How MSPs Can Tackle New Verticals for Their Business
As a managed service provider (MSP), you’re well aware that the market can be challenging. You have to retain your existing customers, often expanding your services for them as they grow, attract new customers and of course, run the rest of your operations at the same time. Unlike other businesses, further expansion or acquisition for MSPs can require technological and sometimes staffing changes.
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Even with the challenges they bring, new customer acquisitions are especially important for your business. You can’t grow or expand without them. But where do you start? If you’ve been in business for a while, you may be used to clients coming to you via word of mouth or your marketing efforts. If you’re a newer business or have exhausted your existing client network, however, you might have to try to acquire new accounts more strategically.
One way to start this process is to identify key verticals in which you believe you can be competitive and reach new customers. While it seems like a daunting task, rest assured we can help guide you through this process.
Why new verticals?
Why should MSPs bother looking for new verticals to tackle? With regards to new client acquisition, MSPs start their search for a few crucial reasons.
- Current verticals are declining: Different verticals do well in different situations. Perhaps you had a strong presence supporting retail, but are now finding that customers are reducing their technology spend due to industry challenges. This happens periodically in every vertical, which is why it’s good to diversify and seek out new industries to serve.
- New and emerging industries: Just as some verticals decline over time, new verticals appear and thrive. It’s wise to keep an eye on the market and determine if any new sectors could be a good fit for your business. AI, IoT, 3D printing and cannabis are some examples of verticals and connected businesses that have seen enormous growth in the past few years.
- Growth needs: Sometimes your current verticals are doing just fine in the market, but you’re still unable to meet customer or revenue growth targets. This could drive you to look at other verticals to increase your customer base overall.
Choosing new target verticals
Now that you’ve identified reasons for expanding into new verticals, you have to decide which ones to target. There are many factors to consider when making this decision.
- Industry expertise: Do you have expertise in this new vertical? Perhaps you have an employee who used to work in IT for a hospital, so you technically have some healthcare expertise. Survey your existing clients, too. You might have connections in an industry adjacent to one of your current verticals that you could easily expand into. Figure out where your strengths are and play to them!
- Location: Sometimes being in the same geographic area can be beneficial to you and your clients. You can meet with them in person, they can tour your offices or vice versa—you can easily establish a human connection. These benefits are possible with clients in other regions, but are generally more difficult. A customer might like the idea of being in the same city.With that said, look at popular or prominent industries in your area. Are there many manufacturing plants? Biomedical research centers? Tech startups? Figure out the flavor of your particular city and see if those industries have technology needs your MSP business could help meet.
- Recommendations: Recommendations from your existing customer base are the easiest way to get new clients. If you have customers with connections to an industry you’re interested in, consider asking them to speak on your behalf or arrange an introduction.
- Market growth: Even if you have no ties to a specific vertical, you can still go after it. This is especially true for new and growing verticals, which may not have set providers with set expertise yet. Get to them early, earn their trust, and you could see exponential growth alongside them—and all their friends who also work in the industry.
Do your research
Once you’ve identified new verticals to target, it’s time to do the research. This step is one of the most critical, as attempting to break into a new industry unprepared could prove disastrous for your reputation with multiple customers.
You want to know everything there is to know about your chosen sector and the businesses operating in it. Some questions to start with are:
- What problems do they have that you might be able to solve?
- What tools do they use?
- Do they have specific compliance requirements?
- Do you have anyone you can turn to for industry advice?
- What’s your competition in this vertical?
Develop an offering
You’re ready for the final step: developing an offering. After doing your research, you should be familiar with what your new target market needs and be able to tailor your services accordingly. You’ll be much more appealing to new clients if you have bundles and services that apply only to them.
This doesn’t mean you have to rework your entire portfolio and skill set! Ideally, you’ll want to play to your existing strengths and make some tweaks or combinations here and there. If you’re stuck on this step, Sherweb can help—assisting our partners with business strategy is one of the main pillars of our business.
Go for it!
When you’re ready with your offering, it’s time to execute. But how do you make sure you break into your new vertical successfully? There are several options.
- Leveraging existing contacts: Having contacts in the industry is a clear advantage. Leverage them as much as possible for references and networking opportunities.
- Create a referral program: Even if you don’t have contacts within the industry, you have customers that are happy with your services. Creating a referral program to reward your customers for referring you to their peers is a great way to incentivize this behavior.
- Events: All industries have events. Sponsoring one can be a great way to get your name out there, but if you can’t do that, at least attend and network. At the very least, you’ll gain valuable contacts.
- Make cold calls: Old fashioned cold calling and personal 1:1 emails are tried and tested. Hit the phones and keyboards and wait for results!
Work with a partner dedicated to your success
Sherweb is here to support you throughout this entire process. We have in-house experts and access to ideas from more than 6,000 partners to help your MSP business reach its full cloud potential. Check out our Partner Guide to learn more!