The Types of Growth
Growth can come in different forms – you can have a focused industry niche you’re targeting or go for a term called broad growth.
The two distinct categories go a little like this – they could be to grow your business like a panda slowly and over time, it doesn’t happen very often and it’s a bit of a celebration when it does although hopefully unlike pandas your new customers won’t all be owned by the Chinese government. Separately, you could grow your business like a rabbit grows its numbers, lots and lots of them very quickly, but they may not be the perfect fit going forward.
Don’t worry, this analogy will make sense as we progress through the article.
So, let’s break down these weird and wonderful analogies, by the Panda analogy, we mean a focused industry niche and a sector or particular industry vertical that you wish to specialise in and know everything about to allow you to grow your client base within that specific vertical. While that may reduce the number of potential new clients, it does allow you to focus your message and have a specific target lookalike audience in mind that you can reach out to with your marketing with a message that’s tailored especially for them.
To get success from that message and to be seen as a specialist within that industry vertical you need to know everything about them. You need to know what makes them tick, in fact perhaps you need to know more about them than they may know about themselves, and by that, I mean you need to understand regulation, compliance, and process, everything that’s really unique to that specific vertical. Be it Healthcare, Law Firms, Accountants, or Financial Services, whatever it might be, they will have something in their sector that is a specific regulation or working practice that they are forced to adopt, or perhaps regulated to adopt.
You must understand all of the nuances of that and make sure that you can tailor your message and ultimately the technology that you would serve for that market around that uniqueness, otherwise there’s nothing unique in your marketing message. You may also be required therefore to be involved in apps, tools, and services that are specific also to that sector – things that are well beyond Microsoft and the comfort of the normal apps and services that you would be involved with as an MSP. But only then can you define yourself as sector specific, how else can you stand yourself apart from the average Joe MSP that is a Microsoft shop if you don’t understand the CRM, the ERP system, any of the other specific software, apps, databases, tools, and cloud services that they would use within that particular industry setting?
That might mean you need to learn how to support those apps, be involved with the third parties, get involved with training and installation, migrations, things that you ordinarily avoid because they would be done by a sector specialist or perhaps the software vendor themselves, but it’s a great extra tool to have in your arsenal when reaching out to a specific vertical.
Another consideration is to involve yourself with membership bodies and associations perhaps even the regulator themselves in that sector, it’s a great way to stand yourself out from the crowd as the subject matter expert in the industry vertical that you are looking to target – lean on that association, get involved with guest writing content for their blog, get them to include you in educational material that they share to their audience. They aren’t going to be tech experts, so if they have a friend they can rely upon that is going to put out credible education on their behalf then I’m sure you will find they’ll support you more easily than you may first think.
Finally, by focusing on a particular niche you could actually benefit by having fewer customer, they are easier to manage, the account management is therefore simpler and could actually be a good opportunity for you to focus on increasing your margin while perhaps not necessarily increasing your turnover that dramatically. It could also be difficult for them to move away if you specialise in supporting all of their unique requirements with the business, they aren’t likely to find anyone else in the market that will rise to those same challenges.
Also, the age-old reliable source of leads such as referrals could reopen the opportunity to tap in the networks within certain industry settings, those industries that are well linked where people move from one business to another, or if there are relationships between those established businesses that’s something you can also leverage by being involved with a particular vertical.
Separately to the Panda model, the rabbit like growth we mentioned, in terms of broad non industry specific growth – might well mean that you are far broader and acquiring imperfect customers from that ideal perfect fit lookalike that you have developed over the years you have been in business.
But it does mean that you have the potential to reach out to a much larger market and ultimately -with the level of competition in the MSP space – when you’re playing the numbers game of needing to acquire net new customers that want to outsource everything from support across their cloud services, cyber security, BCDR, comms, all in one bucket to their MSP, then why should it matter which industry sector you go after. And arguably, to reduce risk – especially after what’s happened in recent years that the pandemic has shown with certain industries being affected more than others – you have the opportunity by balancing your client base across multiple verticals to infact reduce the risk that you might carry if one of those vertical happens to suffer in a particular recession or event as we’ve seen recently.
Along with the reduction in risk there is also the potential to reduce the reliance on your revenue coming from too few customers, the higher percentage of revenue from a smaller pool of customer the bigger risk you carry should you ever inadvertently lose on of them, getting more potentially smaller customers onboard could actually help you broaden and balance your risk across a bigger pool of clients.
As we explored with the industry specific message we will still need cards up our sleeve, a trick to play, to be able to break the ‘if it isn’t broke don’t fix it’ mentality that people have, the mentality where a usual SMB will not consider what’s good about good or bad IT support because generally it does the job when something is broken, so it is important to still have something unique to go out to them with.
To be able to think differently without going down a particular industry niche, and by think differently I mean propose differently to be able to have a unique message that makes them act and see you as a more viable alternative to their current MSP they have, you need to get under the skin of the business. The sales qualification process in meeting a prospect has got to expose operational commercial pain that you can address through tech, the automation app’s structure tools services that you can bolt on that actually deliver day to day value that saves them time reduces risk and increases their profitability. They are the things you need to focus your message on, less about proactive support, quick answering of the phones, and on time fixes, they are taken as a given you’ve got to focus on the things that matter most to them – the responsibilities, pains, drivers, and challenges that are sat on the owners shoulders of the SMB that you are trying to engage.
With an alternative proposal you may also be forced to look outside of your usual stack, engaging a small business customer that perhaps doesn’t know you well, you have to build up trust and report with them before you can sell your full stack, just as you have with your existing client base over a number of years.
Try and engage them around something that is a unique to them that may force you to change your pricing model entirely, while that isn’t ideal, to have different customers on different grades of plans, the market is changing, were now not only competing against other msps to sell our services, we are infact competing against the vendors and other SaaS operators to too, people that are specialising in certain verticals or are wrapping a product around a specific need and making as commoditised as possible so lumping in too much behind one price could be too much for someone to digest now, if there is a myriad of other option available on the market.
by tailoring your proposition you also get the benefit of stronger involvement with that business, you set off your relationship on the right foot, that you’re an integral part of what is going on if you’ve solved a big problem that they have got by going above and beyond in tailoring something unique, think about how loyal they are going to be to you as a supplier, and keep you for far longer than they would an average service that the4y receive that isn’t particularly tailored to them.
Think further about adjusting that proposal and rapping around the great tools and services in a way that the prospect will understand, an easily understandable price point that the prospect will understand and value.
So in summary you can either grow you numbers like a panda, be laser focused, chipping your way for that perfect fit customer and possibly grow but slowly, it carries risk in the numbers getting enough leads to get enough conversions – and of course the time and energy it takes to get those leads an get that position and respect in the market to get those inquiries in the first place .
Plan to grow your numbers like a rabbit would, appreciate that sales is potentially a dirty business, it’s a grey area its very different to those referral needs that you have been reliant on in the past, finding perfection of course is tough, so if you want to achieve growth then you need to understand that perhaps that growth will not be perfect.
But it is newer relationships, relationships you can cultivate over a period of time, you can shape that lump on marble into the statue, but it will take along time to do that, and it’s a journey that you have probably gone through before with your existing customer base, and you need to be prepared to go through that journey again as you acquire new customers through proactive growth. So, be prepared to alter your perfect idea of a working relationship your proposition your price your stack of services to win those new customers that you need and want.
Thank you for reading, we hope you found this information useful – if you are an MSP and you’re looking to grow we’d love to help, please get in touch with our expert team and see how we can help you.
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