The Do’s and Don’ts of Choosing the Right Clients for MSP Growth

When it comes to expanding your MSP, the quality of your clients is more important than the quantity. Breach responsibility is landing on service providers, so if clients aren’t willing to follow your BDR guidance, you’re assuming liability for their data loss. So how much are you ready to risk to get a new client?

It’s easy to assume that the more clients an MSP have, the higher profitability they must be obtaining. Fortunately, it’s not just a numbers game. In today’s cybersecurity landscape, not all clients are valued the same because not all clients are willing to protect their data according to best practices. This puts MSPs in the unique position of turning down new clients when your security values aren’t aligned. Luckily, a like-minded client’s return on investment (ROI) is much more than just monetary.

In this article:

  • Understand how saying “yes” to too much can damage your MSP.
  • See the value of streamlining your tech stack for cost, recovery, and security benefits.
  • Discover how paid prospect assessments can identify the right clients for your MSP.

Don’t: Accommodate Disparate Solution Demands

It’s common for MSPs, especially those just starting out, to agree to any client demand in a race to grow the business and reach profitability. With each new technology added to an MSP’s stack, the MSP must invest its own management resources to support it. Technicians and help desk support staff have to learn the ins and outs of a new product, which distracts from daily responsibilities, prevents mastery over a single solution, and can often increase recovery time depending on the scale of a breach. In addition, increasing tech stack complexity increases the complexity of managing that stack.

Additionally, financial services have to integrate a new unique billing process. And suppose the MSP is planning to profit from the additional solution. In that case, the marketing team will need to understand the features and benefits to develop sales collateral, campaigns, and strategies for selling the solution and updating external communications as necessary. The sales team will also have to integrate these materials into outreach with new and existing clients without confusing them or putting one solution above or below the others. Consider these downstream costs and resource demands before agreeing to new and unfamiliar technology. It’s not as easy as it may seem.

We had about 25 different backup vendors, and we were spread too thin. You can’t focus on any one vendor or product. There are different training plans, different product support, compression is different, retention is different, and they all do different things. We wonder how we did it at 25.

– Neil Hawkins, Partner and COO at LANAIR Group, LLC

Do: Standardize Your Tech Stack

Standardization equals simplification, which provides many benefits if you choose the right vendor and solution. An all-in-one solution that enables standardization frees MSP teams to hone their focus. There is demonstrable value in technicians mastering the management and recovery processes of a solution for faster time to recovery or the sales and marketing teams optimizing dedicated campaigns that have a noticeable impact on sales growth. By reducing the complexities that lead to vendor sprawl, MSPs can reduce overhead expenses to increase profitability while reinforcing data security. With fewer vendors, there are fewer unique processes to manage, resources required, and fractures within your teams.

Education is key to explaining the need for standardization to clients. In fact, it’s in their best interest to have a focused, knowledgeable, and organized MSP during data loss incidents. Rapid recovery can only occur if a technician is trained and well-versed in their BCDR solution. Standardization is also beneficial to meeting cyber liability insurance demands. Not only does it help the MSP complete those lengthy questionnaires faster and easier, but a standard stack reassures insurance carriers that the client will be able to recover quickly and thoroughly. That extra confidence from the carrier can result in the client receiving a better rate on their coverage, which directly impacts their bottom line.

When we weren’t standardizing the network infrastructure, we were doing ourselves and our clients a disservice. It was really hectic; we had way more tickets, and people didn’t know how to support the gear, making it really hard for our clients and us to work together.”

– Matt Kuzba, VP at NSR Business Solutions

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Don’t: Allow Clients to Forgo Data Protection

As service providers to SMB clients, MSPs often confront budget-conscious clients who are resistant to the financial burden of “unnecessary” data protections. Unfortunately, MSPs can sometimes allow the desire for new client growth to cloud their judgment. Perhaps they let the client choose a reduced package with less support just to close the deal. The problem is that when data goes missing and that client doesn’t have the backup protection for recovery, their MSP will hear about it. Sure, written acknowledgments and waivers of complete protection can help cover your a$$ (CYA) with clients, but it doesn’t hold up in the court of public opinion, nor with state regulators.

New state laws hold MSPs responsible for data loss, which means that your MSP could be held liable for lost data. In addition to potential fines, legal fees, and the headache of being involved in such a case, most states with these laws require a public record of the breach. That kind of negative publicity can damage your MSP’s ability to gain new clients and retain existing clients. So ask yourself, is it worth risking your own business to allow a client not to protect theirs?

Do: Require Comprehensive BCDR as Part of Your Contract

Create a standard BCDR package that clients must adhere to if they want to partner with your MSP. It should include the basic protections you feel comfortable allowing clients to maintain. If a client is unwilling to take on your standard package, then it’s a red flag for the relationship, and you’re probably better off moving on. Alignment on the importance of data security and respect for your position as a security authority with their best interest at heart is key to a successful MSP/client relationship.

Again, education is critical to helping clients understand why you require the protections you do and what the value is to their business. Leverage recent breaches that have gone public tell your own first-hand stories of clients who have and have not been protected, utilize the demands of cyber liability insurance providers, and apply the use of risk assessments in your marketing strategies or as a first point of contact with new clients. In the words of Toby McGuire, “Help me, help you.”

Don’t: Waste Sales and Marketing Resources on Any Old SMB

Historically, just like any SMB, MSPs struggle with sales and marketing. However, without the budget and manpower for fancy data-based tools that do much of the prospecting for you, MSPs can cast too wide a net and blow their budget without much ROI. Sure, there are a lot of low or no-cost sales and marketing techniques to think about, but in this blog, we’re talking about new client growth, and paid risk assessments are a great way to get to know your prospects.

Do: Vet Like-Minded Clients Early In The Sales Process

Risk assessments are a valuable tool for both MSPs and their clients. It provides an overview of the security tools and solutions in place within a client’s environment, which means that it also calls attention to potential weak spots. Not only does a client see their business through a data security lens, but MSPs see current or potential clients in a new light. Many MSPs complete these assessments after a client has already signed their contract, but using them as a prospecting tool can help MSPs qualify their leads.

Charging for a risk assessment before signing a client is controversial because a good risk assessment requires a lot of work from the MSP and provides a lot of value to the assessed business. Because of that hard work and the necessary resources, the assessment carries a monetary value. If you charge that amount before signing a client, you’re asking them to trust you with their environment and telling them that you prioritize data security. A prospect that doesn’t align with that prioritization of data security probably won’t agree to the risk assessment as the first step to partnership. And as we discussed above, that’s ok.

However, a client who agrees to pay the fee – which most MSPs then discount from their first bill if they become a client – shows you that they align with your security values. It’s a key differentiator in identifying the clients best suited for your MSP while weeding out the ones who aren’t a good fit. Color-coded visual cues like red, yellow, and green help convey the risk assessment results to clients and create a roadmap to the future where the goal is to turn everything green. Risk assessments are also helpful in educating clients about why you standardize or demand a certain level of data protection. For example, seeing their environments in a sea of red security vulnerabilities helps clients understand your concerns over their ability to protect their data.

I think of risk assessments as a multi-faceted tool. It can be used with a prospect, but we also use it with clients who just don’t get it. In addition to being an assessment tool, it is also a risk mitigation tool so we can be sure they are aware of the challenges and gaps, and we have coverage for that risk if they choose not to address it.

– Steven Tracy, Director of Managed Services at Entech


Learn more about The State of the Security Landscape

Do: Explore Your Growth Potential with Axcient

Axcient’s all-in-one x360 Portal gives MSPs comprehensive BCDR with x360Recover, Microsoft 365, and Google workspace backup with x360Cloud, and secure sync and share with x360Sync. MSPs can achieve standardization, profitability, and best-in-class data security with just one vendor and a multi-tenant management single pane of glass. See what your MSP could do with Axcient…

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Carissa Kohn Johnson Axcient

About the Author: Carissa Johnson // Product Marketing Manager, Axcient

Carissa Kohn-Johnson has a background in behavioral and physical healthcare technology and information technology and currently works as the Product Marketing Manager for Axcient. She has a lot of MSP Channel experience from planning and attending hundreds of conferences and tradeshows, and found her passion in technology and working with MSPs in particular. She serves on the Information Services Advisory Board for her community and feels most at home with other technology-forward people. Connect with her on LinkedIn – perhaps you can contribute to the Axcient blog?

More Great Stuff From Our Blog:

Check out some other interesting pieces from our blog: Check out Part One of our Sales and Marketing Quick Guide for MSPs: Lunch and Learns, Part Two of our Sales and Marketing Quick Guide for MSPs: LinkedIn,  Learn more about how Axcient supports partners with No-cost Onboarding and Ongoing Training, 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.