Differentiate to Dominate: How Your MSP Can Stand Out from the Crowd
Our own Tim Conkle spoke at Channel All-Stars, a virtual event hosted by Channel Program. He covered important topics such as competing at parity, differentiation, and common sales mistakes MSPs make. Catch up on key ideas from Tim’s talk here!
There are a lot of MSPs out there, competing for business. Some estimates put the number as high as 40,000 — in the U.S. alone! Needless to say, our industry has gotten crowded. It’s also gotten extremely competitive, with the bulk of business going to top-tier MSPs, the major players that gobble up available revenue and leave everyone else fighting over the scraps (the Pareto principle in action).
So how do you stand out as a smaller MSP? You want to win new business and grow your organization, and you’re confident in your service delivery, but …
How do you get potential clients to choose you?
Your MSP needs differentiation.
Our CEO and the man behind The 20, Tim Conkle, spoke on this very topic earlier this week at Channel All-Stars, a virtual event hosted by Channel Program. Tim shared his thoughts on differentiation, and gave actionable tips and no-nonsense advice to small and mid-sized MSPs with big growth plans.
Here are some key ideas from the talk, just in case you missed it!
Competing at Parity vs Pitching at Parity
You want to compete at parity. You want to keep pace with larger MSPs. You want to give clients 24/7 support. You want to enlist best practices and best-of-breed tools. You want to do what elite MSPs do, and you want to do it well. But there’s a problem with all of this.
The problem isn’t with pursuing parity per se — again, you want to keep pace with larger outfits and remain competitive and relevant. The problem arises when you not only strive to compete at parity, but pitch at parity, too.
A lot of MSP owners want to assure prospective clients that their service is just as good as the MSP down the street — perhaps a larger MSP, one of those revenue-gobbling ‘major players.’ And so, they spend their whole pitch talking about their 24/7 help desk, their tool stack, their shiny new cybersecurity toy — in short, the technical side of things.
The problem with this is that if you spend your whole pitch trying to sound just as good as the MSP down the street, you’re going to get what you wish for — you’re going to blend in with the competition. You’ve failed to differentiate, and the potential client has no reason to choose you — unless you’re the biggest or cheapest option.
So strive to compete at parity, but don’t pitch at parity. Pitching time is differentiation time; stand out, or lose the deal.
Let’s go over Tim’s advice for strengthening pitches to help achieve differentiation for your MSP business …
Tone Down the Technobabble
MSP owners generally come from technical backgrounds. They know computers. They like computers. And they like talking about computers. It comes naturally.
But during a sales meeting, your focus shouldn’t be on the technical side of your business — unless the potential client keeps steering the conversation that way (if you find a fellow tech person to geek out with, go right ahead!).
This bit of advice might sound counterintuitive. After all, you’re an IT company selling IT services. Surely, you want to talk about those services.
Of course, you want talk about your services and the technical side of your business — just be careful not to get carried away. Tim has, through The 20, worked with hundreds and hundreds of MSPs, and he’s noticed that a lot of them struggle with sales because they insist on keeping the focus on the technology, and not on what the technology can do and the problems it can solve. They make the age-old sales mistake of discussing ‘features’ instead of ‘benefits,’ and lose out on tons of revenue as a result.
If you can avoid making the same mistake, it can help you increase your close rate and capture new business.
Tim’s been selling IT services for decades, and has spoken with thousands of business owners. The conversations can go in all sorts of directions, but there’s one thing Tim always makes sure to ask a potential client: What’s your goal?
This simple question is a powerful one. It gets people talking. And it helps you better understand where they’re coming from and what they’re looking for. This is crucial, because you’re not selling technology; you’re selling solutions to problems. You can’t sell solutions to problems you don’t understand.
So ask prospects what they want. Ask them what they’re struggling with, what they’re looking for, what they picture when they imagine working with an awesome IT company. Ask away, and then listen. Really listen.
If you can do that, you’d better believe they’ll remember you. That is differentiation.
So, what do most business owners say? When Tim asks them, “What’s your Goal?”, what’s the response he gets most often?
“We Just Want it to Work!”
That’s right — by far and away the most common response Tim hears is: “We just want it to work!”
This is telling. Potential clients don’t care how their IT works, only that it works. They want computers that do what they’re supposed to do — and they don’t want to pay an arm and a leg for it.
This reinforces a previous point — tone down the technobabble! Technobabble is ‘how’ and potential clients don’t care about ‘how’ — at least most don’t. They just want assurance that your MSP is going to take care of their technology. Explaining how you plan to do that is putting the cart before the horse; before you get into any technical details — to the extent that you need to get into those details at all — you have to convince the person you’re talking to that you’re on their side and that you have their best interests at heart.
And how do you do that? By telling them how nice of a person you are, and how you’re not in this business to make gobs of money, but simply to help people?
No way! You convince them by explaining how it’s in your best interest to keep their technology running smoothly. In other words, you talk business alignment.
“This is about how we do business” – Shifting the Paradigm
As Tim reminded the Channel All-Stars audience, a lot of the business owners you (or your sales team) encounter in the sales process have had bad experiences with IT companies. They’ve been burned. They’ve been slapped with hidden charges. They’ve dealt with sluggish response times and unprofessional technicians. And they certainly haven’t experienced the type of robust business alignment that a really good MSP can give them.
It’s your job, then, to call their attention to the very possibility of such a thing. Really take the time to explain the difference between the break/fix model of IT support and the managed services paradigm. Explain how with your pricing model, you make more money when everything ‘just works.’ That will definitely get their attention!
Let your competitors brag about how their fancy solutions can keep things running smoothly, while you enlist a much more effective sales strategy: explaining why your MSP will keep things running smoothly. Put things in terms of incentives — in terms of goal alignment.
If you can explain the principle of alignment clearly, you can help business owners have an epiphany of sorts. They will realize: “This isn’t about price; this is about how we do business.” They will start to think about which MSP is actually going to give them this amazing thing called alignment. And they will think of you and your wonderfully clear explanation of how alignment works. You will stand out as the MSP that helped them see things differently — in a better light.
People remember people.
Think about movies you’ve seen. Do you remember the endings? The details of the plot? Maybe, but that’s probably not where your mind went first. What you remember — what pops into your head without effort — are the characters. Their faces, voices, ways of behaving. You remember the people.
What does this have to do with sales and differentiation?
Well … everything! When it comes time to pitch to a prospective client, you want to stand out from the crowd — to appear as a distinctive and appealing option and not ‘just another IT company.’ The best way to do that is by connecting on a human level. Don’t ‘pitch’ to prospects; talk to them. And don’t just talk; listen, too!
MSPs that are good at sales understand that the primary purpose of a sales meeting isn’t to impress potential clients; it’s to connect with them — to start building a relationship even before any contracts have been signed. Because in a sea of MSPs with similar-sounding services and selling points, a prospective client will remember the one with a human face.