4 growth strategies to expand your MSP business

4 growth strategies to expand your MSP business

4 growth strategies to expand your MSP business.

Every business on the planet is looking for ways to grow, whether you have 2 people on the books, or 2,000. One of the major challenges for MSPs in particular right now is creating and executing a growth strategy. Easier said than done of course, but today we’ll explore a few strategies that will help point you in the right direction.

What is a growth strategy?

A growth strategy can be defined as a special business plan that is created to overcome current or future challenges in order to achieve goals of expansion. Some good examples of growth strategy goals could be: improving your business’ products or services. It could be to acquire new assets like people or resources.  Today, we’ll go over the four main growth strategies that companies use in hopes of expansion.

Strategy #1 – Market Penetration

When we talk about market penetration, we are really talking about how well-known a product or service in a particular market. Normally, this is measured by the amount of sales compared to the total market share for that product/service.  

What are some examples of market penetration strategy? This could be the raising or lowering of your prices. Often, customers will look for a service that is the best in the market for the lowest price. It is really hard to compete like this, but if you can be competitive (not cheap) with your pricing then you may be able to acquire more customers. Another strategy is defining new target market segments. Let’s say – you’re a service provider, and you’ve only been servicing one type of businesses. You could consider offering your services to other professional businesses that are like-minded, and could use your service.

Strategy #2 – Service / Product Development

The main focus of this tactic is to be creative in how you offer your services. Take a look at your service offerings, could you sell something new? Like develop a new service bundle with your current services, or modify the existing services you offer in a way that would be beneficial for current pain points for businesses. This could be like how we upgraded and completely revamped our Corporate Encryption service. Of course, you could offer your same services but for a new market, as mentioned in the first strategy.

Strategy #3 – Market Expansion

A market expansion strategy focuses on selling current services in a completely new market from where your business currently operates in. For example, a company who operates solely via a partner-channel to sell their services, could start providing their services directly to customers in a direct-to-market strategy. The company is still offering the same services, but is offering them directly, instead via their channel of partners. This usually occurs when growth has peaked in a sales cycle, and the company develops an expansion strategy to overcome their current sales growth challenges.

Strategy #4 – Diversification Strategy

This particular plan is more complex and has at least 5 or 6 different types of diversification strategies. However, we will focus on the most common here, like horizontal diversification. This is when you introduce new services to your current offering in order to expand your market share. Normally a company will license new products, or even merge/acquire another company. Vertical diversification is another popular strategy which focuses on expanding its product line by creating a similar product for the same market. For example, a painting business that provides residential painting services, could start selling their own paint. Same target market (people who need their homes painted), but a new service and opportunity for the painting company to grow by not only painting the homes, but selling the paint itself to paint the homes.

Pro tip from us: Your current clients are your biggest assets. Take a look at what industries they are in, and explore if there are other sectors that could benefit from your services. Like if you currently service law firms, you could also service accountant and financial professionals, right? Secondly, take a look at the services that you are offering. Is there any way that you could expand your service offerings without shelling out too much money upfront? Be sure to compare vendors – their pricing, their fees, solutions offered etc.

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