The MSP’s Line of Safety for Enhancing Customer Value
Innovation commoditizes quickly. The old days of monetizing first-mover advantage by having years of market domination before competition arose are over.
In previous blogs (The Line of Safety – Why Is It Important for MSPs? | McMann & Ransford and Why do Managed Service Providers Struggle to Get Above the Line of Safety? | McMann & Ransford), we have discussed that operating above the Line of Safety, the point in an organization above which roles are empowered with budget and resources to independently solve a problem, is a key to overcoming commoditization. Getting and staying above the Line of Safety requires a few pages from the Customer Intimacy playbook.
What is the Customer Intimacy business model?
Customer intimacy is a business model: organizing business efforts to identify ideas to address true customer problems/opportunities at the highest level, bring those to the customers, and working with them to take advantage of those ideas.
It is a completely integrated model – not a sales program. At best, customers see you as an extension of themselves.
If you are going to be preoccupied with identifying/creating ideas that fundamentally help your customers, then more of your “R&D spend” must be about those ideas. For example, let’s say you provide a bundle of technology equipment and software for hospitals. Some of your R&D spend should therefore be on the broader Hospital problems – how to lower error rates in the hospital, how to improve patient throughput, etc. You must bring better ideas to your customers compared to your competitors.
How Does Customer Intimacy Relate to the Line of Safety?
To create the level of Customer Intimacy needed, you must work with – not just email – customer stakeholders above the Line of Safety because they have a better understanding of their organization’s needs (due to being higher in the organization) and have budget and resources to assign to solve problems. Therefore, by creating Customer Intimacy with those above the Line of Safety, we gain access to a high-level view of their needs (and likely the marketplace’s needs), which provides insight into whether they are willing to spend money to solve the problem.
Shifting your Business Model to Create Customer Intimacy Above the Line of Safety
It is important to remember that executive-level stakeholders are very busy, and there is significant competition to get their limited attention. Creating Customer Intimacy is not just selling to executives or operating above the Line of Safety. Commitment to this means fundamentally changing the way your MSP business operates: it must go from being a vendor that responds to requests to a trusted partner that identifies issues and develops solutions before and/or as they occur.
MSPs often look for innovation of their product partners and suppliers to drive growth. In reality, innovative technology today has months, not years, of market dominance before competition arises, and all other MSPs have access to the same innovations at about the same time. For your MSP business to grow and succeed, you must be able to continuously identify customers’ challenges and their solutions and therefore need to find ways to create Customer Intimacy with stakeholders above the Line of Safety to understand where the marketplace is headed and how you can capitalize on it.
For additional McMann & Ransford insights specific to the MSP market, please visit Managed Services Providers | McMann & Ransford – Management Consulting.