Like so many MSP owners, the appeal of running an MSP is the residual income which allows you to build something sustainable that continues to earn cash flow. On top of this, owners are looking to have more time out of their office and doing the things they enjoy.
In order for that to happen, it’s important to acquire quality clients that can grow your business. To attract these clients, you’ll need a solid marketing strategy amongst other things. Below is a comprehensive strategy and what you should be focusing on to grow an effective MSP.
Follow Your Top 5 KPI’s
key performance indicators (KPI’s) do exactly what the name suggests; they are indicators used to measure performance in relation to business objectives. To figure out how your business is fairing, you need to track these key areas and see how you can improve them.
Generally speaking, a healthy MSP should:
- Have a lifetime value that is 3 times greater than customer acquisition costs;
- Recover customer acquisition costs within the first year;
- And can offset churning through expansion revenue.
In order for that to happen, you need to be looking at those five KPI’s. Those being:
- Churn – the rate in which customers or revenue is leaving your business each month as a percentage of total customer count or revenue respectively. Not as important of a figure when starting out as you’re only starting and customer count will be lower.
- Monthly & annual recurring revenue (MRR/ARR) – Recurring revenue is the amount of income you can expect to generate within a period of time based on client service contracts and subscriptions. As long as you provide value, customers will keep paying.
- Lifetime value (LTV) – Total revenue generated by a customer over their lifetime. The longer a customer is retained, the higher the value.
- Cost of acquiring a customer (CAC) – The amount spent on getting a customer which includes sales, marketing and advertising.
- Net Promoter Score (NPS) – Used to quickly survey customer base and find unhappy customers and are about to churn even before they do. NPS uncovers the source of dissatisfaction and gives you feedback you can use to improve processes. It’s a highly valuable tool to use.
Have A Sales Strategy
If you have one, great! If you don’t, it’s important to figure out one. Talking to an experienced sales manager is one way to ensure it gets done. Overall, you should look at your current MSP business model and ask yourself the following questions:
- What is my current recurring revenue?
- How much recurring revenue am I looking for by the end of the year?
- How many new accounts will be needed to achieve these targets, on top of my churn rate?
- How many new leads will I have to have every month to achieve these targets?
Asking yourself these questions and becoming intimate with the answers will help you strategize what should be done next.
Have An Incredible Product
Your services are your product and there are ways to productizing your offers into sellable and repeatable solutions. MSPs worry that locking down their offers makes them miss out on sales but that’s not the case. If you specialize in services or actual products like Citrix or Microsoft, you can still have success.
One avenue is to join vendor marketing and sales programs. Organizations have these programs everywhere and MSPs can leverage from them. Examples are Microsoft’s CED and GTM programmes, and Citrix’s MarketingIQ and SalesIQ.
Understand Your Customer to Build Value In Places They Care About
Another good question to ask yourself: What makes you so different from any other MSP out there?
Your goal is to establish a story that’s wrapped around a great Customer Value Proposition or Unique Selling Point.
To make that, you need to know your customers very well. It’s a matter of asking yourself some key questions. Consider these:
- Who is your ideal customer?
- What industry are they in?
- How many seats do they have?
- Are there typical saboteurs in the organizations you’re selling to?
- What are the goals of your customers?
- What pain points do they have that prevent them from getting it done?
- What are their gains from getting the work done?
- How do your services solve their pains?
- How do your services create gains for them?
Have An Automated Lead Generation Machine
If you’ve got a website already built then you already have the foundation of a lead generation machine. The key is to tweak your website to make it more visually appealing, optimized, and lead-capture mechanisms to generate qualified leads.
All of these things are easy to do and can help generate leads that convert into paying customers and recurring income.
Generate Traffic To Your Site
There are several strategies to generating traffic. After taking the time to develop your website’s lead generation tools, it’s important to grow the amount of traffic that enters your lead funnel. Some of the strategies you can consider are:
- Paid search – Online, targeted ads. Great for staring out but it can get expensive if it’s not managed properly.
- Remarketing – A technique where advertisements follow people who have been exposed to a specific brand already.
- Free search traffic – Also known as SEO (Search Engine Optimization), this strategy is slow. It’s more of a long-term strategy as you won’t see the payouts until six months in. However it’s a solid foundation of free traffic when used.
- Social media – Very helpful traffic when used properly. Focus on building a culture and generating leads and it’ll help you out.
Using A Good, Better, Best Pricing Strategy
It’s an old pricing theory and it’s still relevant to this day. When you give customers options, it presents them with all the available features while empowering them to opt into the one that best suits their need and budget. It also provides you with the opportunity to offer upgrades.
Implementing a G-B-B strategy will require you to keep in mind of the following:
- How simple your offer actually is;
- Ensuring there is a clear comparison of each pathway and upgrades from each level;
- Checking that you’re using numbers wisely and avoid numbers ending in 9,5, or 0;
- And testing the strategy regularly to find the ‘sweet spot’ that is a win-win for you and the customer at every level.
About MSP Corp
MSP Corp understands you’ve worked hard to build your business and you want to protect it. With a mission to be a world-class business partner for MSP owners across Canada, we actively seek to acquire and partner with owners looking to secure the value of the business they have built and provide a seamless exit process that ensures business continuity and employee and client stability.
Contact us today to learn more about selling your business and maximizing its value.