It takes a marketing sledgehammer to break out of the hamster wheel of stagnant growth.
Many MSPs get caught in the slog of daily tasks and putting out fires, taking care of small, unprofitable, and problematic clients—and struggling to grow as a result. Radical change, such as making time for marketing—by any means possible—and focusing on larger customers, is one of the most surefire ways to break free from that trap and set your MSP up for exponential growth. Here’s how three business owners put these MSP growth strategies to work.
Make Time for Marketing
Without a reliable, established marketing process, there’s no guaranteed way to bring in that next client. This makes the risk of losing a client all the greater; without a way to replace that income, every major client loss becomes a potentially business-ending disaster.
“If you can’t bring in that next client, you’re going to have to lay people off. You’re going to have to suffer,” says Adam Spencer, CEO and founder of 911 IT. “It’s going to be painful when that happens. That’s why you need to have that [marketing] engine running.” (For more on Spencer’s story, see How This MSP “Dripping In Desperation” Became A Millionaire Entrepreneur.)
Additionally, the clients who keep you the busiest are usually the least profitable—problem clients who add stress, overwork your employees, and quibble over every last dime. “It’s usually the crappy ones who are wasting your time,” says Mario Zaki, CEO and founder of Mazteck. “Those are the type of clients that you want to get rid of. Replace them with ones that understand the value of your business and what you’re offering.” Before Zaki started being choosier with his clients, he used to have little time to market to more profitable clients, because he was stuck taking care of problematic ones. (For more on Zaki’s story, see Complacency Kills: How Taking a Risk Propelled Mazteck To Over $2 Million In Annual Revenue.)
“It’s like a hamster on a wheel,” says Roland Parker, owner of Impress Computers, referring to a similar period in his business. “You’re going faster and faster, but at the end of the year you haven’t actually gone anywhere. We had to get away from that.” (For more on Parker’s story, see How Impress Grew ARR From $300K To $3.5 Million In Just 3 Years.)
Larger Companies Understand Your Value
One major hurdle most MSPs face when recruiting clients is explaining the value of the managed services model. Most small businesses are used to the break-fix model, says Zaki. But that’s not the case for larger companies.
“It’s actually easier to sell to those larger companies [than a small business], because they already are familiar with the model,” Zaki explains. “They understand the value. They know what to ask for and what you’re talking about.” Additionally, Zaki noticed the sales process shortening drastically—from a months-long ordeal to a matter of weeks or even days.
“They also have the budget to [invest in your services],” adds Parker. “You’re spinning your wheels on these small companies that are never going to grow and wasting so much time and effort.”
Spencer has found that small clients come with their own set of challenges: increased risk and an unwillingness—or inability—to spend. “More mature companies actually make less noise, in a way, because they’re more likely to have the budget to buy into your whole stack, buy new equipment, and invest in fixing problems,” he says. “Those really small guys are stretching to pay your invoice. It’s hard for them, so they want you to stretch too. Those are the ones that expect way more out of you. They’re way more demanding and way less forgiving.”
Prepare to Let Smaller Clients Go
“If part of your time is spent running around with smaller companies, you have to be prepared to let them go, so you can concentrate your efforts in marketing to bigger companies,” says Parker. “If you don’t do that, guess what? Next year you’re going to be sitting in the same boat, running in the little hamster wheel and never going anywhere.”
Zaki agrees, pointing out that the workload required and time necessary to take care of numerous small clients and a few large clients are the same. “If you’re marketing to these bigger companies, you’re doing pretty much the same work. You’re using the same time that those smaller companies were taking up so much of. You’re using that time to take care of somebody who’s paying you more. You can then hire [new people] and grow the company,” he says.
Radical Shifts Fuel MSP Growth Strategies
These three MSPs all made radical shifts in their businesses and have reaped the benefits, both in financial growth and personal freedom.
“We had to step back, revolutionize the way we looked at things, and learn from other people,” says Parker about his MSP growth strategies. “Because if you think you’re going to do it yourself and haven’t succeeded in the past couple of years, guess what? You’re never going to change. So, stop what you’re doing and learn from people who have gone ahead of you.”
Parker, Zaki, and Spencer recently joined host Robb Patterson on an episode of the My First Million podcast. Tune in to the full episode here to hear more about their newfound ability to step away from their MSPs, how to find a budget for marketing, and the benefits of joining an educational marketing community.
