How to Show Your MSP Value to Clients

Show your clients your worth and what downtime can cost them

Managed service providers often encounter clients who underestimate their need for business continuity and disaster recovery (BCDR). It’s not uncommon for small to medium-sized businesses (SMBs) to believe that it’s an acceptable risk to forego advanced disaster recovery services or business continuity protections.

Some small businesses still operate under the misconception that cybercriminals mainly target large enterprises because they potentially yield a higher ransom. In truth, bad actors have expanded their sites because they know smaller companies don’t necessarily have sophisticated cybersecurity protections, and law enforcement is less able to pursue hundreds or thousands of incidents against SMBs.

In fact, Verizon’s 2020 Data Breach Investigations Report found that 28 percent of all cyberattacks in 2020 were aimed at SMBs, and Blackberry’s 2022 Threat Report found that SMBs averaged “11 to 13 threats per device, a number much higher than enterprises.”

While educating clients about the risks they face is a good first step, the key to helping them understand the necessity of BDCR solutions is to quantify what business interruption or data loss could look like for them.

Explain Why Backup is Not Enough

SMBs may not realize that backup is only a portion of BCDR. Business recovery from traditional backup is time-consuming and costly. MSP clients should understand that a true BCDR strategy involves not only backup but also risk analysis, planning, and testing to ensure that business continuity can be restored quickly and with a minimum of extra downtime and labor. Even if clients are using a cloud-based service such as Microsoft 365 or Google Workspace, they will likely find that the small print in their agreements recommends that they maintain independent BCDR procedures to minimize downtime and recover data in the event of widespread outages ranging from weather to cyberattacks.

Companies also need to consider their overall tolerance for downtime caused by every day or site-wide disasters such as:

  • Hardware failures
  • Software or database corruption
  • Utility interruptions
  • Malicious employee actions
  • Accidental user errors
  • Fires or floods
  • Natural disasters

Thinking through the various scenarios that cause business interruptions can quickly focus clients’ attention on their current risk exposure. Have they defined their recovery point objective (RPO) and recovery time objective (RTO), and does their current solution support them? Estimating the cost of downtime then drives the point home.

Calculate the Costs Associated with Downtime

The Ponemon Institute’s Cost of a Data Breach report found that the average cost of a data breach in the U.S. in 2020 was $8.64 million. Of course, this is only an average figure, so it helps to engage in some customization of these numbers to make it easier to attach dollars and cents to a business continuity ROI value proposition for BCDR solutions, It’s essential to become knowledgeable about how to calculate the risks of going without robust services, and the costs savings associated with the rewards for having good protection. While the costs will vary from organization to organization (particularly once you consider indirect losses), the general equation is revenue/workdays per year ÷ open work hours = revenue per hour.

Imagine a company that earns $20 million per year, to apply an example. The company operates an average of 23 days per month, with about 12 operating hours per day. To understand the cost of downtime for critical systems, you’d start with that simple calculation: $20 million/276 workdays ÷ 12 hours per day = $6,000 in lost revenue per hour of downtime. When the hard costs of downtime have been effectively estimated, client companies are more likely to begin thinking about their tolerance for downtime or outages.

For more personalized downtime cost estimates for demonstrating ROI, Pax8 offers an easy-to-use downtime cost calculator. The calculator is an excellent tool for MSPs hoping to convey the urgent need for disaster recovery solutions to clients and prospective clients.

Building Your MSP Value Proposition for SMBs

The services offered by managed service providers are designed to work remotely and in the background, preventing problems with skillful resource management, proactive monitoring, and regular maintenance. In this way, MSPs are often victims of their own success: Clients don’t see the day-to-day operations, leaving them out of sight and mind. In the past two years, work-from-home and hybrid work models have resulted in even less visibility for MSPs in client offices. This makes it extra challenging to demonstrate managed services ROI effectively.

MSPs offering BCDR solutions would be well-served to create straightforward, easy-to-communicate value propositions for SMB clients to help them understand why they need comprehensive business continuity services. Ensure that these proposals are value-based and not just abstract technology descriptions. While it’s important to focus on response times and coverage, it’s also critical to include information to educate customers about measuring their MSP’s performance. If MSP-client relations are too basic and transactional, customers may miss critical information about the business relationship’s hidden value.

Some simple but effective steps to take to help your clients “grade” you:

  1. Share results of Health Checks – regularly sharing the results of your system verifications and checks and Health Report, and highlights of their overall system health, will demonstrate your ongoing commitment to monitoring a client’s needs.
  2. Don’t skip your Quarterly Business Reviews – it is easy to miss these important opportunities to interface with your client when busy schedules get in the way, but a top-down quarterly or biannual review is an opportunity to discuss what you are doing, and what you believe you need to do to ensure security and continuity in the future.
  3. Let your client know you are verifying and testing their backups – a popular feature of x360Recover does this by default; AutoVerify automatically virtualizes the latest backup recovery point for each system and runs numerous deep volume tests to check bootability, operating system health, data corruption, file system and application integrity.

Incumbent managed services providers have a natural advantage in that they already have an in-depth understanding of the client’s business and core systems. Savvy MSPs can parlay this familiarity with clients’ operations and supporting systems, as well as in-depth alliances with technology vendors, into a broad value proposition for protecting client operations built right into the service level agreement.

A Single Solution to Protect Client Data and Prevent Business Interruptions

Learn how Axcient x360 allows MSPs to deliver the right-sized and right-priced custom BCDR offering that the market demands so MSPs can build their business and gain profitability.

Start your free 14-day trial today to see having the right business continuity and backup tool like Axcient can ensure minimal downtime and business interruption while helping MSPs maintain a healthy bottom line.


More Great Stuff From Our Blog:

Check out some other interesting pieces from our blog: we examined the toll cybersecurity has on MSPs mental health and offered a comprehensive list of tools and resources to feel better.  Also, we dove into how chain-based backup works and why chain-free is the way to be, we talked with Jason Phelps from Huntress Labs about planning for the next ransomware attack, our CEO David Bennett explains why the current cybersecurity landscape means traditional backup is dead, or learn how you can ditch pricey on-site appliances with Local Cache for Direct-to-Cloud BCDR.