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Transitioning Your MSP Up-Market

If there is one thing that I’ve learned over the last decade, it’s that there are a lot of ways to grow an MSP. In my case, a lot of the revenue growth came from bringing on larger contracts. This march up-market is a common path for many MSPs to scale, but it’s not the only path. In fact, I thought Dean Trempales of Helpt offered a really great counter-argument to this idea, which is worth pointing out from the beginning.

 “The operational maturity of a 50-100 user company is often as poor, if not worse, than a 5-user company, but their expectations are MUCH higher. So I’m left with a more challenging client, one I probably gave a volume discount to, and they’re noisy and difficult to support. Now, they’re my largest client in terms of MRR, making up about 12% of my total revenue, but they’re nearly impossible to keep happy and are consuming almost 100% of my account and service management resources.”

Dean has a point, and in fact, this is very reminiscent of the ‘larger’ clients we worked with. We found ourselves importing low-skilled end-users in bulk, which totally changed the way we had to operate our business. Looking back however, this wasn’t such a bad thing. It was an important part of us “growing up,” as we had to find a way to deliver in increasingly difficult circumstances with smiles on our faces. The details also started to really matter. SLAs had to be upheld, reports had to be polished and delivered, and if something went wrong, you bet we had to answer for it. While this doesn’t sound fun, I can assure you it wasn’t. But it was part of our maturation process and it opened up a world of opportunities that we were finally ready and qualified to take on. 

Sourcing Bigger Opportunities

Pick Your Shots 

The most difficult part of this transition up-market is finding that first opportunity. In fact, our MSP had existed for 8 years before bringing on our first 100+ endpoint client. As if getting a seat at the table isn’t hard enough, but then actually converting the opportunity can seem impossible. That’s because with big opportunities comes big competition and frankly the sales process can be strenuous. This is why it’s incredibly important to pick your shots from the beginning, and be mindful of both who you target, and what you choose to offer them.

As Jesse Miller of PowerPSA explains, “I believe there’s a Sun Tzu quote that says ‘Fight the enemy where they aren’t’ – meaning that you want to attack segments where you’re strong and your competition is weak. Competing on price, metrics, SLA (all the commodity things) will almost always put you in the losing column when competing for bigger clients against larger firms. Instead, perform a simple SWOT analysis to identify niche areas of high-touch, high business value.  This includes services like vCISO, Architecture, RPA, and AI.  Building compelling narratives around these will help you differentiate and have business level conversations with the right type of prospects to get your foot in the door.“ This is great advice and reminds me of a common saying in sports; “If you play their game, you will lose; If you play your game, you have a chance to win.”

Making The Effort

On the surface, sometimes the large opportunities can seem like a stroke of good luck. In our case, that first deal was a referral from a Managed Print partner that was trying to close the customer themselves. They realized that their IT environment was a hurdle for them and so they brought us in to help clear the way. This gave us a shot at selling our services to a prospect that we likely wouldn’t have been able to source ourselves. In this case, the trust that we developed through our partnership efforts over several years, finally paid dividends.

Creating your own luck can be more intentional than you think. As Dave Sagraves of MSP Growth OS puts it, “Happy accidents happen as a force multiplier of intentional effort over time. A good example of this from my experience was with a group called Financial Executives International (FEI). There used to be a day where you could sponsor a chapter. Vendors would come in and blow their load in the first two meetings, trying to get everybody’s info and prospect them hard. We just went and sat in those meetings for two years. We were a fly on the wall, had drinks with everybody, never talked about our business. We became part of the fabric. Guess what happened after two years? Happy accidents began to happen consistently as we got referrals.”

Integrating Yourself 

While effort (or showing up) is important, integrating yourself is paramount. To build the trust of larger customers, you need to look for ways to deliver value. This requires understanding who these people are and what they actually care about the most. As Sagraves went on to say, “If you want to get into a vertical, like let’s say legal, you don’t go into legal and just shoot your shot in the first month or two. You show that you are vested. You serve in a capacity and give back to the industry or whatever that group is. You’re investing with no return. And eventually the givers gain happens, and they start to turn to you as a trusted partner.”

What I have found is that you can’t do this by simply dipping your toe in when it’s comfortable or convenient. It’s not enough to only participate in the IT Industry and communities of your peers. You need to fully integrate yourself into the industries that you are selling into as well. This is how you will learn about these customers and what they actually need. Most of your competitors aren’t willing to go to this extent, which is exactly why you should. 

Winning Bigger Deals

Do Your Homework

Now let’s talk about what it takes to actually close these opportunities once you’ve earned your chance. As Jesse Miller suggests, “Converting the opportunities means you have better done your homework on GTM. Your presentations, discussions, and packages all need to be aligned and specific, as well as polished to present that boutique feel to these larger clients. This also includes making a focused and sustained effort to ensure you’re presenting yourself in a way that maps directly to their needs and requirements.” 

Up until this point, you put in all of the effort to penetrate their inner-circle and create your own luck to get in the room. Don’t squander the opportunity by just throwing together a pricing table with a signature block. Go the extra mile to tailor the solution to your prospect’s needs and present it in a way that demonstrates that level of care. 

Own Your Size

There are actually some advantages to being the smallest MSP at the negotiating table. For one, you are going to treat that customer in a way that most larger competitors will not. Sure they may have more manpower and can “account manage” more consistently, but these relationships can often be shallow. A mid-level Customer Success Agent that gets paid a comfortable salary no matter the outcome, is not going to out-hustle a small, but multi-faceted MSP. However, this is only a strength if you take ownership of it. You need to be honest about it upfront and demonstrate that tenacity every chance you get. 

I thought Dave Sagraves roleplayed this situation quite well as he states, “If you work with me [I’m a small MSP, you are going to be a big deal to us. When you call, just sheerly because of the percentage of revenue you are for my business, I want to own that. I don’t want to be shy about that. You’re going to be a big deal. If you go to another MSP that has 30 clients your size, you are just a number.”

Play The Long Game

If you haven’t noticed, Dave is a master at ‘playing the long game.’ This is no surprise given his two decade long career in the industry. As he explains it, “One thing we sell at the end of the day—we actually sell trust. Do they trust that the pain they’re in today is going to be solved by what we deliver? That’s it. My minimum for a sales engagement when I go from prospect to a client—the minimum time I want with them is 6 hours. Realistically, if I do it well, I’m probably 10 to 12 hours in. Guess what? A lot of other MSPs are coming in, meeting once, and throwing a proposal. Meanwhile, I’m building a long-term partnership, not a transactional one.”

While you could make the case that this is true of any sales engagement, I have found that it’s especially true of larger prospects. Trying to make technological change in these organizations is much like turning a cruise ship. It just takes time. In many cases, these companies value the patience required to make decisions at their pace, which is often far slower than we’d like from a sales perspective. If you are in a rush, you are likely going to hurry yourself right out of an opportunity. 

Look The Part

While the world is no-doubt becoming more casual, that doesn’t mean that you can stop trying to present yourself well. When getting to know a prospect, there are only so many context clues that they can grasp to establish a basis of trust. Your appearance is one of them. That doesn’t mean you have to wear a three piece suit to a discovery meeting, it just means that you shouldn’t give them any reason to doubt how capable you are as a human being. 

I thought Brian Gillette of Feel Good MSP communicated this perfectly and in a way that only he can. As he puts it,“While it may seem obvious, appearance matters—especially when the stakes are high. I can’t believe I have to say this, but make sure to brush your teeth, carry mints, and take time to look presentable. Don’t wear dirty New Balance sneakers and ‘mom jeans’ to a meeting or event.  IT guys often forget that how you present yourself can significantly impact the client’s perception of your professionalism and attention to detail.”

Conclusion

Remember that winning big clients isn’t about mimicking larger MSPs; it’s about doubling down on what makes you unique. Your size can be an asset that enables you to deliver the kind of personalized, invested service that larger competitors simply can’t. It’s this commitment that will set you apart. Big clients want more than just “services.” They want partners who are willing to enter their crazy (often dysfunctional) world and live in it side-by-side. Once you are ready to make these sacrifices, the opportunities will not be far behind.