoting yourself and your business. Think critically about what it is that you do, that doesn’t involve describing yourself as an “MSP that delivers managed services.”  

• Do you deliver security or compliance services? Then promote yourself as a security and compliance firm.
• Do you deliver backup services? Then promote yourself as a Business Continuity and Disaster Recovery firm.
• Do you deliver training? Then promote yourself as a training company.
• Do you offer consulting services? Then promote yourself as a consulting firm.

These are all individual areas of expertise that your MSP possesses that can be used as an opportunity to market yourself differently. Start promoting yourself as a ‘specialist’ and use that knowledge to gain entry into a prospect’s business.  

3. Ask your customers to spread the word with social proof

Social proof is critical when it comes to filling your funnel with fresh new leads. Unfortunately, prospects won’t necessarily believe what you tell them, but they will believe what their industry peers have to say about you. Your customers love you; you just need them to tell the world that! Run a campaign to encourage your top customers to submit a review on Google. Hire a writer to create a few different case studies that you can post to your website. At the end of every Executive Business Review, ask if they have any business acquaintances that they could refer to you. Leverage the powerful relationships you have cultivated with your existing customers to help you find new ones.  

4. Look up-market to the co-managed space

Many mid- to upper-enterprise organizations are struggling with finding and retaining quality cybersecurity resources, and often times, if they find the right security personnel, they cannot afford them. So why not consider moving upmarket to offer your cybersecurity toolsets and know-how to those larger organizations? Start with taking the onerous task of patch management off their plate and begin building out your partnership from there. 

Overcome growth hurdles and scale your MSP

There are over 335,000 companies globally, providing some sort of ‘managed services’ today within the channel. So while the competition is stiff, with a dedicated focus and a few manageable tweaks to your existing sales and marketing motions, you can build a stronger pipeline and close a higher number of contracts with quality businesses.

If you are interested in learning more, be sure to register for my summer boot camp series that will focus on lead generation tactics and how to implement a more efficient and effective MSP Sales Process.  

For more tips on generating new business for your MSP, you can also check out Stefanie’s recent Podcast Unlocking MSP Sales Success in which she talks about:

• Common Obstacles in Customer Acquisition
• Importance of Differentiating Your MSP
• Hiring for Growth: Account Managers vs. Sales Executives
• Setting Clear Sales Goals and Expectations
• Working On vs. In the Business
• Tools and Tactics for Lead Generation
• Creating a Roadmap for MSP Growth
• Effective Strategies for Closing More Deals
•  What KPIs to Measure When It Comes to Evaluating Your Progress

or download her eBook The MSP’s Guide to Wining at Sales and Marketing

 Stefanie Hammond is Head Sales and Marketing Nerd at N‑able. You can follow her on LinkedIn