The upcoming election. Spending hesitation. Inflation. Increased competition. Higher wages. These are all formidable forces that can negatively impact your MSP business—and are doing so already, according to exclusive market research.
You can combat these forces by joining MSP Success for a free live webinar put on by TMT, “Election Year Turbulence: How To Set Yourself Up To Grow” with Greg Crabtree, CPA, author of Simple Numbers, and partner at CRI; and Robin Robins, CEO and founder of TMT and MSP Success.
Crabtree and Robins will discuss some concerning trends they’re seeing specific to the MSP industry and how they may impact your own MSP business:
The successful close rate on MSP proposals and new deals has dropped significantly this year, with the average MSP polled by TMT closing only 23% of qualified opportunities. This is particularly in play with larger deals. Many MSPs that were consistently closing north of 65% of the opportunities they got in front of last year are now discovering that larger contracts are taking much longer to close.
TMT research also shows that inbound leads have dropped by 40%, from an average of 25 raw leads per month to 15.
RELATED: Survey Says: MSPs Are Growing, But May Have To Prepare For ‘Street Fight’
In addition, there has been an influx of new startup MSPs that are increasing competition for deals by driving price wars for IT services. A report published by Datto shows that for every MSP being acquired or merged, three new MSPs are starting up.
Finally, digital lead generation costs are high right now and will continue to climb as we get closer to election day, meaning it’s getting more expensive to generate qualified MSP leads. “With political ad spend skyrocketing, digital advertisers will have to fight for eyeballs, and this will drive up the cost per lead and per customer. Given that the holiday season is directly following the election, I don’t think we’ll see a reprieve until Q1 of 2025,” Robins says.
She adds, “According to Service Leadership data, the average MSP is generating only about 9% in net profit. Most of the “growth” being reported is not coming from new clients acquired and incremental MRR, but from a response to increased costs. Many MSPs have raised their prices by 20% or more over the last couple of years, which is not adding to profitability, but rather preventing losses.”
In addition, according to data reported by a TMT Expert In Residence, Paul Cissel, a consultant for
Service Leadership, 16% of MSPs are NOT profitable right now. Further, their data indicates that growth HAS SLOWED, with YoY revenue growing only 6.8%, and only 1.8% in Q2 over Q1.
Robins and Crabtree agree that the culmination of these trends requires a new strategic approach to marketing and customer acquisition—one that focuses on high-value clients and takes a “street fight” approach to combating the competition.
Don’t Wait To Be Down For The Count
The time to take action to preserve profits, grow sales, and acquire new clients is now. Here’s what you’ll learn from this live webinar:
- How to combat the flood of new MSPs entering the market and undercutting prices.
- What you can do to improve close rates and get clients and prospects alike to move forward with IT spend.
- What needs to change in your marketing approach between now and the end of the year to get traction.
To register for this webinar and get the strategies you need to not only keep your MSP resilient during uncertain times but to acquire better and more lucrative clients, register here.
