MSPs facing sales and marketing challenges

Managed service providers are struggling with sales and marketing, getting staff and delivering training according to a state of the MSP world.

The European State of the MSP report from Datto has revealed the main challenges that are facing managed service players with sales, staffing, security and customer service the top concerns.

The firm is sharing the findings of the report, which surveyed 400 MSPs across Europe, with the channel to provide partners with insights into the current market landscape.

The main problem on the sales and marketing front was around lead generation, with many MSPs finding it difficult to get a strategy that delivers decent opportunities. That was followed by hiring sales staff, which was a major headache across sales, marketing and the engineering departments.

On the security front there was an awareness that areas like ransomware could be an opportunity but a lot of MSPs needed to brush up on their knowledge first to be able to get themselves into a position to provide that support to customers.

The Datto report found that half of MSPs are working with more than 100 customers with the majority providing one year contracts. The majority also continue to provide traditional break-fix alongside the managed services.

When it came to vertical specialisations the top two were manufacturing and finance followed by legal, construction, non-profits, education and healthcare.

Mark Banfield, SVP International at Datto, said that the report indicated that the European MSP market continued to grow and increase its business but the findings had exposed the main challenges they were facing.

"The European MSP channel is continuing its strong upward climb, as shown by our report’s findings. It’s clear that recurring revenue is the way forward with half of MSPs servicing more than 100 clients on annual contacts. As a result of this strong growth, MSPs are seeing significant revenue returns with 37% turning over $1 to $5 millon on an annual basis and 12 per cent reporting revenues of $5 million or more every year.," he said.
 
"Despite market growth, MSPs are still facing an enormous challenge with marketing and sales efforts, with 47% citing this as their biggest struggle – above staffing/training (37%) and ransomware/cyber security (33%). MSPs looking to continue to improve their business growth will need to dedicate time to recruit the right staff to run their sales and marketing efforts, so that they can concentrate on their customers," he added.

His advice was for MSPs to stand out in what can be a crowded market: "While offering a generic service may seem like the sensible way to attract a wider pool of potential customers, focusing business efforts for a specific vertical, or verticals, is far more likely to make MSPs stand out".

The Datto research can be added to other reports that indicate the challenges that MSPs are having keeping up with a changing market.

Ingram Micro recently stated that most of the MSPs it works with are in the build stage of the journey to becoming a managed services player, with just one to three cloud offerings and manual provisioning. Only 1% of the distributor's partners are at the Scale Stage of their cloud journey, where they are providing 10+ cloud offerings, including IaaS; with a self-service platform and automated provisioning.

ConnectWise also added its voice to the debate last month with the firm warning that those that fail to adapt to the emerging opportunities will miss out to those that are more nimble.

The firm found that the pace of change in the market meant that MSPs were finding it difficult to keep on top of customer demands.