MSP Growth Survey Results! An Insights Walkthrough
A growth mindset is a key to your success!
More than 125 MSPs shared their plans and expectations for future growth. Join us to understand your position among your peers in this dynamic market and focus on accruing more revenue this year.
We asked MSPs about last year’s business growth, this year’s goals and targets, and most importantly, strategies to keep growing. Zomentum’s Shannon Murphy and Dave Sutton from Wingman will walk you through answers from your fellow technology partners, providing insights and advice that can positively impact your future business growth.
A few survey questions include:
- How has the pandemic influenced your decision to invest in Sales/Marketing?
- Did your revenue increase, stay roughly the same, or reduce in 2021?
- Do you have enough resources to keep pace with current workloads? For how long?
- What could keep you from achieving your 2022 goals?
- Will you invest more, less, or roughly the same in Sales/Marketing activities for your 2022 growth plan?
Result 1: Incremental Growth in Sales and Marketing Investments YOY
53% of MSPs decided to invest more in sales and marketing in 2021. Out of those, 44% decided to invest more in their sales and marketing, influenced by the pandemic.
Interestingly 13% also took the plunge to start investing in sales/marketing for the first time – because of the pandemic. No one halted spend entirely!
49% of MSPs responded saying they will invest more in sales and marketing in this year 2022.
MSPs realize the importance of continued sales and marketing activity and want to build budgets for it.
Since no one halted spend, it shows that there's still that confidence in the MSP space, despite the fact that a lot of MSPs may have still had clients that have furloughed staff and have reduced their MRR in some cases.
Result 2: But Still Wondering Where to Start with New Marketing Endeavours?
Although 70% of respondents said they have sales and marketing activities ongoing for their MSP business only 39% regard those marketing programs as live and proactive.
Investment in sales and marketing is a forward investment. Investing in campaigns may not guarantee a payback until 12-18 months, given how it takes time for many of these opportunities to come to fruition.
Technology partners may not put their efforts into marketing, mainly because they're not sure where to start or how to best communicate and engage on specific channels.
Here are some ways to take full advantage of your sales and marketing spend:
- Want to try video marketing but don’t know where to start?:Shannon shares a way to use SEO to generate topic ideas. Type into search a topic or question your target is likely to care about. Browse the “People also ask” section and click through a few suggestions. Google will keep adding additional queries. Right there you can find a dozen topics to pick up your phone and shoot a selfie video explaining your take on these FAQ. This way, you can generate topics you want to talk about.
- Trying to get attention in cluttered inboxes? Keep an email swipe file: Breaking through cluttered email inboxes can be hard. Follow great content marketing agencies and look at their subject lines and email body. Maintain a folder/swipe file and any time you see an email that actually grabbed your attention, put that there. In the long run, you can refer back to it and “swipe” some ideas to try and get that open!
- And when you do email, deliver value!: Often we hear advice, “create great content and drip it out.” Well, here’s a little secret, if you want to be a thought leader: the audience must get some value from opening your email. Content marketing was created to be altruistic and educate your audience. So when your audience opens your email, you have the perfect opportunity to educate them and build a connection, even if they don’t click-though. Yes, you want them to look forward to your marketing emails.
- Hire a really good marketing agency for PPC and Display ads: Educate yourself on the metrics to look for so you know how to hold the agency accountable. Do a little research; there are plenty of articles regarding KPIs and metrics for different advertising methods. Make sure you know those when you are qualifying an agency. Furthermore, request QBRs with your current agency and dig in with questions.
Result 3: Here’s How to Hit Growth Goals with Sales Targets
Likely indicative of most average business sectors, more than half of those surveyed said that they don’t have formalized and tangible targets.
Most MSP owners/managers are considered reserved people and hence are more passionate about incremental growth goals as opposed to an aggressive approach. They don't want to set a target that they're not going to reach. So they take a considered, steady approach.
But without structure to targets, how can we ensure that we're going to achieve these goals?
Dave gives a very simple mathematical strategy:
- Work backwards on setting targets. Start by looking at your own business. Most MSPs would have their ideal customers of 40-60 seats but it’s not reflective of the market at large.
- Look at seat/year value. Compare that to a revenue target that you have in mind. This gives you an indication of how many seats you need to add. Depending on the number of seats you can decide how many business you go after.
- Analyze your conversion rate. This means the number of deals you won out of the existing deals in your pipeline. For net-new business conversion rate would be lower when compared to referral business.
Result 4: Confidence Needs to Be Met with Action, You Can Do It!
Bucking the MSP trend of being reliant on existing business, 62% of those surveyed said that 2022 growth will be mostly from net-new clients.
This is quite a jump from the 49% that saw growth through net-new in 2021.
The survey also pointed out that 63% are expecting net new to make up a majority of their pipeline, but that many can't see beyond 6 months for their pipeline, and that 73% are feeling confident for the future.
We all know new business is likely to come from adding net new logos to your client portfolio. More opportunity exists outside of the current client base that perhaps the majority have been reliant on. So looking for those net new logos is really important.
Our survey respondents said they have business in their pipelines for the next six months. But that’s only until Q3 of 2022. So how do we have reliable growth long term? The work starts now as it takes months of work in advance of getting those leads through and closing that new business!
Since so many are feeling confident of the future THIS is the moment where MSPs need to meet confidence for 2022 with action.
So hello and welcome to our 2021-2022 growth survey results webinar and insights walkthrough. I'm Shannon Murphy, chief marketer at Zomentum, the revenue platform reinventing partner sales. Today I am joined by Dave Sutton.
So let me tell you a little bit about Dave. He is the managing director at Wigman Marketing. And Dave began his career with MSPs, going to work for one at the turn of the banking crisis. As a sales and marketing manager, he helped these MSPs grow but had one issue, he could not find a great agency to share his workload with.
Dave spotted a gap in the market. And that seeded the idea of what is Wingman, his agency today. It's a comprehensive digital agency helping MSPs with tailored marketing and sales efforts designed to achieve growth results. Welcome, welcome, Dave.
Thanks, Shannon. I couldn't have said it better myself. Let me return the favor. I'll introduce Shannon for those of you that don't know her. Shannon's been around the industry for a long time. She's a consultant, speaker, writer, and as chief marketer as a Zomentum, she oversees messaging, strategy, and co-marketing.
Shannon brings with her 15 years of experience into B2B SaaS with the team at Zomentum. She's passionate about helping the company's 2000-plus partners grow their businesses to add $500 million a year in IT sales revenue.
So I'm glad to be here and presenting the results that we've been working hard on for a number of weeks now.
Yeah. No, I'm so happy to be collaborating with you, Dave. I don't know if anybody saw this on LinkedIn. I was joking around and said that, like, Dave and I would have been really good like partners in high school of getting the team project done.
I don't know. I feel like we work well together. I enjoyed collaborating with you on this. So shall we get started?
Yeah. Let's take a look and see sort of why we're all here. So the insights that we gather should hopefully help all MSPs understand their place among their peers, better realize growth goals, and take more of a strategic approach.
So there's insights that you can get from thinking about where am I. Maybe if you've participated in the survey, think about where are you now versus when you filled in the survey. Some people I know started the survey back just before Christmas. Some people have filled it in through January and into February. So just think about where you are now versus where you were.
And as we go through and look at the results, compare how you feel versus what the numbers are telling you. Where do you stand among your peers?
Mhm, absolutely. Yeah, a little bit more in the methodology. As Dave said, we kind of kicked it off before Christmas. We ran it to the beginning of February.
The survey was sent to 60,000 MSPs. And just shows you the return on email marketing that we had about 129 responses. So, you know, y'all, check your inboxes more often. OK? We want to hear from you.
The responses were anonymous. But if one wanted to, they could supply their email if they wanted to be alerted to the survey results. And respondents were administered roughly 17 questions.
So we've been going through those looking for insights. I don't think we're presenting all 17. Right? But just what we thought was most interesting to you guys.
You'll also have a chance to make your voice heard because as we started analyzing this, we thought of some follow-up questions, little nuances and things like that, that didn't occur to us initially. So we might dig in with you and kind of ask you follow-up questions and see what you have to say about these topics.
And with that, I will turn it over to Dave to kick us off.
So we started off, the first set of questions look back at 2021, thinking about what happened at the tail end of the pandemic and how that year went for you all.
So initially, we've seen pandemic-busting growth for MSPs through '21, with 95% either staying as they were. So 15%, they're staying as they are in terms of revenue from the year before. And a massive 80% have shown that they've increased. Sadly, 5% reporting a decrease in revenue there.
So, yeah. It's positive to see that despite the pandemic-- hopefully that's starting to fade away during the end, I guess, of the year. But throughout that year, the pandemic was fading and confidence was coming up.
But also, of course, MSPs were well positioned to help SMBs with their tech requirements. So, yeah. And we'll come on to see in our next slide where that revenue makeup was from.
So this is quite interesting. Here we had revenue sources split, and pretty much 50-50 split between those that were acquiring net new clients and those that were doing business or more business with existing clients.
Yep. And absolutely. So we wanted to kind of assess if that was true for you guys. So let me launch a poll for you. And what we're asking here is, what is your new revenue last year mostly from short-term project work, new MRR, net new clients, or an equal balance of both?
So I'm going to launch that now and would love to hear what you guys have to say.
And interestingly, that small sliver there of 2% that's creeping in, first year that we've done the survey. So we don't have stats on that from the past, but I know that we're seeing acquisition, those larger MSPs looking to acquire smaller MSPs, perhaps, as they grow. So it'll be interesting to see how that percentage increases over time.
OK, yep. And right now we still have answers coming in. About 55% of you on the line have participated. So feel free to respond if you haven't already.
OK, I'm going to end the poll and share the results with you all. So as you can see on your screen right now, we have 47% leading, saying it's about an equal balance of both for them Dave. 21%, so that is less than what we're seeing from our respondents in terms of net new clients, right? And then 32% of those on the line are saying that it was more so short-term project work.
Yeah. Still quite split there, the same as the survey showed us, I guess. So a lot of people handling those cloud migrations and implementing change for people, those digital transformations through COVID and remote working, I guess. I imagine a very different year for a lot of MSPs, or different couple of years, I guess--
--during the pandemic. And that sort of, I guess, leads us on to looking at the pandemic overall and seeing how the pandemic influenced your investment. So this is specifically talking about sales and marketing investment. Did the pandemic give you the confidence to capitalize on the opportunity and invest more, or because of the world putting their heads down and focusing inwards on their business and trying to reduce unnecessary costs, did you reduce spend?
And here we've seen almost half, 44%, have seen the pandemic as an opportunity to reach out to more SMBs. And perhaps that's almost the half now that have acquired most of their business through '21 from net new logos. And the rest there have either stayed as they were. A good 30% have kept things as they are from the year before.
And others have-- well, a bit of a mix, I guess, started to invest for the first time ever. So some people there have seen an opportunity. And others have actually taken to reduce spend.
So, yeah. Shannon, we've got another poll.
Yes. Sorry, I felt like I could launch that while you were talking since it's so in sync with what we have here on the graph. Did not mean to cut you off by any means. Yeah. We were curious to see what you guys would say about your sales and marketing investments.
It's interesting to say to, looking at the respondents from the survey-- right, Dave? Nobody's halted spend entirely.
Yeah. So I've left the 0% there. So, yeah. No one has halted spend entirely. So that shows-- I guess that's probably very different if we compared this to other industry sectors where I imagine a lot of businesses had to shut down completely.
So there's still that confidence in the MSP space, despite the fact that I imagine a lot of MSPs have still had clients that have furloughed staff and have reduced their MRI in some cases. But no one has actually halted their spend entirely.
Mm, yeah. So what we're seeing from our friends on the line is we have 63% increased budget, decided to invest more. 26% decided to keep the same budget, so a little bit-- it's funny, kind of a lot higher than our respondents for the first item and then lower, slightly lower for the second.
Decrease budget, nobody did. But some, 11% had no budget at all it sounds. And I'd be curious, let us know what you're thinking in the chat. If you had no budget, I guess, where are the investments going instead? And what has been the effect of that for you?
Are you feeling good about that? Or is it like, ugh, I'd really love to be investing more. It's just not possible at this time.
Yeah. And I guess part of what this question didn't actually capture, those that had no budget. So it's interesting there to see that poll, the 30% here the state at the same level. I guess if people didn't have any investment, they've actually stayed at that same level. So that 30% is probably capturing some that haven't been able to invest.
Yeah. Yeah. I could see that. I could see that.
So looking at ROI on investments, who is seeing a return through '21 and therefore looking to spend more? And again, almost a 50-50 split on how the market are positioned there.
We know that investment in sales and marketing is a forward investment. So investing in campaigns now may not necessarily mean that there's a payback until 12 to 18 months time given, of course, it takes time for many of these prospect opportunities to come to fruition. You know what it's like for weeks and months, you've got to keep the conversations going, waiting for contracts to lapse and things like that.
So, yeah. Is this a case of treading water? Is there active versus passive going on here with two groups in the market?
Yeah, absolutely. I think we have kind of-- you I were talking about, is there a case of treading water with active versus passive? And I think ROI on investments was our kind of question for saying, did those that increased their budget reap the rewards here? And if others stood still, did they perhaps fail to capture new growth? Right?
Yeah, definitely. And we sort of hand over to you where we sort of come on to the next section to see the interesting comparison on how that landed versus what people are thinking for this year.
Yeah. Yeah, absolutely. So net-new clients are bringing in more revenue. This was really exciting to see that we have 62% jumping up with net-new clients. And that actually compares to only 50% the year before that saw growth through net-new in 2021. So this is really positive to see.
And a big jump there. Although 2% to 5%, only 3%, but I think there's a big jump in those that are seeing acquisition coming up on their radar more this year than it was last year.
Mhm, absolutely. And so we see that. We see net-new clients. It's really exciting, and it's very positive. But then there's also sort of kind of a pause here to say, all right, but is this growth from these net-new clients long-term? Because while that last slide showed some really exciting growth, I'm a little nervous when I see that over half are finding that their pipeline will not sustain them over six months.
Yeah. There's definitely only fuel there in the fire to keep things going in the short term it seems from the majority, which that may be inextricably linked to sustaining capacity levels, which we come onto.
And so, yeah. Here-- I think it must be the next one, actually. We refer to it there, but actually it must be coming up on the next one.
Yes. Yep, yep. So right now, we have MSPs kind of split. We're bringing in new clients. We want to sustain this long term. Right? So this may mean it's time to ratchet up sales and marketing activities.
But for 2022, 39% of MSPs are feeling their marketing and sales activity is quite robust. Right? They're calling it live and proactive. And as a marketer, I love to hear that.
I think this split can feel actually pretty indicative of a lot of business sectors where roughly 40% are proactive in their marketing, another 30% is kind of doing what needs to be done, and the other 22% to maybe 31% are really reactive, and marketing is kind of an afterthought at the bottom of the list.
And so we found that when technology partners aren't marketing it's often because they're unsure of where to start or how to best communicate and engage on certain channels. So we felt like if this applies to you, I'd love to launch another poll where you could let me know what channels are that you're not feeling confident in starting.
And I think we tried to make this multiple choice. So select maybe your top three. I'm going to launch that right now. We have direct mail, email, outbound calling, social media, digital advertising, and video marketing as our options.
Maybe if there's something we should consider in the future if we make this another follow-up question in our survey for 2023, feel free in the chat to let me know.
A bit of a minefield of options out there, isn't there?
Everyone feels they should be doing a bit of everything. But yeah, how can you be an expert and know how to do everything? Although we try.
Oh, OK. Oh, actually I sent that message. OK, let me end this poll so I can show the results to you all.
And John Kelly is on the line saying that he would love to try video marketing but has no idea where to start. Some people that I would recommend following, John, are Pete Matheson and Scotty Millar, Millar M-I-L-L-A-R.
They're both out of the UK. I feel like they're both very proactive with video. Scotty will even just kind of do like walking sessions answering questions he receives a lot. That can be something that, depending on how comfortable you are, you just show yourself as a member of your community going about your day-to-day.
And hey, got a question recently from a client that I hear a lot. So let me just put that out to you, educate all of my prospects. And you're answering the question before they've even had a session with you to think for you to answer it right.
There's even actually Marcus Sheridan. We were talking about him I think two weeks ago on our last webinar. Definitely has come out of like that HubSpot inbound marketing methodology. And he has a whole concept that he calls they ask, you answer. So that can often be a great place to think about video content.
Maybe even put-- I have an SEO background, so I go here with this. But put some topics into Google search. And then look there and see on Google, people also ask. Right? Google gives you those questions.
That could be another way to say, you have a seed of a topic that you want to talk about. What are the questions people are asking related to it? Well, you could actually use Google search to maybe get some inspiration there? OK.
Builds that confidence, doesn't it? If you've got that personality in the video, people feel like they know you before they engage with you.
And it makes our sales process so much easier if they sort of know you and they know your brand before they engage.
Yeah, absolutely. OK. And then 33% were feeling the same way that you do, John, in terms of video marketing is a little mystifying. I'm seeing other tops here, or the primary tops are email, 56%, social media, 50%, digital advertising, 50%.
So email, I definitely think inboxes are quite cluttered. That can be hard to break through and get a response. It's really a consistency thing and I think getting even sometimes creative in your subject lines. Right?
And sometimes I follow other marketing resources. And I look at their subject lines. It's a good idea to even keep a folder that I call like a swipe file so any time you see an email that actually grabbed your attention, guys, put that into a folder so that you can maybe learn some lessons from that to employ something similar to get that open. Right? Because that's half the battle.
Scary or sexy is what I always say for this.
There's got to be fair, or it's got to be attractive enough to make people click on it. It's got to jump out from everything else that's mundane in the inbox.
Yeah. And emojis are helpful too. As silly as that sounds, I do think that they help you stand out in an inbox.
Social media, not surprised to hear this. Guys, feel free to let me know any other social media topics you're thinking about. But also specifically related to LinkedIn, I would love to do a LinkedIn April where we have a bunch of experts come in and just talk specifically about LinkedIn over the coming months because I think that is something that is hard for a lot of you.
And then digital advertising, oof, this can be a beast. Right?
It's so varied. Maybe we should have broken this up more, Dave. Right? But PPC, display ads-- unlike social media, which I think you can DIY in some cases, I think that this is really good where you should work with some experts in the field on that. Hire a really good agency.
But more so educate yourself on what are the metrics to look. You're going to have those weekly or monthly meetings with a digital advertising agency, and you need to know-- the biggest thing is knowing how to hold them accountable. Right?
So I would definitely do a little research there. There's plenty of articles in terms of KPIs and metrics for different advertising methods. And make sure those so that when you are qualifying an agency, you can understand. They give you a case study or the like, you know it's actually like a good return.
And then somebody said, I would love to hear more about LinkedIn in the future. Seems a hard one to broach. Yes. Absolutely. Anthony, I would love to bring more content to you in that regard.
So let me know what it is about LinkedIn if it's prospecting, building lists. I'm starting to dip my toe into LinkedIn Sales Navigator myself. Or is it how we cadence of messages and follow up with people? So maybe let me know what you're looking to see a little bit more in there, because I think we'll do a few different sessions.
OK. And then moving on, so we have-- a majority are feeling-- oh, I'm sorry. We still have--
Sorry. I'm catching my touchpad on my finger, and it's jumping around.
Hitting a snag. So, yeah. We have a majority here who are confident in growth, despite some unease in different marketing channels.
So in talking about growth for 2022, we've addressed where revenue is coming from, pipeline health, and marketing and sales activities. So when we bring these things all together, I would say that MSPs are optimistic. You can see that confidence scale there. We have those that are responding either five or four, that's 73% who feel confident in their growth for 2021.
But of course, no business is without challenges. So I'm going to turn it over to Dave to further discuss some challenge, sort of iffy areas that we saw in the survey.
Yeah. So this is where I prematurely referenced the resources there. And maybe that limitation of the pipeline and how busy people would be is sort of reflected in resources.
So here we're seeing that capacity limits are strained, nearly 75% being at or over capacity. My consideration there is that indictment of current recruitment challenges, perhaps, that the industry are facing. Is it just a short-term blip because you're really busy with project work right now?
Everything's happened at once. All of your clients need the same thing at the same time. So is that just short-term? Or perhaps that's project work that will dry up. And then you're going to have gaps in your resources to sell on that time, identify new work.
Yeah, absolutely. And so we were saying that we-- oh, sorry. Could you go back, Dave? I think this is the right space. We have another poll for everyone in terms of capacity.
So when we were talking about this, Dave, in our prep sessions, we were saying that we think that some of this could be related to recruiting during this time as well. Right? So we wanted to hear from you guys how you feel like recruitment is going for you right now.
Right here, sorry. OK. Yeah. We just think that staffing can be a huge concern for these capacity limits. So if you guys would like to feedback on how you feel like you're staffed, if the talent shortage is affecting you, and how concerned you are. This is kind of a concern scale.
OK. And previously, we've had about 50% of those on the line-- oh, we've got a few more. There we go. I was just about to say, don't be shy. We had dropped down to 40% with responding. And I was like, oh, you guys were staying strong at like a consistent 56% responding. So let's make sure we keep that going.
OK, let me share these results with you guys. So some are saying no concerns. The business is adequately staffed. 13% are fairly concerned. We have a whopping somewhat concerned. We're hiring for key roles during a talent shortage.
And the reason I underline that is because I think that that can be the most stressful of all. Right? Like three months out, maybe not so worried. Once you start to get a month and a half, two months into your recruitment process and you still can't find somebody for that key role, you get to a point where you very much understand that could inhibit your growth. Right? So we did want to explore that with you guys.
And relief seems to be in sight for some, but not all. So 46% are saying that they will still have their resources constrained in the long term. Now is that those that have the six-plus months pipeline, so they know they'll be busy? So they've got confidence that we'll be at capacity rather than stretched maybe. Perhaps they've planned for it.
But actually, the majority there, 54%, will see gaps in their schedule to fill with work in the medium to long term. And I think that reflects those with the lack of a pipeline to keep fueling their business beyond a six-month period.
And in terms of thinking about challenges in this section, we asked here, what could keep you from achieving your goals? And a bit of a loaded question. We forced people into an answer here.
Even if they said, oh, we don't have any of those--
--they to think about what could be the number one challenge that could actually stop them from achieving their goal. And it's a bit split. So here, quite a close 39% to 35%, 39% saying that time and resources for finding and winning new business actually was their number one challenge, closely followed by capacity.
So there we can see that capacity and recruitment perhaps is still coming up as an issue, followed with a much lower number by the strategy and having a budget for growth.
Yeah. Absolutely. So we wanted to hear from you guys where you're feeling most constrained in your business, if it's sales, marketing, client services, et cetera.
Great. They're filing in. Just a few more responses, and I think we'll be looking good.
This is an interesting one, because you will always have challenges, won't you, at some point.
Exactly. Exactly. So right now, 31% feeling constrained most around marketing and then tied between sales and leadership strategy, Dave.
That's interesting, because that's very different to-- yeah, a much smaller 13% with strategy from the survey.
Mhm. Yeah, absolutely. Yeah, that's interesting. OK. So now, speaking of strategy, we're going to get into some strategy considerations. Oh, sorry. I lost my place in here.
OK. So for any growth, we need to have defined targets, defined growth. Here's where I kind of like to break out our glasses like we're at am optometry exam. How defined are our goals? Are they a little fuzzy?
Here you can see 49% have formalized goals, which is great. But unfortunately, that leaves another 51% a little bit nearsighted when it comes to the view down the road. So again, we're going to throw it to you guys, what are you thinking about for your goals?
And we have actually, instead of this being a one for one question, we've actually asked what types of goals that you've set kind of in, essentially, level of aggressiveness. So I'm going to launch that poll for you guys right now.
And are you being more modest and reserved? Are you kind of doing steady, incremental growth, like there's a plan and I know what needs to be done? Or am I getting very aggressive, like shoot for the moon, land amongst the stars goals?
OK. And Dave, I know you can't see this right now until I end the poll. But early indicators are looking like 75% are working on their incremental growth goals.
Ooh, OK. We've had a shift. 30% are being pretty aggressive, which is great to hear. I'm going to end the poll and share these results with you guys.
Would that be typical of the MSPs that you work with sometimes Dave? Do you feel like it's aggressive or it's more incremental?
Yeah. A bit of a mixture, I think. Some people have got an ambitious target. And perhaps they've yet to work on the strategy of how they're going to get there, but they've set an ambitious target. And I'm sure we'll come onto that.
But most, I would say, I probably agree with the 64% there, with incremental growth goals. I think most MSPs owner managers are probably considered reserved people, that they want to have some growth. They want to plan for it.
But they don't want to be too extravagant. They don't want to set a target that they're not going to reach. So we'll take a considered, steady approach. And I think that's reflected in the numbers.
Yeah, realistic. Absolutely. Yeah. And yes, perfect lead-in to our next topic of structuring our targets. Right?
So without structure to our targets, how can we ensure that we're going to achieve these goals? So if things are fuzzy for you. I want you to listen to the next part, because Dave has a background advising MSPs on their sales targets long before Wingman.
And so Dave, I know you have a very simple mathematical strategy. It all comes down to it all comes down to numbers with sales of how we can work them backwards to where their goals need to be or their targets need to be to hit those goals long-term.
Yeah, definitely. I think most people are confused where to start with targets. And I always advise to start by looking at your own business.
Most people out there think, oh, our sweet spot, our ideal customer is maybe 40, 50, 60 seats. But actually, is that indicative of the average customer size that you have within your business? Possibly not. Maybe some would be lucky. But that may not then be reflective of the market at large.
So look across your clients. Think about the average sweet spot. And drill down into looking at a per-seat. Because I guess everyone, the vast majority of the MSP space, runs everything on per-seat pricing.
So let's try and work out the value of a seat and then compare that to a revenue target that you have in mind. That then gives you an indication as to how many seats you need to add. And then obviously, if that's, say, 100 seats, is that going to be 10-man businesses? Are you going to need 10 10-man companies to fulfill that? Or will it be two 50-seat companies?
And then because of those numbers, you then understand how many seats you need. And it shapes how many businesses you go after. When you factor in your conversion rate, so if you look across the existing deals that you've had, have you won one in two, one in three, one in four?
And always bear in mind that cold, net-new business that you're going out and chasing, the conversion rate will be lower compared to referral business that most MSPs have been reliant on in the past where you might win one in one or one in two, perhaps, deals versus maybe one in three, one in four if you're chasing net-new.
So thinking through those numbers of, say it's a 1,000 per seat per annum and--
--you want to add 100 grand this year, all of those numbers then help you think about not just a revenue target that you then can't quantify. But actually, you've got a seat target against that. And then when you map that to the audience that you're chasing after, how many customers you need to add.
And if you've got your conversion rate, you know how many of those you need to add. So all of the numbers then start to come together, if that makes sense.
Oh, no. It makes perfect sense. Absolutely. I think that that was a great way to put it. So you may have a revenue target, but you have to break that down into per-seat. Right?
Because those seats are in businesses of a certain size. And you need to know what your target is for how many conversations you're having to then, what does that filter down to your conversion rate? If you're converting 30% of them, then you need to be having conversations with three times the amount of companies that you need to bring in at that seat level. So I think that that's a really simple way to think about that and to quantify that.
OK. And so then we get into, again, we want to achieve this target. So are we going to grow sales and marketing investments as a method for potentially achieving that.
If you think back to prior in our survey, we had mentioned to you that 44% had increased their budgets during the pandemic. Again, that's a little fuzzy, because it started in 2020, went through 2021. But then now, last year, in 2021, we had 53% and-- sorry 44%. And then now we have 53% in 2022.
So charting that, that gets interesting. But honestly, even though we-- looks like we dropped about four percentage points year over year. I've gone back and looked at all of the years and combined some of that increase with same level. And that actually takes us from about 70.4% doing that during the pandemic, 80% doing that last year, and now 82% who are staying the course by either making the same level investment or increase. So we do have a nice incline there. And I think that the digital transformation is happening. But it hasn't stopped. And so there's so much opportunity there for MSPs.
And as we kind of wrap this up on the strategy side, I think-- what does this all mean? Remember we saw 63% saying that their new business will be from net new. But we only have 43% that expect their current pipeline to sustain beyond six months. Six months, guys, that's mid-September. For me, that feels right around the corner.
So I think we want to say, if we feel like we can confidently meet these expectations for growth, that confidence needs to be met with action. And I'm glad to say that 82% of the MSP community is taking this to heart. So that's really, really positive.
Yeah, definitely. And in terms of wrapping up, I know we've thrown a lot of information at you. There's a lot of data, a lot of insight here. And we will be producing a report. So everyone that wants a copy of that will get a copy. Those people that already said they want a copy that participated in the survey will be sent those first. And we'll be producing those over the next two or three weeks to go out to everyone.
So what can we take away? I think we can see that with the investment that you just mentioned, Shannon, I think competition is intensifying. I think MSPs are stepping up. The majority there have said they want business from net new. That means more aggressive sales and marketing investment to capture market share. Creeping up only a little bit, but acquisitions are creeping in there as well. So I think the competition in the marketplace will split those from the do-nothing that are very passive and sit there and don't do anything, to those that actually go out and start chasing new business. And I think we'll see that over the next year or two more than we ever have in The MSP space before.
Growth demands forward investment. So you recapped there on six months for the majority are saying that they've got business in their pipelines. But you need to keep investing beyond that. And I think we've seen with those that have increased investment in the past couple of years are starting to see that payoff. But of course, it takes months of work in advance of getting those leads through and closing that new business.
And as most have said, that new business is likely to come from adding net new logos to your client portfolio. More opportunity exists outside of the current client base that perhaps the majority have been reliant on-- just, I guess, that 50-50% split for the past couple of years. Those client projects, the increase in client seats-- that probably won't continue into the future. So looking for those net new logos is really important.
Yeah, absolutely. And I think the big reminder here is that there's always going to be challenges to growth, and especially for concerted business owner who's constantly reassessing effectiveness. So when we were going through these results, Dave and I were just like, it's just a bottleneck. There's always a bottleneck somewhere. And it's just figuring out where it is.
So is it marketing activities, sales, and building a pipeline? If not, is your pipeline healthy, but maybe you don't have the capacity to meet demands? Or maybe you're really busy right now, and you need to start assessing contracts and setting those QVR meetings and getting commitments beyond six months from now. And if the contracts are in place. Are services going well, and you're exceeding client expectations?
And then the cycle loop starts again. And then once it restarts, we're going to start more sales and marketing and try to move upstream with bigger clients. It's always going on. It's always a process. And I think--
Never gets boring, does it?
It never gets boring. And you own a business. I own a business. I think it's that constant-- we have respect for our fellow business owners to be like, it's nerve wracking. But you're a courageous person for constantly keeping at it. And thank you for joining us, so that you make sure you're getting the best data with which to develop a strategy as well. I hope these benchmarks have been helpful to you.
Definitely. And I think both of us have got some resources that we'd like to share with you guys.
Yes. I am putting them in the chat. They're kind of looking like gobbledygook right now. But we will also send them in our follow-up email. Everybody always asks if they're getting a recording. You will be getting a recording. And we will either make sure that gets into the recording email, or my team will send you all of these resources.
And what we are-- oh, sorry. There's random notes there too. What we are sending to you is we have a pipeline e-book. You can find it on the e-books page. Or it's ungated right off the Zomentum navigation, honestly. Really comprehensive, multi-chapter, if you're building out your pipeline, your team, all of those things.
We also have a great checklist so that you can kind of run through some questions and assess yourself to say, is my pipeline strong? And then, Dave, I'll let you take them through the resources that they can get from you.
Yeah. Something we put together that I see-- so often MSPs are not sure how to get the most out of meeting with a new prospect. What do I ask? What information do I gather? In what format do I gather it? So you can really tailor a proposal and stand out from other MSPs.
We've got a cheat sheet. It's a Microsoft Word version. So feel free to edit that and print it out and take it with you if you're going face to face. Or have it on screen and type those notes straight in if you're meeting online. It's a great way of keeping people structured, because we know what it's like. You meet with a prospect, and the conversation goes in a million different directions. But that can bring it back to some structure and order.
So beyond just talking about the number of PCs, number of servers and those things, you actually get under the skin of the business to explore their workflow, their challenges and processes, so you can help them with a broader, higher level conversation of tech. So grab that from our website, wearewingman.co.uk/cheatsheet, and download that Word version.
And for anyone that wants to find out a bit more about us, we've got, annoyingly, two websites for-- in pound sterling for anyone in the UK and in US dollars, anyone in the US. I think we probably need to merge the two. But we've kept them as separate websites there.
Yeah. Again, it's always a process. It's on your to-do list [LAUGHS] from the marketing perspective.
Weirdly, in terms of SEO-- yeah, we've had those challenges. Do we have two? Do we have one website for different markets? Since we've had two, our .co.uk ranks better in the US than our .com. So go figure.
Oh, we might need to talk about that. [LAUGHS] I have an SEO background for anyone who doesn't know. I will say-- so that's it from us, guys. I'm happy we have six minutes. I'm happy to hang out on the line if anybody has any questions they would like to ask. You do have two marketing and sales experts here if there's some things that you want to talk about.
But otherwise, I think that's it from us. Oh. Thank you, Karen. Thanks for joining us. I appreciate it. John Cowley was asking, does PPC work for the IT industry?
I would say I have experience running PPC ads, but more on the vendor side. Dave, that's not something you usually step into, is it?
Yeah. We do a bit. I think I find PPC can be a race to the-- well, race to the bottom, race to the top in terms of how much you're prepared to spend per click. Yeah. Especially in some key city locations, really, really expensive per click.
So I think having a focus, a unique sort of niche that you can aim your message towards-- like here in the UK, we've got some guys that are working on a Cyber Essentials. The UK government have this Cyber Essentials Program and some people that provide certifications for that.
So it's a commoditized product. It's a one-off, fixed fee that people go on. It's DIY. Sign up online, put your credit card in, done. It's more transactional rather than the MSP conversation, of course, is far more personal. It's far more involved than that.
So I think if you've got anything in your stack that you can commoditize and offer even a cybersecurity bundle-- not many people are actually putting a price per seat per month for a stack of clear cybersecurity services. Maybe that you'd be prepared to sell without an IT support contract. If people are looking for those specific things-- even VoIP. Many MSPs are reselling VoIP. A commoditized product that people can understand, that has a key price point-- PPC, online advertising works in those settings, because people understand it. The static ad is something that they can understand.
But the broader MSP conversation is really, really tough through online ads and PPC.
That's an important point. And I think what I would say just to piggyback off of what Dave said there is that utilizing those key words around where there's interest. They know the product that they need. They might already be using it, but they're comparing price points, which can be the drawback.
But if you have optimized your pricing in such and the flow that-- like he said, it could be self-service. And you're gaining clients just through that, I think that that could be great. And also keeping that focus. I'm not saying, John, that you shouldn't try PPC just because I don't know conclusively if it works for the IT industry. I would say give it a shot. And like Dave said, maintain your focus.
You just don't want to be wasting money there. It's very easy to do. That's how Google has become so wealthy. They were not necessarily for years in the business of helping people to optimize those ads. Let's just put it that way.
So you want to be very refined and focused in the keywords that you use. Location will help. And even utilizing what we call sometimes long tail keywords, where people are putting some questions in. Like, how do I do x, y, z? That's not a short, pithy keyword focus. But those longer tails are usually rarer, and therefore, could be less expensive for you. That's something else that you could utilize. It's like, what are those FAQs that I could build an LP for and address?
So I hope that--
Even thinking Bing, actually-- Bing is probably about half as much in terms of cost as Google. So I know we always talk about Google, and that's always the default. But strangely, of course, maybe less tech savvy buyers will be using Bing. Because it's the default search engine that they've got on their PC. So yeah, that can be something worth exploring.
No, that's a good point. My husband worked for an agency, automotive specific. But for years and years, and managed their PPC campaigns. And yes, you had to have a Bing strategy as well. Traditionally, always less expensive. And you can even dabble in some other forums as well that you wouldn't expect.
I think it was some of the different maps, like Waze, and some of those apps actually offer some sort of PPC or keyword-oriented ads. So that if somebody's searching for something on maps, that you come up as an ad along their route. I know it sounds silly, because your MSP office is probably not a destination. But might be something to just experiment with.
OK. I don't have any-- let's see. I think we answered that one already from John. OK, so-- oh no, sorry. John used the Q&A area to write us back. I apologize. He said, thank you. That is very helpful. Do you have the URL for the cheat sheet? I'm on the Wingman website, but I can't see it.
I'll just put that there. I think it's kind of hidden.
OK, can you put it in the chat too?
Oh, yeah. Sure.
Just for everybody.
The main chat. So yeah, if you want to grab that Word version, have a play around with that. It's probably not perfect. But that's the basis of what I relied upon when I was sort of working in sales and marketing in my MSP days. I would always take a sheet like that out to meet prospects, and would help keep me focused.
It's hard. Sometimes you don't want to be so hard-nosed. You want to have a nice conversation with them, get to know them. And then it's like, you have to make that shift. Oh, I need to ask these qualifying questions. So I think it helps keep you on task.
Trying to get them to open up and start talking. And the more they chat, and the less you have to say, that's the best way to sell.
Yeah, absolutely. Yeah, John got that link. He said, perfect. Thank you. OK. All right, well, there's 22 brave souls still on the line listening to us chatter. It's 12:30. So if you have any other Q&A, get them in now. If not, I think we will say adieu.
I think maybe, Dave, we've come up with another idea here too where maybe we just have a marketing therapy for MSPs where we just-- two of us and maybe one other just sit on the line and answer questions about PPC or social or any--
Yeah. Yeah, we always pick the topics. But yeah, maybe kind of challenge us by throwing something at us and see what we come up with.
Exactly. Well, we know the general rules for success. It's like, if you know how to be a good writer, you know the grammar. But you then have to improvise beyond then to create a very nice work. And I would say the same is true of marketing campaigns.
Oh, Giles wrote us. He said, I'm surprised in the poll results. With so many still using email, would you not advise migrating over to social selling and adoption of Sales Navigator? Well, I definitely would advise social selling regardless. I would not say that I have a deep experience in Social Navigator to advise on that. And that's something that I'm working on, actually, where I'm utilizing Sales Navigator more.
I think it's a good combo, isn't it, to have. I think if you've got-- for me, it's all about audience. Most MSPs say, oh, we deal with anyone and everyone. We deal with any business, because it's just IT, and it's very vanilla.
But I think if you can pick a specific industry niche to focus on, and then you're all over that sector. You know what makes them tick. You're in with the industry associations, any bodies that operate within that market. You can then tailor content to be relevant to their business operational needs. And then getting that content out through social selling by having connections on LinkedIn, using Sales Navigator to find those people, sending them LinkedIn messages-- but also email is still remarkably powerful.
And if you've got a well-curated list of people, and you're sending them relevant educational messages, that's how you'll keep them, and they won't unsubscribe. It's when people try to sell, sell, sell through email, I think that it gets really boring.
Yeah, exactly. So embracing that traditional content marketing approach through email. What I advise my content marketers, any company I've worked with, is that I need to get value from opening your email. And I should actually-- especially for content marketing, I should learn something even if I don't click through.
That's another tactic too with content marketing. A lot of times they're like, blah, blah. OK, and then click through. I just tried to sell you on the resource, and now I want to drive you to my site. And that's kind of selfish. Content marketing was actually created to be a little bit more altruistic and educate your audience.
So they open the email. You had the perfect opportunity to educate them. And then you got selfish and tried to drive them to your site. So what you actually-- I always coach is that you should summarize parts of the content and put that in the email so that I as the reader learn something interesting and walk away smarter having read it, even if I don't click through. You might think that, oh, your click-throughs will drop. I'll tell you it's probably pretty negligible.
The other thing with social selling I think, Giles, to consider that-- and feel free to advise if you have some points you want to share. But I have heard a good point from one of the consultants I was talking to that said, sometimes for IT professionals the person that they're looking for at a company, like the head of IT or whatnot, might not be super active on LinkedIn. And so that can be hard.
Because a lot of times with traditional social selling, you want to like their posts, comment on their posts, things like that. And if they're not actually very active there sharing content and interacting, it can be hard to do that.
And I say that because I was going to suggest with Sales Navigator a feature I have been really liking about it is that I have created some lists. And it's been easier for me to keep up to date with what people I'm interested in are sharing. Meaning that when I have followed them on LinkedIn, for whatever reason, the LinkedIn algorithm is not understanding when I followed them that I want to see their content shares. I still don't see them. So I--
The best thing actually-- have you seen the newsletters that they released recently? I think it's sort of like blog content, but within LinkedIn. So you can actually follow their sort of LinkedIn newsletter. And then you actually get notified when they've posted new content. So I think that's kind of-- yeah, almost like having a blog but within LinkedIn and keeping followers up to date. So I think that's–
Yeah, so that's a good point. If you have a decent amount of followers and people you want to keep interacting with, guys, use the LinkedIn function for posting blogs. And then, yes, they have added a newsletter function to it. There's a few that I follow. The person then sent me an invite. I follow it. It goes directly to my inbox now. So that can be the other issue.
If these guys aren't on LinkedIn on a consistent basis, that might be-- it's a great professional network, but how do we get to interact with them regularly? Sometimes you have to utilize the inbox and LinkedIn in combo. That's a good point, Dave. Dave, I think you are frozen on me.
OK. And then-- oh. Giles was mentioning that he feels that segmentation improves target focus and increases in relevancy. But building trust with the targets. And that's all done through a personal connection.
Sorry, I totally-- either I died, or I lost you. You froze up. So I don't know what happened.
You froze on me too. I don't know. I'll launch a poll. Who actually froze?
Just kidding. So I was talking more about LinkedIn, and then you froze. And Giles was responding to us as well in the chat. But if they're not active on SM-- I'm not sure that I know what you mean by SM. Maybe you meant SN, Sales Navigator? Then it's a bit of closed door. And it would be easier to target if they're active. Just my thoughts, he said.
Yes, I think if they are active, and you as the individual are on sales-- oh, social media, he meant. Then, yes, there's-- I would say you're not going to find any opposing thought from us there. If they are active on social media, you should be active on social media as well. And I think it's just scheduling in the time. Can it be something that you do Monday mornings? Set time.
Or every morning drinking your coffee, do you go through your LinkedIn feed or your Facebook, interact with them, like, comment, share. I think especially being community-oriented for a lot of MSPs, showing that you are supporting those local businesses, is really important.
So I think with that, right-- Truman, you said, it's a great event. And I think we should wrap it up at this point. It's 12:37. Thank you for those of you that were patient with us with our technical difficulties. I really appreciate that. We haven't had something like that happen before. So we were all just working through it.
And yeah. I hope the rest of you have a great week and a great weekend. Thank you again.
Thanks very much.
Thanks, Dave. I'll talk to you soon. Bye.