Grow Your MSP Margins

Last Updated:
January 31, 2024

Grow your MSP Margins with GO-Global

According to MSP360, which provides MSPs with backup and IT management solutions, typical MSP gross margins range from 8 to 18%. How can MSPs grow those margins and enjoy greater profitability? Read on!

Optimize Operations

Standardization

Standardize processes and technologies to minimize complexity and increase scalability. This can lead to faster service delivery and lower an MSP’s costs. It also frees up employee mindshare to tackle more strategic challenges that can accelerate growth.

Automation

Implement automation tools to streamline repetitive tasks and improve operational efficiency. This can reduce labor costs and free up resources for more strategic and profitable activities.

Capacity Planning

Optimize human and technology resource allocation to ensure that you're maximizing the effectiveness of your team and your technology investment.

Stay Current

Keep abreast of new technologies and trends in the industry and stay alert to solutions that will improve or enhance your existing operations. Being able to offer cutting-edge solutions can make your services more attractive and justify premium pricing.

Personnel

Remote Workers

Leverage remote work capabilities to tap into a global talent pool, potentially reducing labor costs. Just be sure prior to hiring that you can fairly and accurately measure remote worker productivity and performance—and be sure that you provide remote workers with the appropriate training, have reasonable job performance expectations, clearly communicate those expectations, and manage remote workers as if they were local.

Training

Ensure that your employees are thoroughly trained on the technologies used by your business to deliver services, and that training is ongoing. Most vendors offer complementary ongoing training and usually provide partners with discounts or allowances for in-depth training classes. Well-trained employees make fewer mistakes and better decisions, lowering your overall costs.

Packaging

Standardization

Bundle your services into standard service packages to streamline sales efforts, onboarding new customers, and managing existing accounts.

Value-Added Services

Offer additional, high-margin services that complement your standard service packages.This could include security services, data analytics, or strategic consulting.

Industry-Specific Services

If your organization includes individuals with specific industry experience, leverage that expertise to create service packages that address industry-specific challenges for which you can charge a premium.

Pricing

Tiered Pricing

Offer different service tiers with varying levels of features and support, allowing clients to choose the level that best fits their needs. To avoid customer service issues, and set appropriate customer expectations, make sure that the KPIs for each service tier align with the services in that tier.

Value-based Pricing

Align pricing with the value you deliver to clients for a particular service. This approach requires a detailed understanding of your market’s pain points, needs and priorities, which will enable you to position and price your services appropriately.

Customer Service

Feedback Loop

Establish an ongoing feedback loop with clients to understand their evolving needs, make continuous improvements to your services, and uncover new business opportunities with existing customers.

Account Management

Initiate an ongoing dialog with customers to uncover issues before they become problems and to identify ways to expand your business with each customer. You can also leverage customer conversations to get insights into specific market needs and interest level in new technologies to inform your own business expansion plans.

Satisfaction Surveys

Conduct an annual customer satisfaction survey that covers all aspects of your business. Customers appreciate the opportunity to be heard, and the survey results can  be used to address emerging vendor issues, uncover new service opportunities.

Upsell/Cross Sell

Leverage your customer feedback loop and train your staff to identify opportunities with existing clients to sell them new services, move them to a higher service tier, or to take advantage of your value-added services.

Vendors

Vendor Management

Build positive relationships with vendors. If you can, assign a specific individual on your team as a vendor’s primary contact for continuity and familiarity. (NOTE: this arrangement is essentially account management “in reverse”.) As that person builds a relationship with the vendor, it’s easier to negotiate favorable terms, be consistently informed about product updates and get early new product previews, learn about deals and specials, and deal constructively with technology and service issues. In most cases, one person can manage multiple vendors, but beware overloading one individual, however talented they are.

Vendor Reviews

Conduct a vendor review with the appropriate team members, including account managers and helpdesk personnel at least semi-annually, and include feedback loop and customer satisfaction survey data to uncover issues before they start significantly impacting your customers and business. Share the data with the appropriate vendor in an unbiased manner to address and neutralize issues.

Leverage Discounts & Programs

Maximize your vendor relationships. Stay apprised of vendor specials, educational opportunities, and marketing programs and participate when appropriate. Track your successes and failures to help you improve your results in future programs.

Replacing Vendors

Replacing any element in a cloud infrastructure is a monumental task for an MSP, so be thoughtful and deliberate in your approach. If your helpdesk, customer feedback programs, and internal vendor reviews uncover ongoing vendor issues that are adversely affecting your business, avoid a knee-jerk reaction. Assemble the data you’ve collected, present to the vendor in question in as fair-minded away as you can manage, and work with the vendor to neutralize the issue. If the vendor won’t budge, vet and select replacement vendor candidates, and test, test, test prior to deciding and implementing. Let the new vendor know about the switch—they may have experience and/or tools to help you. Additionally, knowing that you’re unwilling to tolerate bad behavior will put your new vendor on its best behavior.

If you’re an MSP looking to improve your margins, and you’re using VDI or DaaS to deliver Windows applications as SaaS, consider GO-Global.

GO-Global was purpose-built to publish Windows® applications from any cloud—simply, easily, and cost-effectively. GO-Global’s client-server architecture and highly efficient proprietary communications protocol delivers a great user experience, even on low-bandwidth connections, reducing calls to the helpdesk.

GO-Global helps MSPs cut costs from an infrastructure perspective, too. When deployed on any MSP’s cloud service, GO-Global leverages that cloud service’s existing infrastructure and security and scalability features to deliver high functionality with less complexity and cost.

And, Managed Service Providers that join GO-Global’s Premier Partner Program receive generous partner discounts, marketing resources, product training and support, and partner program support, cutting your costs and building profitability.

Learn more about the Partner Program here.

Request a demo here.

Download a free 30-day trial here.