The managed service provider (MSP) industry continues to expand, and this trend is not likely to change any time soon. Even in the current economic situation, where recession is in sight, demand for MSPs remains strong, resulting in growth opportunities this year. This is backed by the fact that 58% of participants at WatchGuard's webinar Top 3 Growth Opportunities for MSPs in 2023 and Beyond believe that cybersecurity spending will be maintained going forwards.
This trend was already noticeable at the end of last year, where a Progress Partners report indicated a 14% increase in the number of MSP contracts signed in the fourth quarter of 2022, compared to the previous year.
4 business growth opportunities for MSPs this year
For some years now, MSPs have faced many opportunities to grow and differentiate their business. As customer needs evolve, so the possibility to expand business services.
1. Add differentiators to managed services:
Given the current demand for MSPs and the entry of new companies in this sector, competition is clearly one of the key challenges. The best way to differentiate your offering is to generate a high level of customer satisfaction and deliver exceptional quality service. The positive feedback not only influences and improves customer retention, but also builds a trusted brand that attracts new business.
One way to keep customers satisfied is to invest in new technologies that meet and exceed their expectations. XDR, is a prime example of this, as it provides superior security, greater efficiency, and defense in depth, making MSPs more efficient and also more cost effective.
2. Automate to drive MSP business growth:
60% of WatchGuard partners believe that the managed services business will drive growth over the next two years. With this in mind, MSPs need to implement automation to streamline their operations, improve their service quality and increase customer satisfaction. By automating repetitive tasks such as patching, backups, monitoring and reporting, MSPs can free up some of their time and focus on more complicated tasks. This reduces human error and increases consistency. See how a WatchGuard partner succeeded with this tactic.
Automation and AI have an impact on scaling MSP business by allowing you to manage more customers and complex projects without having to add resources. The more these types of actions can be automated, the greater the direct impact on business profitability will be.
3. Utilize existing solutions to their fullest potential before purchasing new options:
MSPs seem to be investing their efforts in expanding new security services. You could say it is the main area of investment for them today because this area is so profitable. However, budgets are also getting tighter and tighter. This means the toolset MSPs use must enable them to remain efficient. MSPs need to be fully informed about what they can get from the solutions they integrate into their security tools to reap the highest profits. WatchGuard's Zero-Trust Application Service, for example, is included within the license for its EPDR and EDR products and functions almost as a managed service. This delivers benefits for MSPs that can help support them in protecting their customers' networks, as well as being more cost-effective than other types of solutions. Similarly, it is important that the MSPs' operational tools are aligned with the vendors' solutions. Otherwise, there is a risk of creating inefficiencies that undermine business profitability.
4. Attract new customers with a referral program:
While taking care of existing customers is essential, you need to continue to attract new customers in order to grow. One of the best sources for new customers is to create a referral program. Referrals are cost effective and are a powerful way to generate new customers, so it’s a good idea to offer incentives to current customers to recommend your service to people they know.
84% of B2B decision-makers initiate the buying process through a referral and, in addition, B2B companies with referrals close sales 69% faster, which goes to show what word-of-mouth can achieve while being a cost-effective way to gain new customers.
How does a good partner program contribute to MSP business growth?
Good technology is clearly not enough to address customer needs or to drive MSP growth. That is why MSPs need to create valuable partnerships with vendors and other providers to maximize their investments and achieve full-service delivery.
A good partner program shouldn’t be limited to the basics but should engage in training and development to provide the support MSPs need to guide them towards the best way to promote their services and take them to market.
MSPs know better than anyone how important it is to connect with customers on a personalized level and should receive the same commitment they give to their customers. Having a team that is responsive 24/7 to help them develop plans, pursue opportunities, close sales and satisfy their customers will help them continue to grow and make the most of what looks like an exceptional year for them.
WatchGuardONE, WatchGuard's channel partner program, is designed to support MSPs looking for growth. The key to this program lies in its flexibility and ability to adapt to each partner’s business model. Based on the knowledge that there is a no one-size-fits-all strategy, and that each MSP has its own billing model, it offers a range of flexible pricing options to suit your business. In addition, the WatchGuardONE program provides dedicated sales, marketing and technical support so its partners invest in becoming certified in its technologies.
If you are interested in finding out the top 3 opportunities for MSPs in 2023, feel free to register for our webinar series: Unlocking the Secret to Enduring Partner Business Success