2024 Update: How Big MSPs Become Big MSPs

It's no secret that the MSP environment is getting more competitive.  

Like you, your peers want their share of the market. 

Because we all know that more clients equate to more revenue and more clout, right? 

But that also means MSPs are growing in size. Whether that’s down to hiring top talent or being hyper-focused on expanding their client base, MSP growth rates are showing no signs of slowing down. 

That's probably because so many of you read our latest blog, where we told you that by 2026, the MSP market value is expected to reach 354.8 billion dollars. And now you all want your cut.  

While there are some clear advantages to being a big MSP, how do you actually become one? What route will lead you towards becoming one of the ambitious players in the technology sector? 

Or more importantly, how can you grow your business while winning new clients and expanding your current client base? 

Becoming a big MSP might seem like an overwhelming goal for you right now. But that doesn't mean you should stop trying to achieve it.  

We see MSPs growing and scaling their businesses daily (with thanks to CloudRadial, of course!), so we know it's possible. 

So, let's look at how you can achieve the same levels of success and become a big MSP. 

Step 1: Stop spending your time on manual work and low-return repetitive sales motions  

One more time for the people in the back: manual tasks and low-return sales efforts suck the life out of you and your business.  

Instead, focus on how you can increase the Monthly Recurring Revenue (MRR) you derive from each client. 

This means engaging with your clients in more productive, value-oriented ways so they feel valued and remain loyal investors.   

Because when you focus on improving customer satisfaction, delivering on [your] contract, and developing additional services [so you can] respond to additional needs of existing customers, recurring revenue will surely follow.   

It might seem like we are suggesting the obvious, and you're probably thinking, 'I just don't have the time...'   

But here's what a big MSP would do. 

They would invest in tech that would help them save time and resources, so they can reinvest that time into other areas of their business, like customer service.  

For example, a big MSP will: 

• Leverage automation to help strip away manual and repetitive tasks, reduce manual labor, and expedite routine tasks – giving their teams more time with their customers. 

• Invest in Smart Ticketing solutions that manage tickets based on urgency and complexity to minimize response times and maximize productivity. 
• Invest in customer-centric services such as a unified client portal to encourage customers to become self-sufficient and self-triage problems. 
• Implement robust security solutions to stay ahead of the game and detect any issues before they arise. 
• Encourage staff and clients to keep up with in-house training and skill development so they build strong teams that can carry every area of the company. 
• Ensure the tech they invest in is scalable, flexible, and always meets customer needs.  

Investing in tech that saves you time will enable you to focus on the activities that drive growth and MRR.  

Step 2: You must use your newfound time better 

Okay, so we have established that big MSPs have more time. But what are they doing with it?  

Vacation? 

Maybe next year. 

Yard work? 

The weather is just too unpredictable. 

Looking at their internal processes and seeing how they can revamp them? 

Spot on.  

But where do they start? 

Don’t sweat it. We’ve got you. You can start with these two.  

Process #1 – The QBR  

A scalable QBR process will enable you to achieve remarkable outcomes without exhausting resources.    

And, if you want to grow your MSP, then the QBR process should be an experience that immerses you and your clients into a pool of data, results, profits, cost savings, tech suggestions, roadmaps, and so much more...  

It's an experience you should both come away from feeling invigorated and empowered.  

Why? Because in a well-structured QBR, you can:   

• Afford to spend more time talking about growing existing client projects instead of going over old data to prove your worth.  
• Capitalize on opportunities to engage clients with more lucrative products and services, creating avenues for increased profitability. 
• Stop and listen to your client's feedback, hear their problems, and bring solutions to solve them.    

QBRs facilitate a continuous improvement cycle, allowing MSPs of all sizes to enhance the overall customer experience and secure additional business over time.  

The good news is that we wrote a whole blog on how to scale your QBR process. It's a 5-minute read. 

Process #2 - Tap into your client's budget 

According to research conducted by our CEO, Jeff Farris, 'If you want to become a big MSP, you need to get out of that technology budget and into the people/productivity and outcomes budgets.'  

'Large-class MSPs work their way into pulling more from those budgets than the technology budget.'   

And the good news? The productivity budget can be highly lucrative.    

Let's assume a typical worker's salary is $5,000 per month; keeping their PC bootup time low and removing the friction from cybersecurity measures might boost that employee's productivity by 10%.   

That's $500 a month.    

If your MSP bills $200 a month, it's a 150% return on your client's investment.    

Companies will invest heavily in software and services when you can deliver that kind of payback.   

And if you really want to grow your MRR, then you need to tap into the 'managing outcomes' budget.    

Unlike the productivity budget, your clients aren't necessarily looking for a traditional dollar return on the money spent from this bucket.  

They want something that will accelerate their business and enable them to grow to the next level. 

Your customers aren't just looking to capture a 10% return on their investment. They want to know how to turn $1,500 into $15,000 or even $150,000.  

Your customers know they need to make some big changes to go along with those big returns, and that's why this budget is key—the potential revenue lurking in the outcomes budget for an MSP is immense. If you want to be a big MSP in the sector, this is the budget you need to dip your hands into. 

But how do you get into those lucrative buckets? 

It's simple, really: with good conversation.  

Larger MSPs have figured out how to move from talking tech to talking outcomes. From talking about stack alignment to talking about business alignment.  

With a change in mindset and a new focus for client discussions, you can provide ways to help them increase productivity and level up their business. This opens an entirely new level of revenue. 

Step 3: Invest in your tech stack  

When it comes to growth, you'll want to invest heavily in your tech stack.  

After all, it is the backbone of your business. 

And if you don't design and manage your ever-changing stack strategically, you won't be able to create the stability needed to scale your MSP properly. 

But with so many solutions claiming to support your ever-growing business needs, it can be hard to cut through the noise and figure out what solutions you actually want to invest in.  

However, when it comes to growth, there's no better solution than one that houses all your business and client needs in one unified interface.  

And for growing MSPs, big MSPs, and all of the MSPs in between, CloudRadial has got you covered. 

Our Unified Client Portal integrates with your PSA directly, creating a highly productive and collaborative environment. Coupled with our powerful automations and integrations, we give time back to your team so they can apply their skills to tasks that will contribute to business growth.  

• We take client engagement seriously. That's why we provide self-service options so your clients can self-triage their own problems before picking up the phone and calling you.  
• We give you unlimited access to your client's data so that together, you can make more informed decisions that will benefit your business growth. 
• We help you scale your business to increase profits, maximize the value of your workforce, and attract your ideal clients.  

Because we get it, you don't need hundreds of solutions that all claim to do great things. But you do need solutions you can rely on so you can work towards becoming a big MSP.  

And that's why we know that CloudRadial is the solution for you. It really is that simple – let us show you. 

How Big MSPs Become Big MSPs 2023 Version: 

The MSP environment is getting more competitive, and to grow market share, some MSPs have become larger. More clients, more revenue, more clout. There are some clear advantages to being a big, ambitious player in the technology sector. If you’re interested in becoming one of those bigger MSPs, we’ve put together some insights and revealed a few secrets to help you get there.

Step 1: Get more time in the day 

Big MSPs don’t spend their time on manual work or low-return repetitive sales motions. They focus their efforts on increasing the MRR they derive from every client, and that means making the time to engage with clients in more productive, value-oriented ways. Because there’s only so much time in the day, the first thing you need to do is to make more time available for truly important activities. But you don’t get more time just by adding more people to the equation. Instead, you need to apply technology in the right places. 

• Leverage automations that enable you to strip away the manual work 
• Push repetitive tasks into a purpose-built self-service portal 
• Transform workflows that are outdated or unproductive into revenue-generating powerhouses 
• Tapping into technology these individual sub-steps are a good upgrade, but by putting them all together they make a proven strategy to create more time for yourself as an MSP. 

Step 2: Use your newfound time better 

Now you need to take the time you freed up in Step 1 and use it in more productive ways. That means revamping some processes as well as changing your mindset. 

Transform the QBR. 

By reconstructing traditional quarterly lookbacks and turning them into smarter QBRs, you can identify the areas of productivity and growth within your clients’ organizations that you can really impact. You’ll be able to understand each customer’s goals and pain points. With that insight, you can then identify much higher-margin opportunities inside that company. The self-service portal is a core element in making your QBR transformation a success. 

Get access to the right budget buckets. 

MSP relationships often begin within clients’ technology budgets, which is a good bucket of funds to use as an entry point. However, it’s also a highly cost-sensitive budget that can limit your long-term revenue. To become a bigger MSP, you have to get out of that technology budget and into the people/productivity and outcomes budgets. Looking across the industry, large-class MSPs work their way into pulling more from those buckets than from the technology bucket. 

The productivity budget can be extremely lucrative. Assuming a typical worker's salary of $5,000 per month, keeping their PC bootup time low and removing the friction from cybersecurity measures might boost that employee’s productivity by 10%. That’s $500 a month. If your MSP bills $200 a month, it’s a 150% return on your client’s investment. Companies are willing to invest heavily in software and services (read: pay you more) when you can deliver that kind of payback. 

Managing outcomes is the other budget that MSPs need to tap into to really grow their MRR. It’s about managing the key drivers of your client’s business. Unlike the productivity budget, they aren’t necessarily looking for a traditional dollar return on the money spent from this bucket. What clients want is something that will truly accelerate their business and enable them to get to the next level. In the outcomes conversation, customers aren’t just looking to capture a 10% return on their investment. No, this is where they’re willing to explore ways to turn $1,500 into $15,000 or even $150,000. Your clients know they need to make some big changes to go along with those big returns, but that’s why this bucket is key—the potential revenue lurking in the outcomes budget for an MSP is immense. If you want to be a big MSP in the sector, this is the bucket you need to access. 

Shift your thinking and change the conversation. 

How do you get into those lucrative buckets? It all comes down to the conversations you have with your clients. Larger MSPs have figured out how to move from talking technology to talking outcomes, from talking about stack alignment to talking about business alignment. With a change in mindset and a new focus for client discussions, you can support customers’ growth by helping them dial in and automate their solutions. You can provide ways to help them increase productivity and level up their business. This opens up an entirely new level of revenue. Remember those small MSPs that got to be big MSPs? They did it by getting more revenue per client, which means adding more value and moving up the value chain in client need. 

Step 3: Focus on your own growth 

To maximize your new free time for strategic things, like listening to your clients and learning more about what drives their organizations—all of which adds up to putting time into making your own growth a reality—CloudRadial has the tools and features to make it happen. Our CSA integrates with your PSA, creating a highly productive and cohesive environment. Coupled with our powerful automations, we give time back to your team so they can apply their skills and energy to higher-value actions that will move your business forward. Data gathering and analysis, routine communications, training, and other tasks can be turned over to our CSA to free up the time you need. 

Our platform also enables you to raise your client engagement to a new level. We provide self-service capabilities to empower your customers to do more for themselves and to deliver the transparency clients want. You can finally turn those old QBRs into forward-looking conversations with your clients about the outcomes they want to achieve and how you can help them do that. You’ll have relevant insights available to identify new opportunities to boost customers’ productivity and deliver truly meaningful ROI. Across these capabilities, we help you scale your business to increase profits, maximize the value of your workforce, and attract your ideal clients. To learn more about what CloudRadial’s self-service CSA solution can do for you and your customers, schedule a quick overview today.