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MSP Marketing Strategy: 11 Step Marketing Plan 2024

Growth isn’t always easy, no matter what kind of business you’re running. Managed Service Providers have the added complication of sustaining growth over time.

That’s because MSPs rely on future revenue, compared with traditional businesses, where most of the income is collected upfront.

Like most MSP owners, you get into services because the residual income allows you to build a sustainable business that earns cash flow, which is easy to predict. Also, like most MSP owners, you want more time out of the office doing the things you love.

Your end-game is to sell for a profit or hire an ops manager to do all the work for you. It’s something I hear from MSP owners often: less stress and more fun.

In this article, I will discuss crucial factors for growing your MSP. I will start with some interesting stats you need to measure, but you can skip right over those if you want to learn tricks for growing your MSP. To be clear, none of the links or businesses in this article are paid or sponsored.


Top MSP Marketing Challenges

Several distinct challenges stand out, significantly impacting the growth and sustainability of MSP businesses, and it’s important to recognize them before we begin. 

1. Marketing isn’t working.

MSP owners need to improve their marketing strategies. Unlike conventional product marketing, MSP marketing demands a unique approach. Managed services are inherently complex, and selling them involves not just a transaction but also establishing trust and handing over critical business functions. 

This complexity necessitates a nuanced, trust-building marketing approach, differentiating it starkly from selling simpler, more tangible products like shoes.

2. Quality referrals are running out

Another major hurdle is the depletion of referral sources. Traditionally, MSPs have thrived on referrals, benefiting from high conversion rates due to the inherent trust in these leads. However, as MSPs evolve, the reliance on referrals becomes a double-edged sword, especially when transitioning into broader marketing and sales efforts where cold leads are less likely to convert. 

The nature of referrals that fueled growth a decade ago might not be aligned with the current needs of the MSP, necessitating a shift in the target audience for referrals to propel the company to new heights.

3. Poor quality leads.

Lastly, the challenge of attracting high-quality leads is prevalent. Many marketing strategies must catch up, particularly those employed by external agencies unfamiliar with the MSP landscape. For example, targeting generic keywords like “IT Support” often attracts irrelevant leads, such as at-home users or university students, rather than the desired business clients. 

This misalignment underscores the need for more tailored and sophisticated marketing tactics that resonate with the specific needs and characteristics of the MSP market

Top five KPI’s you need to know

Getting your numbers right is critical in the MSP world: A healthy MSP should:

  • Have a lifetime value more than 3X customer acquisition costs;
  • Recover customer acquisition costs within 12 months;
  • Focus on offsetting churn using expansion revenue.

Below is more details about the numbers, click on each section to find out more.

One of the essential rates MSP’s need to know, with two types you need to be aware of:

  • Customer Churn – number of accounts leaving your business each month as a percentage of your total customer count.
  • Revenue Churn – the amount of revenue lost each month by customers leaving as a percentage of your total revenue.

In the early days, tracking churn isn’t useful because if you only have 15 customers and one customer leaves, you will see a significant impact.

Churn compounds over time, for example, a 3% monthly churn rate turns into 31% churn annualised. Meaning you need to replace almost 1/3 of your customers to keep the same revenue when you put inflation into the figure, you need even more!

MRR measures the revenue of all your customers’ generate in a single month. Multiplied by 12 gives you the annual recurring revenue or Run Rate.

ARR = 12 x MRR

Recurring revenue is what makes the MSP model so appealing, and as long as you continue providing value, your customers will keep on paying.

The total revenue generated by a customer over their lifetime. The longer customers stick around, the higher their lifetime value.
Calculating your LTV

LTV = ARPA / Churn

  • Average Revenue Per Account (ARPA) – the monthly revenue each customer spends across all your accounts;
  • Churn – the average number of months your customers use your services, or you can divide ARPA by the revenue churn rate.

The amount you spend on acquiring a customer which includes sales, marketing and advertising.

Calculating your CAC:

Find the total amount spent on sales and marketing for a given month (include salaries and other related expenses) divided by the number of customers acquired during the same time.

CAC is closely related to the lifetime value from each customer. For an MSP to be viable, you need to make more profit from customers than it costs to acquire them.

I recommend a value of at least three times the amount spent to acquire a customer.

LTV > (3 x CAC)

Recovering your CAC frees up cash you can reinvest into sales and marketing, MSP’s should recover this within twelve months to remain healthy.

As a marketing specialist; I believe this is one of the most important metrics. With the NPS you can quickly survey your customer base and find unhappy customers and about to churn even before they do.

NPS allows you to discover why customers are dissatisfied quickly, you can also use this feedback to improve your service or account management processes.

I once used NPS to recover over $250,000 worth of yearly recurring revenue. It turns out the previous account manager left two accounts unattended, and they fell off the wheel. Luckily we sent out the NPS survey in time.

Measuring NPS

It’s easy, use a tool like Survey Monkey with the prebuilt survey built-in. NPS should be quick and easy. It’s best if you only ask for the rating, and once the user has given a score, give them an option to supply a reason. Don’t ask for any more details (besides their account information) because it will skew your results.

I use Hubspot, because you can easily track who people are and the clicks so they don’t need to submit any forms.

When is the best time to send an NPS survey? Right after you deliver a project, or your customer has been onboarded.

Track & manage success with EOS.

One essential initiative you can take is to change your operational structure so your business can operate without you. With EOS, you can take your life back and significantly increase your MSP’s valuation.

Our most profitable clients have all been on the EOS journey. You will find a new sense of focus and vision within your company. EOS helps develop your culture around high-performance values. You can hire, fire, and reward those to fit your ideal employee.

EOS gives you simple tools to drive your company forward. It doesn’t matter if you have hit the ceiling at $2M, $5M, $10M, or $20M. The best way to move your company forward is to have your entire team move in the same direction.


Before you consider marketing, you need a sales strategy. 

It would help to talk to a well-rounded sales manager to determine your sales strategy. But below are some typical questions you need to know for the MSP business model:

  • What is your current recurring revenue?
  • How much recurring revenue do you want by the end of the year?
  • How many new accounts do you need to achieve these targets on top of your churn rate?
  • How many new leads do you need per month to achieve your targets?

Have you been in business for a while? Or are you just starting?

Newer businesses generally aim for the low-hanging fruit by selling to technical people. In contrast, mature MSPs can talk towards more business problems and provide thought leadership to the C-Suite, solving more significant issues.

Technical buyers

The technical buyer can be much easier to communicate with and has shorter sales cycles because they get what you are selling. The downside is that there is competition at the entry level, and it’s often a race to the bottom.

Decision-makers

When you start selling to decision-makers in the C-Suite, the sales cycle becomes much longer. Your messaging needs to be on point, as you’ll need to provide higher-level thought leadership, roadmaps, blueprints, workshops, etc.

The rewards can be worth selling higher up because they treat you as the thought leader. You helped set the strategy, so they buy more from you. Check out Infront; they have a very mature model.


Productize your offering.

 

Productizing your offerings into easy-to-sell and repeatable solutions will make life easier. Many MSPs fear locking down their offerings because they fear missing out on sales. However, if you specialize in Security, EMS, Desktop Support, or even products like Microsoft or Citrix, you will succeed—depending on your location.

Join your vendor’s marketing and sales programs. A few good ones are Microsoft’s CED and GTM programmes and Citrix’s MarketingIQ and SalesIQ, which are gold. Even if you aren’t selling Citrix’s solutions, they have built some of the best ready-to-use thought leadership I have seen.

Each vendor should have their portal, and depending on their level of maturity, you can find ready-built solutions that are easy to sell.


Get to know your customers; build a value proposition they care about

What makes you different from the other MSP’s? You aim to create a compelling story wrapped around a well-planned Customer Value Proposition (CVP) or Unique Selling Point (USP).

To craft a well-rounded CVP, you need to get to know your customer well; we provide CVP services, and if you want to figure it out yourself, check out our blog for more. Below are a few starting points to get to know your customers:

  • Who is your ideal customer?
  • What industry are they in?
  • How many seats do they have?
  • Are you selling to technical buyers or decision-makers?
  • Are there any typical saboteurs in the organizations you sell to?
  • What is your customer trying to get done? [link]
  • What are their pains from getting their job done? [link]
  • What are their gains for getting their job done? [link]
  • How do your services solve their pains?
  • How do your services create their gains?

We have some articles on this which will help.


Create an automated lead generation machine.

You may not realize it, but you may already have one. Your website is one of your greatest lead-generation assets.

I once worked with a customer who would often send potential customers to their website and never hear from them again. All it took was a fancy new website with little change to the key messages to start bringing in leads.

Where to start with your new website? Many companies can build websites for you; I recommend you work with a company that gets your services and solutions. Freelancers are okay but only sometimes get the IT Service space.

Did you know your customers spend 57% of their buyer’s journey researching and judging you online?

If your website doesn’t do your business justice, you need to focus on it.


Generate traffic to your website.

Once you have built a fantastic website, you must get people to it. Then you can convert them into leads.

The next part is tricky. Some people in the industry consider paid search (Google Ads) the best option. In contrast, many others prefer to get free traffic from Google via search engine optimization (SEO) or social media.

Paid Search

It’s great if you’re just starting out, but it can get expensive if not managed correctly. It would help if you had your paid campaigns set up for conversion. Otherwise, you may take sales calls for Xbox. Please read my blog on getting the most from Google Ads. 

Remarketing

A vital part of online conversion is the type of advertising that follows you around the internet with those pesky ads. It’s easier to convert people who have exposure to your brand.

Free Search Traffic

I have always been a big fan of SEO. It takes at least six months to work well. SEO is a long-term plan, and I firmly believe that any company needs to invest in proper SEO to bring in free traffic.

Social Media

Excellent when used in the right way. Social media is a vanity measure; you should focus on using it as a tool to build culture and generate leads. An easy step is connecting on LinkedIn with your Partners and Customers there.


Hire a sales gun.

Everyone thinks a sales manager is going to bring in all the new business; while this isn’t always true, there are a few things you need to realize:

  • The business should generate leads first – your sales manager is the one who takes the customer over the line.
  • They need to look like your customers. If you are after the top end of town, they should dress and act like it and look trustworthy. You are selling relationships.
  • CEOs make your company look small – If the business owner is the main salesperson, they make the business look small, which is a turn-off for most customers.

Good, better, best pricing strategy

This old pricing theory is still relevant today; “Good-better-best” still works as good today as it used to. Providing options simplifies your offering, reduces confusion and implies we respect customers enough to give them choices.

When working out your G-B-B strategy, keep in mind:

  • Keep your offer simple;
  • Provide a clear comparison and a path to upgrade;
  • Be strategic about numbers you use – avoid numbers that end in a 9, 5 or 0;
  • Test, test, test!

Connect with your partners and customers.

Are you connecting with as many partners as you are with customers? Your partners are one of the most significant referral streams that you may not have tapped into.

One of our most successful clients has a fantastic relationship with Microsoft; they attend their events and network with their channel managers. It works so well for them; they are spoon-fed leads.

Connect on social media.

One of the best things you can do is to get onto LinkedIn and connect with your partners there. Don’t harass them, start softly to get to know them, engage with their content and even share content they may like.

Get in touch with your customers, try to find ways to get them on social media, or even create a monthly newsletter that is not just about your product and sales. Check out the 411 strategy; it’s a perfect guide to sending content people like.

Connect at events

In-person events are a great way to meet partners and other MSP leaders who are in your situation. Below are a few of my favourite events—don’t forget to bring your business cards.


Increase conversions online & offline.

Website

Make sure your website is looking tight. Create some offers that people want. Don’t forget that your visitors are judging your website as a sign of your success;

Landing pages

If your website isn’t excellent, use a landing page generator like Unbounce;

Proposals

Take your customer on a journey by explaining your Why, How and What. Tell your customers what they are getting and explain what it will be like to work with you. The Proposal is one of your most critical tools, so make it look amazing!

Do your proposals look rough? Don’t worry; you can get easy-to-use templates with a service like Proposify;

Value Proposition

Build a fantastic value proposition; this starts with your customer. We are all about value proposition design, so check out our blog for more on this;

Testimonials

People buy from people they trust; referrals help conversions considerably. After you deliver a successful project or on-board a new customer, ask them for their feedback. Use this feedback in your sales and marketing material. Adding it to your ‘About’ page on your website is the perfect spot.


Final comments on growing your MSP with your marketing strategy

There is a lot of content in this article. Let’s cut to the chase; below are my top recommendations for your MSP’s Marketing Strategy:

  • Empower your employees with EOS;
  • Understand who your customers are with a value proposition that differentiates your business;
  • Optimize your website for conversion and drive traffic to it;
  • Build an amazing product. Focus on the business problems, not the technology;
  • Hire a sales gun;
  • Sell Good, Better, Best;
  • Create an amazing proposal template that delights;
  • Connect with your partners and channel managers.

Where to from here?

Need help growing your business? Contact us, and one of our experts will give you some obligation-free advice.

Comments

2 comments

  1. Avatar

    Tommy

    This article is simply awesome, very informative. Enjoyed reading Increase conversions part. That landing page generator idea was genius, to say the least.

  2. Avatar

    Reece

    You really summed this up really well, When I think about growing my company like this I imagine that it’ll take many years. I really like your ideas on how you deal with your sales approach. I am looking at adding some sales automation into the mix. Do you have any ideas on how I can automate my sales processes?

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