Here’s a question I received from the owner of a small MSP about what to spend on marketing:

“As a new MSP, I have a limited marketing budget – $30K for the coming year. In general terms, how should I approach prioritization of that budget to avoid just spending a little on everything?”

What was funny about this question is that he has more money to work with than I did when I started TMT back in 2002, so let me tell you it IS possible to successfully market your MSP and generate leads and new customers even operating on a very tiny budget.

But first, let’s look at some general guidelines based on my 24+ years’ experience in working with MSPs on marketing budgeting and planning.

Key Insight:

Mature, best-in-class MSPs spend roughly 10% to 11% of their topline revenue on sales and marketing combined.

That includes the salaries and compensation of their sales and marketing team, as well as media, printing, their CRM system and all marketing SaaS apps, such as Canva, LinkedIn and Dripify.

Smaller MSPs that are not generating best-in-class profitability tend to spend 3% to 5% of topline on their IT marketing budget and little to nothing on sales reps, sticking with an owner-led sales approach.

Budget Priorities

If I was attempting to grow my MSP on a limited marketing budget, I’d put the majority of the money into two things:

  1. A high-converting, well-designed website
  2. A marketing automation platform (Keap, HubSpot, etc.).

A $30K MSP marketing budget won’t be enough to do the above and hire an agency to run ads and do SEO/GEO – particularly if he’s in a mid-sized market to large market.

Low-Cost Marketing Strategies

  • Referrals: If you have a client or clients, use your relationship to get them to introduce you to other clients.
  • Warm Outreach: Call and e-mail people you have some connection with.
  • Networking Events: Most cost nothing or a small fee.
  • Social Media Outreach: On LinkedIn and Facebook, reach out to prospective clients.

Goal for no less than 45% overall gross margin on all services sold and you’ll quickly be able to invest more into marketing and sales, making it easier for you to grow.