Increasing Monthly Recurring Revenue: A Guide for Managed Service Providers

In the fast-paced world of IT support, being a Managed Service Provider (MSP) comes with its fair share of challenges. From juggling multiple tasks to keeping up with the latest technologies, MSPs must constantly evolve and adapt to meet the needs of their customers. This article will explore how MSPs can increase their monthly recurring revenue (MRR) while maintaining customer satisfaction and security.

Creating Value with Quality Service

An essential truth of business is that customers pay for value, and a high-quality, reliable service is no exception. There's a prevalent fear among many MSPs about raising prices or charging separately for different services. But it's important to remember, as Warren Buffett says, "Price is what you pay, value is what you get." If you consistently deliver a top-tier service, customers will see the value and be willing to pay for it.

Separating IT Support and IT Security

With increasing cyber threats, IT security has become a significant component of an MSP's offering. As the global cybersecurity landscape evolves, so too does the need for robust IT security. However, many customers may perceive this as a steady increase in their IT support costs.

Try this approach: separate the 'IT Support' and 'IT Security' line items on their invoices. It helps illustrate that it's not the cost of IT support that's climbing rapidly, but the security aspect that's increasingly essential in our digitally connected world.

Cybercrime: The Invisible Threat

One way to explain the rise in IT security costs is to draw a parallel to physical security. In the past, the locks on our doors were enough. Today, we need alarm systems, CCTV, and even private security to protect our premises. Cybersecurity is no different.

As cybercrime continues to pose a significant threat to businesses, the need for robust IT security has never been greater. This rising threat is the invisible burglar, one that carries low risk for high reward for the criminals involved. Highlighting this point to your customers can help justify the need for enhanced security measures and, consequently, increased spending.

Creating Sticky Customers

The term 'sticky customer' refers to a customer that continues to use your services, despite price changes or competitor offerings. Creating sticky customers comes down to building strong relationships, delivering exceptional service, and showing customers why your services are worth the price tag. These customers understand the value of your service and are willing to pay for the peace of mind you provide.

Understanding Customer Goals

Establishing regular meetings with your customers allows you to better understand their personal and business goals. Whether it's ensuring their data's security, improving system efficiency, or preparing for potential cyber threats, aligning your services with these goals can drive customer loyalty and increased MRR.

It's often said, "People don't buy what you do; they buy why you do it." This understanding highlights the importance of connecting with your customers on a deeper level. Understanding their needs and delivering on them can build long-term, profitable relationships.

Final Thoughts

Increasing your MRR isn't about squeezing every penny out of your customers. It's about delivering value and helping them understand the real-world implications of their IT choices. So, when you present them with a choice between greater security or potential vulnerability, most will happily increase their IT spend to protect their businesses.

Incorporating strategies like these will not only increase your MRR but also position your MSP as a vital business partner for your customers. It's this partnership that builds sticky customers and a sustainable business for you.

Remember to continually evolve and adapt to the changing landscape of IT support and security. As Robert Kiyosaki once said, "The single most powerful asset we all have is our mind. If it's trained well, it can create enormous wealth." So, keep learning, keep adapting, and keep creating value for your customers.