If you’re doing any kind of digital marketing right now, you’ve probably noticed how much more expensive it’s getting. Even Forbes reported that some marketers are looking at cheaper alternatives, like direct mail. That made me laugh because most people think of direct mail as expensive. But now, digital marketing is costing as much or even more than traditional methods.
So, what can you do as an MSP to fight back against rising costs in advertising, sales and even labor? The demand for skilled sales development reps (SDRs) and telemarketers has pushed wages way up since the pandemic, too. I’ve got five key strategies for you to combat these rising costs and keep your business growing.
1. Raise Your Prices
I know what you’re thinking: “Robin, I can’t raise my prices! My competition is already cheaper than me!” But here’s the thing—best-in-class MSPs are raising their prices. If you haven’t raised your prices in a few years, you’re definitely leaving money on the table. Inflation, labor costs and the price of everything else have gone up. If you’re still charging your pre-pandemic rates, I guarantee you’re taking a 10-15% hit on your margins.
Raising your prices is not optional anymore. It’s a necessity to keep up with the rising costs of running your business.
2. Target Higher Value Clients
Not all clients are created equal. You know that. I bet if you looked at your client base, you’d see that 20% of your clients make up 80% of your revenue. So instead of just trying to get more clients, be intentional about going after higher-value clients.
High-value clients aren’t just about top-line revenue. Sometimes the biggest clients are the biggest headaches. Focus on clients who are profitable, easy to work with, and who truly value your services. You’ll want to invest your marketing dollars, time, and resources in attracting these types of clients. And you’ll be surprised how much more profitable your MSP becomes.
3. Improve Your Close Rate
One of the easiest ways to make your marketing more effective is by improving your close rate. If you can close 50-60% of the deals you’re working on instead of the average 10-20% most MSPs are closing, you can spend more on advertising because your marketing dollars will stretch further.
Improving your sales process can have a dramatic effect on your profitability. A better close rate means you’re monetizing the leads you’re generating, which makes it easier to justify spending on advertising.
4. Offer A Premium Option
This one is powerful: create a premium service option. When you’re selling to a client, don’t just give them one option—give them an A/B choice. Your standard offering is solid, but then offer a luxury version that includes extras like faster service or after-hours support. Think of it like first class on an airline. Everyone gets to the destination, but some clients will pay more for extra comfort and perks.
I can tell you from experience, 10-30% of clients will choose the premium option just because of who they are. This allows you to raise your prices without “raising your prices,” and it’s a simple strategy that can significantly increase your profitability.
5. Create Better Ads
Finally, if you’re going to spend money on ads, make them work for you. Whether it’s your website, social media, or pay-per-click campaigns, the message matters. If your ads aren’t performing, you’re just burning money.
It’s like the difference between a $1 bill and a $100 bill. Both are printed on the same paper, but the message on the $100 bill makes it worth more. The same goes for your ads—whether it’s the copy, headlines, or the offer, you need to make sure every element is optimized.
When your ads are better, you can compete even in a market where costs are going up. Facebook, Google—they don’t give discounts for poorly performing ads. If your ad copy is weak, you’ll pay even more because it’s less effective. So invest in refining your message, targeting, and strategy to make your ads perform at their best.
Take Action Now to Secure Your MSP’s Future
In today’s environment, rising costs are inevitable, but they don’t have to put a damper on your business growth. By raising your prices, focusing on higher-value clients, improving your close rate, offering premium services, and refining your ads, you can not only offset these increases but also drive more profitability. The key is being strategic and intentional with your marketing efforts. Now is the time to assess your current strategies and implement these changes to stay competitive and grow. Don’t just wait for the market to shift—take action today, and your MSP will be stronger for it in the long run.
