MSP Marketing: Differentiation

BY IT GLUE | May 08, 2020

There’s an adage that says it’s not the best product that wins, it’s the best-marketed product that wins. The classic case study for that is the VHS – Betamax battle from the 1980s. But look around you today – there’s evidence everywhere. We all know a really great local restaurant that’s struggled, while the D-grade burger chain down the road is doing gangbusters. What does this have to do with your MSP? Simple – the techie in you wants to focus on your stack, your service desk, and your offerings. When you think about marketing, it’s probably the hard skills you think about – marketing tools/software, and the fundamental theory stuff they teach in business school. But the best marketers have learned to excel at the soft skills. So let’s get into that.

One of the most important soft skills in marketing is positioning, or differentiation. This is what makes you unique from your competitors. Sustainably unique. That word “sustainable” is the key to differentiation. It’s why differentiation isn’t the same thing as “what we do well”.

What We Do Well

Let’s start with this. List five things your MSP does really well. Do you crush tickets? Are your reps friendly? Are you fully up-to-date on the latest hardware and software? Do you have a niche, or a vertical you know like the back of your hand?

A lot of folks stop there. The problem is that “great service” can be done by anybody. The few companies that use service to differentiate are well-known stories for a reason – it’s harder than it sounds. So you’re friendly, local and give great service. All of your competitors can do that, too. The key here is to tell a story that inspires your target market. This story is where your story intersects with their story. If you can explain how you go to this place, and understand how they got to this place, then you have the foundations of connection, upon which you’ll be able to do business.

Verticals and Niches

Verticals and niches can be a great way to differentiate, at least in the short run. In the short run, if you’re far better than anybody else at security, that’s a niche you can exploit. But where does that expertise come from? Because if you just got into it last year, everybody else can catch up to you. First mover advantage is an advantage, but it might not be sustainable if you don’t keep ahead of the game.

Verticals work the same way – if you’re the only one doing health care in your county, that’s differentiation, but you have to continue to improve, because otherwise somebody else can enter that space and catch up to you. Sustainable competitive advantage in a vertical usually means having a multi-year head start, combined with a track record of excellence.

Defining Your Differentiation

The tricky part of differentiation, then, is carving out a space that you can own, and making it very difficult for anybody else to get in there. If you have years of expertise that make you that much better than anybody else, that can work. If you have the best processes so that nobody will ever really be cheaper (and profitable), or deliver better service, that could work. But when looking at your services, you have to be brutally honest with yourself as to whether you genuinely have superior service. If you don’t know the processes that contribute to that, and understand how you’ll sustain the superiority of those processes, then you probably can’t sustain that advantage.

No Resting on Laurels

Competition keeps you sharp. It may not feel good, but embrace the game and you’ll be better for it. If you have a head start on rivals by a year, then you have to work just as hard as them to maintain that lead. It’s important to think in these terms. The reason Coke has stayed ahead of Pepsi for almost 100 years is that Coke has never taken their market leadership for granted. If they didn’t have Pepsi, they’d have taken their feet off the gas a long time ago. Learn to embrace your competition and learn from them.

The Key to Sustainable Differentiation

Your competition can become excellent, and if they really wanted could probably get better than you at just about anything. But you could do that to them as well. Differentiate on things they can’t just copy. Put a lot more time and effort into your brand than you’re doing right now. Your brand is something they can’t copy – I mean, legally, they can’t copy it.

Culture is difficult to copy. If you want to do the “superior service” thing, then your superior service needs to be the result of replicable processes, continuous improvement, and a culture that is obsessed with service excellence. You’ll need to hire for it, train for it, design everything about your company for it. Read up on how Zappos does its culture to sustain service superiority. You – the owner, the C-suiters – you need to live and breathe the culture you want your clients to see. If you’re not doing that, nobody else in your MSP will either.

Position, and Reposition

Position, if possible, away from your competitors. Find something the market cares about, and be better at that thing than anybody else in your area. Communicate this very, very well. Make sure to associate that point of differentiation with your brand as much as humanly possible, so that the connection is instantly made. Then back that up with hard skills – the SEO and ad buying – that supports your positioning.

And then re-position when necessary. This doesn’t mean pivoting away from what you do best. It just means understanding the current state of the competitive environment at all times. Competitive positioning is not a “set it and forget it” kind of thing, but rather is something you should re-visit regularly. Make sure you’re still differentiated the way you intend. Be prepared to change some messaging. Also be prepared to change your processes – if somebody else has started taking your customer service lunch money, find out why they’re beating you and change your processes to recapture that positioning.

There’s nothing easy about the marketing soft skills. They take experience to master, and that’s very different from learning hard skills. But once you get there, you’ll realize that’s the key to finding and sustaining differentiation, and ultimately learning how to identify your best and most sustainable sources of competitive advantage.

We’re good at marketing here at IT Glue. We’re also good at documentation. In fact, we are the best in the business. If you’re serious about getting your documentation sorted out, and then using that documentation to improve your margins and get into growth mode, then we should talk. Take a quick look at what we offer, and we’ll take it from there.

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