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ConnectWise To MSPs: Grow Margins By Automating For Efficiencies

‘You understand where your sweet spot is, where you can create value for customers,’ says ConnectWise Product Marketing Manager Topher Barrow

Managed services providers can increase their margins without raising prices by gaining efficiencies through automation, Topher Barrow, product marketing manager at ConnectWise, told attendees of the NexGen Cloud conference on Monday.

The cloud has made it possible to achieve such higher levels of automation that make it possible for services providers to decrease operational costs and make their businesses more profitable, Barrow said at the event in Anaheim, Calif. hosted by The Channel Company.

ConnectWise is focused on facilitating those efforts through its portfolio of software solutions geared to power the businesses of MSPs, he said.

[Related: MSPs Must Prepare For These Three Most-Disruptive Technologies]

The process starts with creating a cloud package that takes advantage of economies of scale.

The first element is implementing a pre-defined service catalog to align with the MSPs unique strengths.

"You understand where your sweet spot is, where you can create value for customers," Barrow said, "specific industries and markets that are your bread and butter."

Those services packages should also be pre-scoped to avoid bottlenecks in deployment, he said.

Lastly, MSPs should embrace a model that delivers a fixed price to all their customers, allowing implementation of even more automation within the organization to squeeze out even better margins.

The combination of those three elements that drive profitability is best achieved through coordinated efforts across sales, marketing and procurement divisions, he said.

If MSPs can seize that winning formula, they can increase repeatable processes around quotes, invoices, billing and renewals, and acquire customers at a lower cost, Barrow said.

Kevin Walsh, owner of Host for You, a San Diego, Calif.-based MSP who currently works with a competitive product, said the ConnectWise presentation hit on a common theme.

"The big talk with all these guys is building your margins," Walsh said. "They think if I can get a bigger margin, I'm going to choose your product."

Barrow made a particularly interesting point about easing the customized pricing process through standardization.

"If they have a solution to automate that a little easier, it makes sense," Walsh told CRN.

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