Top 5 Ways to Increase MSP Business Revenue
The global MSP market was valued at more than $267 billion in 2022, with an annual growth rate of 13.6% over the next decade. This surge of growth for MSPs is due to the sharpening need for a well-constructed IT infrastructure for businesses to keep operations up and running.
Gaining a foothold in this market isn’t easy, however.
Growing an MSP business requires a scalable revenue model. Steady and predictable income boosts vital cash flow and MRR and lessens the uncertainties around running an IT business.
To help set you up for success, we’ll discuss five ways MSPs can scale their business — and how Secureframe can help.
5 strategies for MSPs to maximize monthly recurring revenue
The MSP business model allows for flexibility, with some managed service providers choosing to serve a specific vertical or specialize in a key segment like data storage or remote firewalls. Understanding the market, competitive landscape, and the needs of your specific customer base will help you identify gaps and opportunities for business growth that suit your specific business.
Here, we outline five growth plans that you can tailor to your business.
1. Refine your pricing strategy
Per-device, per-user, all-inclusive, a la carte, tiered or subscription-based — does your pricing model match the needs of both your clients and your service business?
An effective pricing strategy allows managed service providers to serve their customers while maximizing profits. Whatever pricing model you choose, keep it simple and transparent. Your customers should always understand exactly what they’re paying for and the value they’re getting for their money.
2. Prioritize customer retention
According to research by Bain and Company, a 10% boost in customer retention can increase the value of a business by more than 30%.
Customer acquisition is expensive. The fastest, most sustainable way to grow revenue is by retaining your customers over the long term. Not only will they often upsell, but happy customers are also more likely to provide valuable word-of-mouth marketing and new customer referrals.
Optimizing the onboarding process is the critical first step in setting new clients up for lasting success with your business. You should have a customer onboarding process that is well-documented, efficient, repeatable, and scalable. Design your onboarding process so that new customers experience value as soon as possible.
MSPs that position themselves as trusted advisors win customer loyalty. Be proactive about staying in communication by letting customers know about any new services, opportunities to participate in pilot programs, etc., as well as conducting regular check-ins about their level of satisfaction with your services.
If you’re in regular communication with your clients, asking about their business needs and how their security posture is serving the organization, you’ll already know the problems they’re facing and the opportunities you have to meet those growing needs. And your clients will know without a doubt that you’re able to provide the level of support and services that they need as their business expands.
3. Upsell and cross-sell existing customers
Many customers onboard with an MSP to solve a single issue, such as network monitoring. As their business grows and their security and compliance needs become more complex, there’s a real opportunity to upsell them to a more complete or robust suite of services.
This is only possible if you invest in building customer trust. If you don’t, customers will more than likely switch to another service if they lose confidence in your ability to meet their changing requirements.
The solution is to be proactive. Regularly review each client’s needs, verify that there’s alignment between those needs and the services you provide, and map a course for where they want to be and how you can help them get there.
4. Offer add-on or bundled services
Given the growing complexity of security, privacy, and compliance, there is an increasing need for services that can help clients with the finer points of building and maintaining a robust cybersecurity and privacy posture.
Offering additional services such as compliance and risk management, IT infrastructure management and remote monitoring, user access management, mobile device support, and specialized consulting can help clients navigate this growing complexity while building their trust in and reliance on your MSP.
The goal is to offer a variety of services beyond one-time support requests. Recurring IT services that can be billed annually, quarterly, or monthly are an effective way to grow a predictable revenue stream. Consider offering:
- Remote monitoring
- Backup services
- Cloud infrastructure support
- Mobile device support
- Specialized consulting services
Industry-specific marketing campaigns or offering bundled services for specific verticals can help you cut through the noise and unlock channels for new MSP leads.
5. Aim to deliver an end-to-end security service
As their security and compliance needs grow, customers are looking for an MSP that can deliver a comprehensive solution rather than a collection of point solutions. Including compliance-as-a-service enables MSPs to deliver an end-to-end security service and help clients achieve compliance with SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA, and other key standards, laws, and frameworks.
SMBs expect to increase IT spend significantly (by approximately $90 billion!) through 2026. MSPs that broaden their security services to include compliance-as-a-service will be in the foremost position to seize this growth opportunity.
Increase your MSP profits with Secureframe
Secureframe’s automation platform paired with in-house compliance expertise can help you better serve your current customers and bring in new business by offering compliance-as-a-service.
MSP business owners can bring new value to their customers with:
- Increased ability to compete. By complying with security and privacy frameworks like SOC 2 and ISO 27001, companies can gain an edge on non-compliant competitors and win more deals.
- Faster scalability. Security compliance enhances an end customer’s ability to expand into new markets and move upmarket to sell to mid-market and enterprise clients.
- Reduced risk. Implementing Secureframe features, including continuous monitoring, automated tests, and vendor risk management helps ensure that end customers are proactively assessing and improving the security and privacy of their IT systems, people, and processes.
- Increased employee vigilance. Secureframe’s proprietary compliance training ensures end customers have a centralized solution for security and privacy awareness training, helping them avoid costly mistakes like falling for a phishing attack.
- Accelerated deal cycles: Secureframe Questionnaires helps end customers respond to RFPs and security questionnaires fast with AI, enabling them to provide answers back to their customers to accelerate deals, unlock revenue, and better compete. Plus, the Secureframe Knowledge Base serves as the end customer's compliance system of record, storing accurate and up-to-date details of their security and privacy posture.
Learn more about Secureframe’s world-class MSP program to see how we can help you grow your profit margins.