There is little debate that managed service providers (MSPs) have become essential partners for leading technology vendors, particularly those working in a recurring revenue model. They offer a unique combination of expertise, reach, and agility that can help channel vendors reach new markets, grow sales, and accelerate innovation.

But how can you best leverage your MSP channel to achieve these goals? As technology companies, a key aspect of your success hinges on a mutual understanding: how you understand your MSPs and how they interpret the partner enablement they receive from you. After all, your partner’s perception becomes your company’s revenue reality. Remember, the average MSP partner is working with dozens of vendors and standing out is how you drive loyalty and engagement.

Understanding the MSP Model

The MSP business model represents a strategic method in the IT services industry, where MSPs take on the responsibility of managing their clients’ IT systems and services. This model has evolved as a response to the increasing complexity of IT environments and the need for specialized expertise in managing these systems. 

  • MSPs sustain their businesses through a recurring revenue model, charging clients a regular, fixed fee that’s typically based on the number of users, service complexity, and required support level. 
  • Forming strategic partnerships and alliances with technology vendors empowers MSPs to broaden their solution range and remain at the forefront of technological advancements. 
  • MSPs also distinguish themselves by offering value-added services such as consulting, cybersecurity, and cloud management, effectively serving as a comprehensive IT hub for their clients.
  • Scalability is a core aspect of MSP operations, requiring flexible infrastructure that can adapt to changing client demands. MSPs must effectively manage human and technical resources to scale their operations and onboard new clients while maintaining service quality.
  • Compliance and security are non-negotiable, with MSPs adhering to regulations such as HIPAA, PCI DSS, and GDPR. Regular audits and compliance checks, robust cybersecurity measures, and continuous monitoring are all critical to protect against threats and maintain client data integrity and confidentiality.
  • Finally, customer relationship management is fundamental to MSP success. Understanding and anticipating client needs, maintaining regular communication, and providing high-quality service are all pivotal. This approach, coupled with actively seeking client feedback for continuous improvement, ensures trust, transparency, and customer satisfaction, thereby enhancing the overall quality of service.

So how can vendors structure a program that aligns with the needs and business models of MSPs?

Start With the Basics

  • You don’t really know what your MSPs want or need unless you get their feedback and use it as a foundation to build your program. Get involved in the MSP community. Be where they are and listen before talking. Sounds simple, but with so many vendors to choose from, MSPs are looking for companies that understand their challenges and are accessible to them. Want to know what pain points MSPs have with you and your competitors? Visit Reddit and search by vendor company name.
  • If you don’t have one, create a dedicated MSP program that includes incentive programs, sales and marketing training, product trainings, and channel account managers. Not all partner programs are the same, and what works for your agents, referral partners, and resellers does not always work for your MSPs. Be differentiated in your approach.
  • Help your MSPs build marketing plans. Many MSPs are small businesses, and they don’t have marketing chops or internal resources dedicated to marketing and may not be adept at building strong marketing plans. Invest the time and consider a guide or template that helps your MSPs develop marketing plans that benefit both their business and yours.
  • Peter Drucker is known for saying “what gets measured, gets managed.” This applies to you and your MSP. Set KPIs to include metrics like net new accounts, time to close accounts, number of attendees at events, or leads collected. Define objectives and goals both internally and externally to measure your success. Review and adjust frequently and share the results with your MSPs.

Building Upon the Foundation

You understand the business model, you’ve created a strong foundation for a program, and now it’s time to get your MSPs up and selling. How to do that?

Empower your MSP Partners

The first step is to recognize that MSPs are more than just transactional resellers; they are your front line to the customer. They are the ones who are building relationships with the end user customer and understanding their needs.

Pete Busam, Founder of Equilibrium Consulting, shares: “What vendors should understand about leveraging their MSP channel is that success isn’t just about products; it’s about partnership. When vendors truly embrace this perspective, collaboration becomes the cornerstone of innovation.”

  • Empowering MSPs involves equipping them with tools, resources, and support to drive growth and improve service delivery, including essential training platforms for product knowledge and sales techniques, and sales enablement software for efficiency.
  • MSPs also need resources like market research for insights into industry trends, co-marketing assets for brand-aligned messaging, and product databases for real-time information, which collectively ensure a rapid and tailored response to customer needs.
  • MSPs thrive with robust support structures like comprehensive technical support, channel managers providing personalized guidance, and community forums for peer interaction, all fostering swift issue resolution and strong vendor relationships.
  • The empowerment strategy should grant MSPs unrestricted access to product training, equipping them with vital marketing and troubleshooting knowledge, and provides ready-to-use marketing materials and a sales support infrastructure to effectively close deals.
  • Finally, a systematic approach involves implementing Partner Relationship Management (PRM) systems for better interaction management, lead generation mechanisms to attract and cultivate prospects, and deal management platforms to streamline the sales process. This multi-faceted approach ensures MSPs are not only well-supported but are also poised for success in a competitive marketplace.

Foster collaboration

You can have all of the above elements in place and still have an underperforming MSP channel. Why? Too many vendors don’t fully understand that a successful MSP partnership is built on collaboration. It’s about working together to develop solutions that meet the needs of customers and help you both achieve your business goals.

One way to foster collaboration is to create regular opportunities for communication and engagement. This could include holding quarterly partner summits, hosting monthly webinars, or simply setting aside time each month or quarter to chat with your MSP partners one-on-one in a structure business review.

Jim Tarentino, CRO of Coro Security, underscores the importance of smart investments in MSP partnerships: “Vendors in the Tech and Cyber space are realizing more and more that leveraging MSPs as an exponential way to increase their sales team is extremely advantageous. Smart vendors, like Coro, know that the best way to do this is by truly making MSPs an integral part of the go-to-market strategy.”

Tarentino says that lots of vendors sink considerable costs into MSP enablement strategies such as training, providing them with competitive products and discounts, and making sure they’re giving them the critical technical support and resources they need to sell and service solutions. And, when done right, those investments pay off in increased revenue and profits.

MSPs are invaluable allies in your journey toward market success. It’s not just about offering products; it’s about cultivating solid and collaborative partnerships. These partnerships are rooted in trust, support, and shared success.

Make Smart MDF Investments

Investing in your MSP channel is an investment in your company’s business growth. When your MSP partners succeed, you succeed.

Investing with a robust market development funds (MDF) program that is clearly defined and easy to participate in is not just an investment in the MSP partner relationship; it is an investment in your go-to-market strategy and the end customer satisfaction.

  • For an MDF program to thrive, it must be underpinned by transparency, empowering MSPs with clear guidelines and straightforward processes for participation and reimbursement. Additionally, MSPs require prompt, well-defined support to leverage these funds effectively, ensuring quick approvals and rapid reimbursements that sustain marketing momentum and reinforce their strategic endeavors.
  • To effectively frame an MDF program, a detailed guidebook is essential, paired with regular planning sessions with MSPs to align investments with evolving market needs and marketing strategies.
  • Streamlining the MDF application process is key to minimizing MSPs’ workload, complemented by performance tracking tools that inform allocation decisions and feedback mechanisms that refine the program over time.
  • Enhancing the impact of MDF programs includes offering marketing support and resources, along with regular training sessions on the latest market trends and sales strategies to empower MSPs for maximum efficacy.

Focus on the Customer

At the end of the day, the success of your MSP channel depends on your ability to deliver value to end customers. This means working closely with your MSP partners to understand the needs of their customers and develop solutions that meet those needs.

One way to do this is to conduct regular customer surveys. This will help you understand the challenges that they are facing and the types of solutions they are looking for.

You can also work with your MSP partners to develop customer case studies. This is a great way to showcase the success of your partnership and demonstrate the value of your solutions to other SMBs.

The Bottom Line

MSP relationships are far from casual affairs. They require substantial investments in both financial resources and human capital throughout their lifecycle. By understanding key challenges and adopting professional management tools, vendors can chart a successful course forward. Keep both the partner and the end-user customer at the center of your strategy. Your partnership with MSPs can, and should, be a trusted partnership that is mutually beneficial in terms of revenue and profit growth for you both.