If you are doing any kind of digital marketing or advertising for your MSP business, then you know that the cost for digital marketing has gone up exponentially.
The other day I saw that Facebook advertising is up 61% YoY. Pay-Per-Click is up 15% YoY. Google display is up over 75% YoY. Across the board, all digital marketing is going up in cost. So if you’re trying to do any kind of digital marketing in your MSP business, then you know that the cost of getting more customers is getting more and more expensive.
In fact, I saw one Forbes article where it said that digital marketers are now looking at cheaper cost alternatives to marketing like direct mail. And that really made me laugh because so many people, when you talk about direct mail, their ears flop over. They don’t like it, and they don’t want to do it because it costs so much. But now digital marketing is costing as much or even more than some of the offline marketing that you may have done in the past.
So if you’re an MSP and you’re trying to get new customers, what can you do? What should you be doing to combat the rising costs of marketing and advertising?
Even in getting new salespeople, SDRs, telemarketers, appointment setters, etc… the demand for the good ones has gone up and so has what they are willing to work for today. It is exponentially higher than it was right before the pandemic.
This is causing you as an MSP to have to figure out what you are going to do to combat rising advertising costs. Also, inflation is going up, and the cost of labor is going up.
Here are 5 hacks to combat that if you feel like marketing and advertising costs are just too much:
1. You Need To Raise Your Prices.
This may sound obvious. A lot of you may be saying to yourself, “Well, Robin, I can’t raise my prices because my competition is cheaper than me,” etc. I’m going to tell you right now, best in class MSPs have raised their prices across the board by 20-25% this year. So if you have not raised your prices in a couple of years and you’re still having clients pay you the same fees that they paid you pre-pandemic, regardless of inflation and the labor costs right now, I guarantee you took at least a 10% cut with the technicians’ cost on your margins. You HAVE to raise your prices right now.
2. You Need To Go After High Value Customers.
Not all customers are created equal. If you look at your client base, it’s probably the 80/20 rule. Where 20% of your customers represent 80% of your profits in your revenue and feed your business. Instead of just trying to get more customers and more leads, you need to be strategic about identifying who are the high value customers for you. That does not necessarily always mean top line revenue customers. Sometimes your big customers can be unprofitable, noisy and a pain in the rear end.
But who really are the high value customers for you? Then put together a plan so that you only invest your marketing time, dollars, attention and resources in targeting and trying to attract high value customers (whatever that is for you). And it might be slightly different for you than it is for another MSP. It depends on your niche, your expertise, your state and your area. You CAN get higher value customers.
3. You MUST Increase Your Close Rate.
By improving your sales process, you can close 50-60% of the opportunities you’re in front of. You’re going to be able to monetize those customers and spend more on advertising than if your close rate is around 10-20%. I can tell you that for MSPs, their close rate is abysmal. It’s down at the 10% range. You NEED to improve your sales process so that you can increase your close rate.
4. You Need To Have A Premium Offering.
When you’re talking to a customer, you can never have a take it or leave it attitude. It’s wise to have an A and B option. Never sell a client less than they need, but have your normal offering and then have a luxury offering. Maybe it includes after hours support or faster available service. It’s really up to you to figure out what it is that your high value clients want and carve that out as niceties or extras.
Just like first class in an airline. The airline is still going to get you from point A to point B safely, but you’re just going to be able to get there in a little more comfort and style. Think of it like that. You can offer a premium version if it makes any sense to do so. You also have to make sure it’s done right. Across the board 10-30% of the people you talk to are going to take the premium offering more often because of who they are more than anything else. I’ve done this for years, and I’m telling you right now that this is a way that you can start to raise your prices.
5. You Can Get Better At Monetizing Your Advertising.
The fifth and final “hack” to combating rising costs of running your MSP is just to have better ads. Recently during one of my seminars, I held up a $1 bill and a $100 bill. I asked the audience, “Out of these two paper bills, which one’s more valuable?” Of course everyone agreed the $100 bill, but why is that? And they say, “Well, it’s $100; it’s worth more than $1.” My question is why is that? What I found is that it really comes down to the message printed on the paper. A $100 bill is worth more because the message on the paper says it’s worth $100.
The same goes for your website. The same goes for your social media, with any of the ads you’re running, and anything that you’re doing in marketing. If it’s costing you more to get a customer, then that advertising has to perform better than it did in the past. The only way that you’ll be able to achieve that is you’re going to have to have better copy and better strategic marketing strategies. Maybe you’re targeting a little bit smarter, but you can’t forget the importance of the headlines, the copy and the offer, etc.
You can have websites that cost money to host, no matter whether it’s performing or it’s not. Facebook doesn’t give you a discount if your ad sucks and it’s not getting the right kind of leads. Same with Google. If you pay for a Google Pay-Per-Click campaign but you’ve set up the campaign incorrectly, you don’t know how to write the ads, and you don’t know how to write the landing page that they’re coming to… then your ad costs go up even more because they’re not as effective as they can be.
Another thing that you should do is get yourself registered for this year’s Roadshow!
We are going to be talking about specifically how you implement a marketing plan to not just get more customers, more sales, more leads, etc… but how do you get more high value clients?
Seating is limited. So you’ve got to click on the link below and claim your city because if you don’t, tickets are going to sell out fast. Get registered, bring your marketing people or bring your business partner. This is going to be a high value event. You’re going to love the content. You’re going to love what we’re bringing to you. But you’ve got to be there or you’re going to miss out!
So click on the link below, get registered and I’ll see you at an upcoming show!