Every MSP marketing strategy starts with one question: who should your customer be? Every decision you make after that, from what you name your company to the people you hire, rises and falls on the answer. Yet most MSPs have no high-resolution definition of their sweet-spot customer, no idea how many exist in their chosen segments, and no plan for how to speak to them. Demographics are the starting point. The real value is in psychographics: what they believe, what they read, who they trust, and what they think is true about their own industry.
WHO should my customer be?
Every decision you make, from what you name your company to the people you hire, rises and falls on the answer to that question.
Yet most MSPs still don’t have a high-resolution definition of who their ideal, sweet-spot customer is, how many of them are in their chosen demographic segments, if they’ve even identified that yet, OR how to communicate with them in such a way that makes selling easy, or at least easier.
Why Nobody Teaches This
Candidly, not much is published on this topic.
I have over 500 books and programs on marketing in my office alone, not to mention the library downstairs, yet those tomes contain very little on how to select and research a target market.
It’s actually kind of astonishing to me, given that selecting who you want as a customer is THE starting point of any business, product, service or marketing campaign.
Part of this, I think, is because the work that goes into selecting and researching a good target market is tedious and nonscientific. You could do a lot of work researching a particular market segment, only to find out it’s not lucrative or matched for you.
There is also no “one” perfect market, because a market can’t be “perfect” until we identify what the product or service is that we’re trying to sell. And if we’re doing marketing the right way, we need to identify a market with a need FIRST before really designing a solution to fill the need. A bit of a chicken-and-egg situation.
Furthermore, defining that target market, understanding it and building it requires long-term commitment with no short-term payoff.
People lose interest quickly.
It Took Me A Year To Decide
When I started my business back in 2001, I took nearly a year to decide upon MSPs, then VARs, as my target audience.
I chose small IT shops because I was small. I stuck with US-based firms because that provided me plenty of blue ocean to work with without having the added complexity of language, culture and time zone differences. I also had a very good, very strong JV partner in CompTIA that launched me and my services to this industry, and I was having a lot of success in working with the handful of VAR clients I had secured.
ALL of this combined made my decision relatively easy.
But once that decision was made, I was very, very far from done.
The year 2002 was a big one for learning the industry. Although I didn’t have a lot of money, I made certain I went to a number of industry events as an attendee so I could talk to people, both the MSP owners and the vendors, to understand the nuances of the industry.
The biggest learning curve for me was, by far, understanding the mountain of technical jargon and acronyms this industry LOVES.
The Lesson I Got The Hard Way
At one industry event, System Builder Summit, I was standing having drinks at the end of the day with a group of people I had casually met that day.
In conversation, I made the “fatal” mistake of labeling one of the guys a VAR.
He promptly and harshly chastised me, saying, “If you ever want to make it in THIS industry, you better understand the difference between a VAR and a system builder. I am NOT a VAR, but a system builder.”
Rude? Yes. Socially inappropriate? Of course. But it’s a lesson I value and will never forget.
If you truly want to dominate a market and outsell and outperform your competition, you have to KNOW how that market speaks and thinks. You have to understand the trends happening, who the key players are, what everyone is talking about “now” and who they HATE. A common enemy is one of the most powerful assets in persuading a group of people to your side.
You also have to understand the language, how they market and sell their services, how they get paid and, of course, what THEY believe to be true about their business and the industry as a whole.
One slip of the tongue or mistake in a statement will instantly reveal you’re “not one of them” and cause them to dismiss everything else you’re saying.
Two Ways This Goes Wrong
Every once in a while I get a speaker who decides they want to research my audience so they can speak directly to them and demonstrate their interest. VERY often they miss the mark and only reveal how unbelievably ignorant they are, as well as alienate the audience.
One speaker kept referring to the attendees at my event as “software guys” and “geeks,” thinking he was aligning with them. It was SERIOUSLY uncomfortable in the room as people sat and smirked at every word he was saying.
Several years ago, a competitor posted an ad on Facebook, promising to “flood your MSP with thousands of leads.”
I laughed the minute I saw it.
It was a gross miss on messaging that instantly revealed he has no understanding of his target audience, small MSPs. The comments were hilarious as many of the MSPs commented they wouldn’t even know what to DO with 100 leads, let alone 1,000. Many posted they would be happy with five to 10 more per month.
Again, this is a simple, seemingly innocent mistake, but it can create a massive rift between you and your audience, causing them to think you’re a fraud.
And One Way It Goes Very Right
On a positive note, one MSP I worked with took my idea about working with cyber insurance agents to secure more business.
He discovered that all of his BEST clients had, or were interested in, buying cyber liability and ransomware insurance. This resulted in him getting over a dozen great clients, with more in the pipeline.
It is obvious why this works when you think about it. Any CEO willing to purchase cyber liability or ransomware insurance clearly believes the chances of a breach or cyber incident happening are high AND they are willing to spend money to prepare and mitigate the risk.
BOTH are psychographic signals this person would also spend a good amount of money on managed services, backup and cyberprotection.
Yet how many people would be, first, willing to notice this commonality among their best customers, and second, actually DO something with this information?
The WHO Is Probably Already In Your Business
All three of these scenarios are simple examples of why it’s so critical to deeply understand your target audience.
The WHO is very, very important for planning, marketing, hiring, pricing, strategy and your sales process.
Often, the right WHO profile already exists in your business, but you’re not paying any attention to it. Or maybe you know but you’re not acting on it.
I discovered that my best customers share common core values such as hard work, self-sacrifice and providing value, and are VERY opposed to victim mentality and thinking. They have “honest ambition” and are avid learners and readers. If American, they are very patriotic and pro-family, sharing what many would think are “old-fashioned” values.
When I write, I write for them, often “poking the bear” of those who do not share the same viewpoints and core values. In doing so, I aggravate and alienate some but draw my core CHOSEN market closer to me.
The prospects and clients who storm off in a huff are ALWAYS the low-value ones who are a giant PITA.
Demographics Get You Started. Psychographics Win.
YOU need to figure out your WHO as well.
Demographics are a good starting point. Size of company, number of employees, geographic location, industry and SIC codes, years in business.
But the real juice will come from the psychographics. What they believe, core values, what they buy, what they read, who they pay attention to and their stance on critical industry issues as well as business overall.
That is the difference between a list you can mail and a market you can dominate.
Why This Decision Determines Your Ceiling
Here is what is at stake, using the shape of our own industry.
| Tier | Share of MSPs | Revenue |
|---|---|---|
| Never break $1 million, even after decades | ~80% | under $1M |
| Do well, often stuck at $3M to $4M | ~15% | $1M+ |
| Very successful | ~4% | $10M+ |
| “Super MSPs” | ~1% | $50M to $100M+, estimated to represent over half of all managed services revenue spend |
The Pareto Principle plays out in every industry: 80% of the production comes from 20% of the companies.
And the single most consistent trait of the bottom 80% is that they have no clarity about their target market and value proposition. They’re the “do anything for a buck” crowd who have not really defined who they want as a customer, or built a plan for dominating that specific segment.
That is the whole argument for doing this work. Not because it is enjoyable, because it isn’t, but because it is the decision that sets your ceiling.
If you want help selecting and researching the right market for your business, and building the strategy around it, that is the work I do in one-on-one consulting.
Frequently Asked Questions
How do I choose a target market for my MSP?
Start with demographics: company size, number of employees, geographic location, industry and SIC codes, years in business. Then go deeper into psychographics, meaning what they believe, their core values, what they buy, what they read, who they pay attention to and their stance on industry issues. Often the right profile already exists inside your current client base and you simply have not looked for it.
What is the difference between demographics and psychographics?
Demographics are the measurable facts about a company: size, headcount, location, industry, age of business. Psychographics are what the people inside it believe and value. Demographics tell you who to mail. Psychographics tell you what to say. The real value in target market selection sits in the second one, which is also the part almost nobody does.
Why is choosing a target market so difficult?
Because the work is tedious and nonscientific. You can research a segment thoroughly and discover it is not lucrative or not a fit. There is also no single perfect market, since a market cannot be judged until you know what you are selling, and good marketing identifies a need before designing the solution. On top of that, building a market requires long-term commitment with no short-term payoff, so most people lose interest.
Can an MSP serve any type of business?
You can, but it caps you. Roughly 80% of MSPs never break $1 million in revenue even after decades in business, and the most consistent trait among them is no clarity about their target market or value proposition. They are the “do anything for a buck” crowd. Choosing who you serve is the decision that sets your ceiling.
How do I research a target market properly?
Go where they are and talk to them. Attend their industry events as an attendee, speak to owners and vendors, and learn the language, the jargon and the acronyms. Understand the trends, who the key players are, what everyone is discussing right now and who they collectively dislike, since a common enemy is one of the most powerful tools in persuading a group. One wrong word will reveal you are not one of them and they will dismiss everything else you say.
What does a psychographic buying signal look like?
Here is a real one. An MSP noticed all of his best clients either had cyber liability and ransomware insurance or were interested in buying it. He built outreach around cyber insurance agents and won over a dozen good clients. It works because any CEO willing to buy that coverage already believes a breach is likely and is willing to spend to mitigate it. Both signals predict someone who will also invest properly in managed services.
