It doesn’t matter how many people need your services; if they don’t know you exist, you can say goodbye to your business. Marketing is an essential part of all business and has been throughout much of human existence, so if you think it is not worth investing in, you are simply wrong.
Remember back when you were a kid, and you decided to mow lawns for a couple of extra dollars to supplement your pocket money? Even back then, you engaged in marketing because if you didn’t tell anyone about your desire to mow lawns, and how much you were charging, you never would have had any business.
Marketing in the 21st century is really not that different – except now, it’s not enough to just write a sign and stick it in your front yard. These days, in order to reach the masses and ensure your business flourishes with the customer base you want, you have to go online and engage in the world of digital marketing.
Technology is the way of the future, and everyone is now online, so business for those in the Managed Service Providers (MSP) industry is thriving. According to a recent report, growth in the industry is set to hit an all-time high in Australia, with a predicted A$1.75 billion (US$1.3 billion) being spent on MSPs by the year 2025.
Despite the clear financial opportunities this shift has brought, though, the move online has made marketing more complicated because your prospect pool is no longer just your neighbourhood or immediate area. It’s your city, your state, your country, and/or other peoples’ countries. So, competition is high, and it has never been higher for those in managed services.
Without a doubt, the MSP industry is lucrative, and as such, more and more MSPs are popping up, so the only way you are going to have a chance of standing out is with the right marketing strategy.
Just like with everything else, though, you only get out of it what you put into it, so if you think you can get by without budgeting a certain amount to spend on your marketing, you’ve got another thing coming.
What should your marketing spend be?
Sales and marketing is a more complex area than you probably realise, but your MSP marketing spend should be determined by your goals (aka your ideal client base and how you see your business growing) and market competitiveness, whilst also keeping your gross revenue in mind. So, a good place to start is around 2-5% of your gross revenue.
You may think that this seems like a lot to set aside for something you’re not even sure will be beneficial, especially if you are a small business, but if you are just using what is left over after you’ve doled out money for everything else, your marketing efforts and, therefore, your lead generation will not be as successful as you had hoped. And, 2-5% is really not so much when you look at how much business could come from successful marketing.
There is the idea that the more money you throw at something, the better you’ll do, meaning the more you invest in marketing, the higher your return on investment (ROI) and lead generation, but this is not always the case. It’s about how you use your invested funds, not how much you invest.
The COC Factor
Cost of Customer Acquisition (COC or COA) is without a doubt the most important thing that should be considered and measured when it comes to your marketing investment. COC is the total cost to get a new customer on board with your company. It’s a well-known fact that in order to make money, you first have to spend it, and this becomes clear in the COC process.
First, you pay money through advertising, staff, or other resources to get the customer, and then, you continue to pay money to deliver them a service. The costs you initially outlayed to get that new customer and provide them your services are not often recovered until months later. It is only when those initial costs are recovered that a client can be marked as profitable.
Having a successful business can be a slow burn, so it’s important to know that success does not happen overnight, but by investing in the right digital marketing, you can successfully work towards bringing in a customer base that pumps a monthly recurring revenue (MRR) – hopefully for the long term – into your business.
So, in order to hit your profit goals faster, you need to move from a high COC plan to a low COC plan. This often means cutting the costs that you incur to acquire a new customer. But how, you say? Let’s take a look…
Factors that increase your COC
Targeting the wrong prospects
Imagine you’ve printed 1000 flyers that advertise your MSP. They weren’t cheap, but they increase your brand image and look great! You now go to a busy beach on a Monday and hand those bad boys out to every single person you encounter. Do you really think the people at the beach on a Monday are your ideal customer?
You may find one in there somewhere (that’s a big ‘may’, though), but it’s more probable that these people are not your target audience, so you’ve just wasted both time and money on a poorly organised and executed marketing tactic, which has directly increased your COC.
Lacking quality leads
Marketing should not just be about getting leads but about getting good quality leads. If you’ve invested in lead generation, but you’re only getting leads that stick around for the short term if at all, your COC will undoubtedly never balance out to a point where you become profitable.
It’s not just the poor quality leads that are the problem, either. Too few leads or a single lead that costs too much are also not going to help you reduce your COC.
Poor visibility into your marketing ventures
If you aren’t measuring your successes and failures when it comes to your marketing, you might as well just open the window and throw your money out of it now. Whether it be email marketing, inbound marketing, outbound marketing, social media marketing, or content marketing, you need to know what’s going on with it, so you can see what’s working and what’s not before you continue to waste money and effort unnecessarily.
Key areas for successful marketing
In order to make your marketing investment pay off, you need to have a clearly defined and well thought-out marketing plan. This includes knowing what marketing channels are the best/most appropriate for your industry, and how certain marketing campaigns could boost your business over the long term. This often comes down to knowing your ideal client base and how they fit into the sales funnel.
There is also the matter of your website: is it appealing and easy to navigate for your ideal client base? Does it clearly define who you are as a business and what you can offer your ideal clients? Is the content SEO optimised, so your business becomes more visible online? Do your service/landing pages and blog posts build authority? Is your content in line with current market drivers and changes?
A lot of businesses may believe that it is simply enough to build a website and throw a few paragraphs on it with some pretty pictures, but that is oversimplifying what marketing does for a business.
True marketing is about knowing the psychology of people, the ebbs and flows of the industry as well as the changing market demands, and the pain points of your ideal client base. To know all of this AND then be able to market your services successfully usually means an investment in outsourcing your marketing needs, which also needs to be factored into your marketing budget.
The case for specialist MSP digital marketers
So, you’ve realised that marketing is actually an area that your business could benefit from immensely, but you’re no marketing whiz. You don’t know your SEO from your CPC, or your ad spend ROI rate from your CPL, so you start looking at digital marketing agencies.
There are a LOT of digital marketing agencies out there, but not every agency is going to benefit your business or know how to market your services in the right way. So, although you’ve found a reasonably priced option, you have to take into account their experience and success with businesses from your industry. In this case, it may be necessary for you to also consider signing up with a specialised MSP digital marketing agency.
A specialised MSP digital marketing agency consists of people who know your industry like the back of their hand. They deal exclusively with MSPs and, as such, have the marketing knowledge and experience paired with the stellar writing skills needed to help you get your business where you want it to go successfully. They can effectively evaluate the performance of your website and the value of your previous marketing strategies, if any, up to that point. They also have more insight into the marketing campaigns and channels which work for your industry, so you should be able to recover your acquisition costs within a 3-6 month period.
At the end of the day….
Your primary takeaway from this is that your MSP needs digital marketing to be successful, so it’s important to factor it into your budget. With the right digital marketing agency, you have the potential to make your MSP into everything you thought it could be and get the leads needed to ensure the successful and profitable continuation of your business.
If you’d like to know more about how a specialist MSP digital marketer can add value to your business, get in contact with the LeftLeads team!
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