Common mistakes growing MSPs make

As an MSP business grows, it becomes more susceptible to making mistakes that, in a crowded market, can cost the organization heavily. Here are some of the most common mistakes made by MSPs that you need to avoid in order to outperform your competitors.

Mistake#1: Improper communication

  • Getting too technical

    Assuming that you'll impress your clients by using excessive technical jargon while explaining your services is not a good idea. Not all clients are as well-versed with the technical intricacies associated with IT. Try to address the knowledge gap by using simpler terminology and keeping jargon to a minimum.

  • Not discussing expectations and deliverables beforehand

    MSPs sometimes end up assuming that their clients understand all the possible outcomes of services they're opting for. In reality, most clients do not have a good idea of the technical risks and benefits associated with each service. If something goes wrong, you can't expect a client to understand the issue, as it's unexpected to them. You must communicate all the risks and benefits associated with a service before the client opts for that service.

Mistake#2: Overpromise, under-deliver

Overpromising, a.k.a. overselling, creates false expectations in the minds of your clients. When securing a new client, overpromising (or selling expertise you lack) may seem like a good option, but once the dust settles and you fail to deliver the promised level of services, you'll lose your credibility.

Losing business isn't the only bad outcome of this—you may also end up in the middle of expensive lawsuits. A better alternative is to highlight your solutions and the capabilities that you'll actually be able to offer. Focus on your strengths to build a base of loyal customers.

Mistake#3: Lack of standardization

One of the most common mistakes made by MSPs is not standardizing the equipment they provide to their entire client base, such as routers, printers, switches, servers, and workstations. Standardization makes the update and configuration process identical across all similar devices and software. It also allows you to train your technicians more easily and faster. In short, standardization increases an MSP’s efficiency manifold.

Mistake#4: Flexibility: Over or under

  • Over-flexible with service offerings

    As discussed in the previous point, standardization works wonders. MSPs should bring standardization into their service offerings as well. Providing three or four bundles (like Silver, Gold, and Platinum) is the right way to do it, but some MSPs end up offering six to eight bundles, which is too much. With that many different bundles, maintaining the service levels for all clients becomes a nightmare for technicians.

    It's very important to have standardized solutions for streamlined service delivery. Flexibility is important as well, but it should not come at the cost of efficiency. Offer only what you specialize in, and offer it in limited, standardized bundles. This will eliminate confusion and lead to smoother business transactions.

  • Not being flexible enough

    Some clients will want you to provide end-to-end services, while some just want to pay for the services they require. Since no two businesses are alike, it's necessary to be a bit flexible in terms of service offerings in order to cater to different types of clients.

Mistake#5: Inconsistency

Companies opt for MSPs as they provide prompt service delivery and maintain smooth functioning of their clients' IT infrastructure. However, a rising number of SLA violations and unattended tickets may lead to discontinued partnerships.

Therefore, focus on issue resolutions without SLA violations. Proactively manage your client’s infrastructure to avoid escalation of incidents, which not only decreases downtime for the client but also provides you with some breathing room.

Mistake#6: Failure to measure success (or failure)

Stats matter! It's essential to keep an eye on your key performance indicators (KPIs) in order to assess the progress of your business. KPIs such as revenue, billable/non-billable hours, average response time, and customer satisfaction are essential for new MSPs to look out for, as these numbers give you a clear picture of where your organization stands and what areas need improvement.

Set realistic goals and measure your progress over time to stay on track as your business grows. Measure marketing endeavors by time spent, effort put in, and leads generated, and look at sales efforts from the perspective of the number of leads converted into clients. Keep measuring these KPIs, as they show you which areas are doing well and which are not, as well as which areas can be tweaked a bit to get better performance.

Mistake#7: Trying to grow too fast

If you eat more than your fill, you'll end up with a stomach ache. Similarly, if you close more clients than you can service, you're going to end up with a lot of unhappy customers, along with exhausted, overworked employees.

MSPs face understaffing issues more often than other businesses, which sometimes results in an MSP hastily hiring candidates that are unfit for the team. Take your time and make appropriate strategic decisions to stay focused on delivering better services to clients rather than overloading your staff with extra work.

Mistake#8: Underdeveloped marketing strategies

Every business has its ups and downs. A marketing plan acts as a remote control to your thermostat, helping you increase or decrease the temperature (get fewer or more leads) based on what your needs are at the time.

Some still believe that hiring more sales people will bring in more clients, but that's not how it works. To get more clients, you need more leads. And in order to get more leads, you need to have a marketing strategy in place. Be it advertising, cold-calling, or a social media campaign, these are all part of your marketing strategy.

For a budding MSP, it's essential to find the formula that delivers just the right amount of business to your organization. Once you find that, you'll be able to develop the right kind of marketing strategy based on your requirements.

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