Top 5 Ways to Increase MSP Profitability in 2023
The year is 2023. In a world where businesses are increasingly reliant on technology, managed service providers are in demand more than ever in history.
With the new year rolling out, now is the time to reevaluate your business.
Is your MSP making as much money as possible? Or are there areas you can trim the fat off and improve your bottom line?
To help bring you up to speed, we’re here to help!
Print Partner is the trusted companion to MSPs throughout the country. We’re always tapped into the latest trends and going-ons of the MSP world, and we want to share some tips with you.
In this article, we’ll go over the top five ways to maximize your MSP’s profits so you can grow and blossom in this new year.
1. Stop Working with Unprofitable Customers
Your business has limited time, energy, and money, so you want to focus your resources only on clients who make you money.
This may be a tough pill to swallow if your business has been accepting everyone and anyone who needs IT support. And, while you may want to work with everyone, it may not make sense to work with specific clients.
You may need to go back to the drawing board to reevaluate your business model altogether. Dig into the data you have for your clients, and ask yourself the tough questions.
Here are some to consider:
- Which clients are you spending the most time on calls with?
- Which clients require the most escalations?
- Which clients have old hardware that frequently breaks down?
- Which clients are spending the least on your services?
Once you’ve organized your data, compare how much your clients spend on your services to how expensive it is for you to service them.
If the numbers don’t line up in your favor, consider introducing them to a new lower-maintenance service model, one that will cost you less. If they don’t go for it, consider referring them to another service provider.
No hard feelings - but if you spend six hours a month on the phone with a $200/month customer, something must be done.
2. Upsell and Cross-Sell Your Service
Make sure your clients get all the services they need from your business.
Your MSP likely has different packages for different types of customers. So, take some time to evaluate which customers are getting which packages.
It’s very likely that several of your customers don’t know much about IT support, and if you suggest a package that is a better fit for their needs, they will trust your judgment.
Business owners see their MSP as their trusted technology advisor. Use this to your advantage!
Consider areas where you can provide value that your customers may have never considered.
An excellent topic for upselling is security. While less tech-savvy clients won’t understand everything that goes into network protection, they will certainly understand the potential consequences of hackers.
Ensure they understand the risks involved if they don’t upgrade security - data breaches, leaked information, lost reputation, lawsuits - you don’t have to be Bill Gates to get it.
Every client is different, so it’s essential to learn about their needs, goals, and budgets - and sell additional services that resonate with them.
3. White Label Services
Beefing up your brand is an excellent way to build upon your client relationships.
You want your clients to trust you and feel they can rely on you for all their technology needs. Remember: be their trusted technology partner!
Using white-label services can be a great way to build trust.
Your client doesn’t want to pay for Dave’s MSP and John’s Security System. Instead, they want to have Dave’s Complete Service Suite. It’s much cleaner, and it will drive home your role as the one-stop shop for your client’s IT needs.
“Customers increasingly want to work with a trusted business advisor, not a box shifter,” reads an article from N-Able. “By building your own branded portfolio of services, you’re reinforcing the idea that your MSP is a one-stop-shop for advice and solutions.”
Plus, white labeling offers a great way to upsell and cross-sell services. It doesn’t really matter that the back end shows N-Able or Datto or whatever product - they don’t need to really be true white-label products, but your branding should show it as being included.
When you itemize each individual service to tack on, you are forcing your clients to make several micro-decisions - do I want this supplemental security protocol? Do I want this network feature? And so on.
But incorporating white-label solutions as a complete collection of services relieves them from making as many decisions. Simply offer a comprehensive package branded under your name, and call it a day.
Your clients will thank you for simplifying what could otherwise be a stressful and complicated buying process.
4. Review Existing Vendor Relationships
Cultivating relationships with vendor partners is a massive part of any MSP.
Making allies for your business can be highly lucrative and beneficial. Vendors allow you to expand your network and service suite without revamping your entire organization.
No need to reallocate your precious technicians’ time when your partner can handle the task.
You can also make an additional revenue stream for referring business to your partners. Many partners will be thankful for the extra business and will offer you bonuses.
For example, when your MSP works with Print Partner, we pay you at least $250 for each managed print referral we receive from MSPs. We also pay you $1,000 per copier sold and 5% on lifetime print allotment.
For more information on what makes us a viable vendor partner for MSPs, read: What Sets Print Partner Apart?
However, while vendor partners can be a great asset to your business, be sure to evaluate the products and services your partners offer carefully.
Remember that when you work with another vendor - whether it offers additional IT resources, managed print, security, BDR solutions etc. - you entrust them to do right by your customers.
You are putting your reputation on the line. If your customers are not satisfied with your partner, this will damage your brand.
So, check your list of vendor partners, and ask the following questions about each one:
- What am I getting out of this relationship?
- Are my customers happy with this vendor’s service?
- Am I receiving profit or commission from referrals sent to this vendor?
- Is this vendor sending me referrals for business?
- Is this vendor offering a good deal for me on supplemental service?
- Do your vendors allows you to white-label their services?
This may also be a good time to prospect for additional partners - is there a service your MSP doesn’t offer but is in high demand? Or is there a service that costs too much for you to handle alone?
Consider sniffing around for a trustworthy provider of such a service - you can unburden your busy team while providing additional value to your customers.
5. Examine Your Customer’s Managed Print Service
Finally, review your current and prospective client’s printing infrastructure.
Consider how much time your technicians spend on the phone troubleshooting printers and copiers. For many MSPs, print support calls eat up a massive portion of your team’s time and energy.
With countless print devices on the market - too many for your team to adequately keep up with - print-related calls often result in escalation, which requires you to pay technicians for hours of labor to service devices that you don’t even profit off of.
This is why you need to have a solution to your client’s printing needs.
If you don’t want to deal with print devices by yourself, consider partnering with a managed print services (MPS) provider, which can help you unload the burden of print off your staff.
Your client’s MPS provider will handle those pesky print device calls while standardizing and simplifying their print fleet, making your team’s lives much easier.
For more details on the benefits of working with managed print users, read: Why Managed Print Services Users are More Profitable Clients for MSPs
Print Partner’s Commitment to Boosting Your Profitability
In this article, we covered some of the easiest and most effective ways to increase your MSP’s profit margins. Using this content, you’ll be able to minimize your spending and maximize your income.
Thankfully, you won’t have to do it on your own. Print Partner is here to help you achieve your profit goals!
We work with MSPs throughout the US, collaborating with you to give your clients top-shelf managed print service.
We protect you from competing print vendors trying to steal your business with their own shoddy managed service packages. Unlike many other print vendors, we don’t offer IT services (never will), and we’ll be your advocate every step of the way.
Plus, we’ll pay you for referrals! Each referral will net you at least $250 for the introduction, plus $1,000 per copier sold and 5% on your client’s lifetime print allotment.
If you want a partner to help you maximize your profits, consider partnering with us, a Print Partner you can trust.