In the fast-evolving world of Managed Service Providers (MSPs), staying ahead of industry trends and best practices is crucial for success. Recently, I had the pleasure of sitting down with Peter Kujawa, a thought leader in the MSP space, to discuss strategies that can propel MSPs to the next level. Peter’s insights, drawn from his extensive experience, provide a roadmap for MSPs looking to enhance their service offerings, increase profitability, and navigate the challenges of the industry. Here are five key takeaways from our conversation that every MSP should consider implementing.
1. Embrace Managed Security as a Non-Negotiable Offering
One of the most significant insights Peter shared is the importance of integrating managed security into your service offerings. In today’s environment, security is not just an add-on; it’s a fundamental component of any MSP’s service package. The top-performing MSPs are bundling advanced security measures into their most comprehensive service plans, making it a non-negotiable part of their offerings. This approach not only ensures that clients are fully protected but also drives higher revenue as these services command premium pricing. MSPs that still offer security “cafeteria style” are missing out on significant growth opportunities.
2. Focus on Selling Fully Managed Services
Peter emphasized that the best-in-class MSPs are those that focus on selling fully managed services. These MSPs understand that a consistent, fully managed service offering simplifies operations and enhances customer satisfaction. By ensuring that all clients are on a uniform tech stack, MSPs can streamline support and reduce the complexity of managing diverse environments. This strategy not only boosts operational efficiency but also contributes to higher customer retention rates. As Peter pointed out, the most successful MSPs sell their most inclusive service offerings to 72% of their clients, a stark contrast to the 50% seen in lower-performing MSPs.
3. Prioritize Profitability with a High-Operational Maturity Level
Achieving sustained profitability is a challenge for many MSPs, especially those operating with lower operational maturity levels. Peter highlighted that top-performing MSPs consistently deliver profitability by focusing on high-operational maturity. This involves tightening the tech stack, standardizing processes, and ensuring that every decision is made with profitability in mind. MSPs that excel in this area are not just profitable in one-off quarters; they deliver consistent profitability year after year. By adopting these practices, MSPs can weather economic uncertainties and maintain financial health even in challenging times.
4. Align Vendor Relationships with Your Profit Model
Peter also discussed the importance of aligning vendor relationships with your MSP’s profit model. Smart vendors understand that their products must not only provide a gross margin but also positively impact an MSP’s service gross margin. MSPs should seek out vendors who align with their goals and offer solutions that enhance efficiency and support service delivery. This alignment is critical for maintaining profitability and ensuring that the solutions you offer add real value to your clients.
5. Learn to Drive Success Regardless of Your MSP’s Size
Finally, Peter dispelled the myth that only large MSPs can be profitable. Success is achievable at any size, and the key is learning how to drive that success from the outset. Whether you’re a new MSP or have been in the business for years, today is the day to start implementing best practices that will make your business more enjoyable and profitable. By focusing on the fundamentals—such as offering fully managed services, prioritizing security, and aligning with the right vendors—you can position your MSP for long-term success.
My conversation with Peter Kujawa was a masterclass in MSP excellence. The insights he shared provide a clear path for MSPs to follow if they want to achieve sustained success in this competitive industry. By embracing managed security, focusing on fully managed services, prioritizing operational maturity, aligning vendor relationships, and learning to drive success regardless of size, MSPs can thrive in today’s market. Implement these strategies and watch your MSP grow and prosper.
