One of the popular questions we receive from our clients is: "What are you seeing in the market?" So, we've compiled data from different studies and stats from over 1,000 MSP clients in our 10 years of business. And we're using the data to show you what we're seeing in the market and how you stack up in the industry.
The more that you know about your business and the industry, the better decisions you can make. If you're currently struggling to get more leads, spending money on marketing, wondering how to get more referrals and you don't even know your numbers then you're flying blind, operating from a place that won't allow you to make educated choices about your marketing direction.
Important Stats To Know About Your MSP
In 2017, the MSP industry was valued at about $155 billion. Thus, there is ample opportunity for MSPs to grow their revenue. Comparing how you stack up to MSPs can help guide you with your goals and encourage a stronger marketing strategy. With over 10 years of studying the MSP market, we know what top and best-in-class managed service providers earn each year.
As you've probably figured out by now and something we've surely seen in the market - the MSP industry has become commoditized. Because of this, it's becoming harder for MSPs to increase their prices because of the competition. It's also causing a lot of MSPs to offer added value for little to no additional costs, thus lowering profit margins.
As a business in a competitive market, it's vital that you look at your margins, know how that compares to other MSPs and think of ways like offering more services and increasing prices to improve your margin.
Retaining current clients is easier, cheaper than acquiring new clients and overall more profitable for your business. Most MSPs focus all of their efforts on getting new clients and don't realize how impactful a healthy retention rate is to your business. Increasing your retention by even 5% can grow your profits 25% - 95%.
With such a large market, it's important for MSPs to deliver continuous value that can help strengthen the relationship and retain clients longer. Then, continue to engage with your clients and capture customer feedback with tools like SimpleSat.
Learn How You Stack Up
To help answer your question of 'what we're seeing in the market', we've created a tool that calculates key stats for your business by asking the questions that matter most. To get a comparison of where you stand in the MSP market, answer a short questionnaire with a few key stats about your business. When you finish the questionnaire, you’ll receive a 2-page PDF in your email that’s ready to share and use to guide your marketing efforts.
Step 1: Complete the Short Questionnaire.
We’ll ask you only a few questions about how many active clients you have, your margin, etc. This information will allow our tool to then calculate your current retention, cost of acquisition and lifetime revenue value with resources that can guide your marketing strategy.
It’s tempting to try and complete the questions as quickly as possible. However, the more accurate the information you provide, the more valuable your comparison will be. An accurate analysis will provide the insights you need to understand how your business stacks up.
Step 2: Receive your comparison via email.
After completing the questionnaire, you'll receive an email with a link to a two-page downloadable PDF. You'll also receive editable versions in PowerPoint (pptx).
Your customized analysis will have important industry stats that dive deeper into average MSPs vs best-in-class MSPs, a visual comparison, and calculations of other important stats including lifetime revenue value and cost of acquisition. We've also included resources.
Tip: This is also a good time to go back to the tool and test different numbers, based on your goals, to create additional comparisons. You likely have an idea of how much you'd like to grow your company, so it will be beneficial to look at what those numbers would look like for your business if you were to accomplish your goals.
Step 3: Review, share and adapt your numbers
Your analysis may raise some questions that can be expanded on as a team. That's why it's important that you share the documents with other stakeholders who can help to flesh out those topics and provide additional insights.
The goal of this exercise is to dive deeper into your company's numbers and understand how you stack up to other MSPs. Share your comparison with everyone in your organization. Everyone needs to be on the same page about where you stand and what your goals are.
Here are a few ideas:
- Make the comparison a part of your conversations so that they are always considered when your marketing direction and strategy is created.
- Place your analysis in the office where people can see them to remind everyone of where you stand.
- Discuss your goals and strategies in meetings with all of the people who engage at a marketing or sales level.
Getting the Most From Your Comparison
One thing that we've learned is that most businesses don't know their numbers which means they don't know how they stack up in the industry. So, the first step is figuring out your numbers. Also, think of your comparison as a living document. Your numbers should always be growing and adapting based on new information. If you acquire or lose clients, make revisions to your analysis. If you're spending more or less on marketing, make a note of that.
If used correctly, knowing how your company stacks up can have a tremendous impact on your marketing efforts and your bottom line. Just remember to always think about your numbers as you're creating your marketing campaigns which can help you grow your business.