Survey: MSPs Fall Short In Using Channel Partners

MSPs haven't effectively leveraged channel partnerships to boost sales, according to a poll by the Global MSP Network (GMN), an MSP consortium based here.

"By and large, channel sales have not been fully or effectively exploited," said Oli Thordarson, chairman of the GMN and president of Alvaka Networks, an MSP in Huntington Beach, Calif.

GMN Chairman Oli Thordarson said many MSPs, despite their histories, have not yet begun working effectively with solution providers and other channel partners.

Preliminary results of the GMN survey, due out next month, show that about 70 percent of respondents were MSPs that did business as VARs or ISPs before changing their business model. But less than 60 percent of the 35 respondents said they currently sell managed services through partners such as consultants and systems integrators. Those that do sell through solution providers receive less than 25 percent of their revenue from those partners, according to the study.

MSPs' limited marketing budgets have been one hindrance in developing channel partnerships, said Dan Atkinson, executive vice president at Orem, Utah-based MSP DirectPointe, which co-chaired the survey. Nearly 25 percent of respondents reported marketing budgets of less than $50,000, and only 10 percent said their marketing budgets exceed $1 million, he said.

"That seems a little bit lean for an emerging market," Atkinson said. Because of such results, GMN next year may need to sharpen its focus on helping member MSPs build channel marketing programs, he added.

A lack of education about the MSP value proposition, fear of losing jobs or staff members, and fear of losing management control are the top three obstacles to customer adoption of managed services, survey respondents said. As a result, DirectPointe now plans to emphasize those areas in its sales pitch, Atkinson said.

Targeted telemarketing is the best marketing strategy, while TV and radio ads are the least effective, according to survey respondents. "Targeting verticals is more successful than trying to create broad brand recognition," Thordarson said.

Sales techniques that use customer references, solution demonstrations and return-on-investment tools also are effective, survey respondents said. MSPs also reported success in converting customers after starting them with pilot programs.