Marketing is the lifeblood of any business and truth be told you cannot exist without encountering it as a Managed Service(s) Provider (MSP). The MSP industry is a goldmine attracting savvy high-value clients with long-term solutions worth $1000 or higher.

A proactive and motivated steering team, rapid response time and the ability to build powerful long-term relationships with your prospects and clients will ensure you grow a booming business.

Even though budgeting for your marketing initiatives can seem daunting, it’s not difficult. Let’s review what budgeting entails and the metrics to consider.


How much does MSP Spend on Marketing and PR?

Do you have a fixed marketing budget? An exact figure based on mapped out clear systems, on how and where every allocation will be made. Does the budget cover your monthly, quarterly or yearly expenses? You should roll out a budget entirely dedicated to funding your digital marketing efforts.

Most companies lack a defined MSP marketing budget. They instead opt to splurge on poorly planned marketing initiatives. No wonder they are distressed when they don’t get any tangible results. Kind of like dieting for a week hoping you’ll lose 30 pounds.


What is the Value of your Clients?

What is your average CRM (Customer Relationship Management)? Do your clients stick with your company for 3, 6 or 9 years? What is the monthly revenue generated by each client? You need this crucial information to calculate your Customer Lifetime Value.

For example, if your average retainer is $3000/month, and your average client stays with you for three years, then your Customer Lifetime Value is $108,000. Not a shabby figure.

Consider how long it takes to close a new client. How many leads does your MSP sales team have to close to acquire a client? Now you have a baseline to structure your budget. Your value per lead will influence your lead generation efforts.

How does profit per lead compare to your marketing efforts? You want to reap the maximum benefits from your ROI and also make smart business decisions. Get value for your money.


How Much to Spend Marketing your MSP

According to the U.S Small Business Association regulations on marketing, if you own a company with a turnover of $5M per year or less, you need to proportion 7 to 8 percent of your gross revenue to marketing.

A few pointers that will help you effectively figure out on how much to spend marketing your MSP include:

Consider the growth phase of your MSP

The budget limit varies with business margins. Wide margins attract more marketing budgets — also, the threshold changes with the growth stage of your business. Companies operating in maintenance mode need to set aside 2 to 4 percent of their gross revenue on MSP marketing operations.

Firms in heavy growth mode face a steep rise in costs. These companies churn out 10 to 20 percent of their total revenue towards boosting their marketing efforts.

Are you a new entry into the MSP industry?

According to Entrepreneur, start-ups which are 1 to 5 years old should invest 12-20 percent in their marketing strategy. This is primarily for those businesses that enjoy investor funding.

The rationale is that start-ups need to dig deeper into their pockets to source for clients, build brand equity and establish their footprint in the industry space.

Are you an established managed services provider?

Established companies with rock-solid market share and brand equity thrive by investing 6 to 12 percent of their gross revenue to marketing. But, they are free to allocate more of their income to their marketing campaigns if they want to boost their expansion or gain greater brand equity. Your MSP partnership with marketing budget can skyrocket to 20 percent of your gross revenue unless you are basking in regional monopoly.

Key marketing tips for established companies include:

  • Marketing budgets are essentially infrastructural.
  • Invest more in marketing at the early stages and slack off a bit once you hit a “cruising altitude.”
  • Cap budgeting spread to 5 to 10 percent.
  • Keep in mind, to reap the best ROI for your marketing efforts; you need to consider where you invest your money. The most successful marketing campaigns are those that integrate multiple marketing channels. Top-of-mind MSP providers engage and inform their prospects.


Owned Media in MSP Marketing Budget

Owned media is the building block of any online marketing campaign. Owned media includes your website, blog and other informational resources available for download. Your owned media is the USP (unique selling point) of your brand and is crucial if you want your marketing efforts to reap success.

A poorly designed website with low-quality content will dampen your marketing efforts irrespective of your budget. Build a library of valuable content to your audience. Your audience will be willing to exchange their contact information in exchange for your useful resources.


Earned Media in MSP Marketing Budget

Earned media is also known as organic media. It covers whatever revenue you generate based on your outreach efforts across the internet. Earned media relies on the inherent value of your content.

Earned media includes interviews, press release coverage, social media shares, comments and links to your blog. The winning point with earned media is that it focuses on time investment. The more you spend on your marketing efforts, the better the results. Referrals are a goldmine with this approach, this can be done using referral marketing software.


Paid Media in MSP Marketing Budget

Most MSPs stick to leveraging only paid media in their marketing efforts. They believe this is the only approach that boosts your brand’s visibility while growing your revenue. You get to monitor your organic content.

You need to adopt a sound paid media strategy alongside owned and earned media to ensure your brand succeeds. Paid media refers to marketing tactics based on paid advertisements. Paid media includes PPC advertising, display ads and branded content.



Marketing can mean life or death of your MSP business. Set aside a specific budget from your total revenue towards your marketing initiatives. This keeps your business afloat and helps you stay competitive.

Restructure your budget to meet industry demands which are in a constant state of flux. Stay flexible. Monitor your metrics on a continuous basis to ensure you are making smart business decisions. Trim the excess fat.  You need to get the best ROI for your marketing efforts.