Written by: Ray Wright
During the past few months I’ve focused significant attention on the habits and best practices of higher growth MSPs, based on the results of our recent MSP Pricing Survey. Of course, how you price, what services you offer, and what value your services represent, are vitally important to your success, but at the end of the day, if you are unable to attract new prospects and close deals none of that matters.
There are no magic bullets or tricks that you can use to develop new business. Like customer satisfaction, fiscal responsibility and efficient service delivery, lead generation is a discipline that requires daily action and a consistent approach. It’s also expensive. According to research*, it now costs software-as-a-service (SaaS) businesses $1.07 (on average) to acquire every $1 of annual contract value. It’s a good bet that the cost of acquiring $1 of annual recurring managed services business is of the same order.
Assuming that you run an averagely efficient sales and marketing operation, the high cost of customer acquisition in today’s marketplace has several key implications:
- Your existing customers are a key source of growth – it’s far less expensive to upsell/cross sell existing customers than it is to acquire new ones
- Maintaining your existing customer base is as important as finding new customers – with acquisition costs close to revenues, profits, mainly come after year one of the contract
- Investing time in sales and marketing effectiveness and efficiency is important and worthwhile.
Whatever your level of sales and marketing investment, it pays to think about efficiency as carefully as you think about the efficiency of your managed services operations. For example, what can you automate? Where can you standardize? How can you be proactive to avoid waste and unplanned work? There are way too many aspects of sales and marketing to cover even in a whole blog post series but here are 3 very important considerations:
- The mantra of every marketing expert but often the most ignored advice too. With limited funds to invest it’s vital to focus your messaging and your efforts on a well understood sub-segment where you know you can be successful and where your sales team knows it can win. This might mean selecting an industry sub-segment, a close geographic area, a functional group that needs your expertise or even a particular client attitude – “we’re focused on our business and are delighted to outsource our IT needs”.
