Do you need marketing at your MSP?

By Ian Richardson, Principal Consultant, Fox & Crow

I speak with a lot of managed service provider owners who “need marketing.” Need is such a strong word. Need implies necessity – without it we won’t survive. We need water, air, and food. We need shelter from the elements, and safety from danger. If you “need” marketing, something is going on. I have bad news for you. Chances are you have problems MSP marketing can’t fix. What causes MSP marketing needs There’s a ton of causes that creates this “need” for marketing. I’ve got the 3 most common situations below. These stem from hundreds of conversations per year. These conversations are with MSP owners across the globe. They are of all demographics and revenue classes.

1. “We’re not growing.”

For whatever reason, growth has leveled off. At the end of the day, growth derives from a sales team. MSP Marketing “supports” sales efforts, but it doesn’t determine revenue. Sales process, team efficacy, activity, and management create the “flywheel”. They feed your MSP’s growth requirements. Chances are you have some service delivery problems. Those problems are slowing down unprompted referrals from customers. You’ve stopped doing the activities that generate opportunities from your existing base. I would wager that natural attrition is eating up the rest of organic growth efforts.

2. “We’re losing customers.”

Everyone loses accounts. Figure out root cause. If you have a slew of 10-to-20-year customers, watch out. You’re likely approaching an ownership churn cycle. These occur when owners of companies elect to exit their business.

That ownership churn involves some sort of transaction. Private Equity. Sale to a competitor. Transfer of the business to children or employees. Regardless of the method, you are on the chopping block when it occurs.

You may have significant service delivery issues causing satisfaction with your company. A perceived lack of value for dollars invested. Could be both. Dive into both account management and service delivery and fix the ship. MSP Marketing won’t do anything if you have a bad reputation in town.

3. “We’re not making money.”

My favorite of the bunch. You have a triangle of issues: finance, sales, & service. If your P&L is showing break even or, even worse, cash burn scenarios, it’s a problem. You need to pump the breaks and get perspective. There’s no surefire solution for each scenario, but these 5 actions can help get you started.

– Assess each customer account for profitability. Chances are you are “paying” certain customers to be their MSP. Look at:

• Hours spent per account
• Average loaded hourly cost per employee
• The hardware/software COGS of delivering the service agreement.

Fix the problem accounts.

– Scrub your monthly expenses. You likely have many thousands of dollars of SaaS subscriptions. These can trim or eliminated – dropping revenue to your bottom line.

– Redo your budget. Look into “Profit First” by Mike Michalowicz. It is a good guide on how to shift thinking on profitability of an organization.

– Renegotiate Vendor Contracts. Find savings or new vendors who can improve cost structure.

– Analyze employee time utilization. Shift activities towards revenue generation and away from time consuming administrative tasks.

This isn’t an exhaustive list – but it can get you started on righting the ship.

When do I “need” MSP Marketing?

So, we talked about what marketing doesn’t do. What can it do? When do you “need” MSP Marketing?

You don’t.

You never “need” marketing. MSP Marketing is a strategic investment in growth. It’s never “required” for a business. You can prospect. You can network. You can generate referrals intentionally. You can pursue mergers and acquisitions.

MSP Marketing is a growth channel, but it’s not the ONLY growth channel. It can work, same as the rest of your options. But only if you approach it strategically. You need the right focus and budget allocation, along with proper expectations.

 

If you’re thinking about marketing for your MSP – Fox & Crow can help. We’ve built marketing strategies that have organizations across North America. Book a call at https://foxcrowgroup.com/contact to get the conversation started.

You might also find value from our monthly newsletter. You can sign up at https://short.randr.consulting/newsletter. In it we share stories, resources, and guidance. We talk sales, marketing, and other strategic areas for MSPs every month.