How MSPs Can Overcome The Issue Of Commoditisation
by Adam Basheer, on 17-Jul-2017 16:59:17
Commoditisation is one of the few challenges that you as a managed service provider (MSP) is faced with. Many B2B and B2C industries operating in a congested or saturated market can easily affected by commoditisation, including the MSP market. The term refers to products or services that share indistinguishable features which makes it difficult for brands to stand out from other competing brands in the market. Lacking uniqueness in your service offering can lead to poor sales leads and minimal ROI over time. So, if you are feeling the pressure to differentiate your product from the MSP market or want to prevent the risk of experiencing commoditisation, then keep reading.
Even though developing and implementing marketing strategies may not be your primary skill, the solution to this issue is tech friendly. Why? Because only you, as a highly skilled and trained MSP will know your product better than anyone else.
A unique value proposition is a popular marketing tool which involves creating a stream of statements that generally describes:
- The product or service your company is selling
- The end benefit the customer receives
- Your target audience
- How your product or service differentiates from your competitors
These factors will help you to deliver strong statements to clients, inviting them to engage with your product and buy your product. Since the MSP market in becoming increasingly commoditised, this is a perfect tool to assist in differentiating your IT service from competitors. The tool will also help you stay away from statements like, “number one”, “best in Australia” or “cheapest”. These types of statements are what generally drive MSPs to a commoditised environment as they are frequently used.
Investing more time in creating differentiation statements is paramount for overcoming commoditisation. You want to try and make your product unique through the feature and benefit to businesses who are yet to leverage a MSP. Put yourself in your client’s shoes to determine what they would perceive to be different. Alternatively, you can create your own SWOT analysis and list out your strengths, weaknesses, opportunities and threats of your MSP product and compare them with your competitors.
Once you have a better understanding about your core strengths are you can then start to develop your value proposition. Ensure that your statement/s are unique. Something that will appeal to the end user and something that your competitors don’t use as their selling point. Again, your client must perceive the value in your IT service. Find out what exactly your clients are looking for and match it with a feature or benefit as solution to their problem. For instance, how can your IT service improve their productivity, minimise costs and increase ROI. Focusing on using these types of statements will greatly appeal to your than statements like advanced backup, 24/7 monitoring, best security- tech words that may be unfamiliar or uninteresting to them.
This leads to the FAB technique, a technique that aids in developing your value proposition. The technique helps you to narrow in on the major features, benefits and advantages (FABs) of your IT service. The key phrases/ statements derived from your FABs form the foundation for building your value proposition. For further guidance on using the technique, you can download the free FAB technique guide.
Here is the simplest way to build your value proposition:
- Headline in one short sentence. What is the end-benefit you are offering? Can mention the product and/or the customer. Attention grabber.
- Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you do/offer, for whom and why is it useful?
- 3 bullet points. List the key benefits or features.
- Visual. Images communicate much faster than words. Show the product, the hero shot or an image reinforcing your main message.
MSP value proposition examples
Below are some examples of the same or similar value proposition for “IT Company X”- an MSP.
IT Company X helps your business progress by providing meaningful advice, the latest equipment and software solutions so that you can meet and conquer the challenges you face tomorrow.
IT Company X combines leading business systems with business smart specialists to deliver tailored technical solutions that deliver quantifiable business results. Making your business run smarter and more smoothly.
Progress beyond your current systems to create a smarter and smoother business
- Enhancing your business with proven equipment and software,
- Let IT Company X specialists deliver tailored solutions, and
- Get quantifiable results.
"We help medium sized companies create smarter systems enabling their businesses to run smoother and more profitably. With the rising reliance on computer systems in today's business environment, this is a critical issue for most businesses. One of our recent clients, a large distribution company, was struggling with how to decrease the cost of their sales delivery and increase the customers service they provide. We saved them over $150,000 in just six months. Plus, they didn’t cut any services and, in fact, were able to add more services without adding to the cost."
You can see how the FAB technique helps you to build your own value proposition. Effectively communicating and selling the major aspects of your IT service is key to overcoming the issue of commoditisation. If you would like to learn more about the sales technique, download the free guide or for further assistance contact Fit 4 Market.