You may not be able to totally predict the future of your MSP marketing. But with the right ROI-related metrics, it’s possible to drive sustainable growth more efficiently. With proper data, you can develop an accurate margin of error which facilitates better budgeting and likely more effective conversion. Following are several metrics worth considering:
Associated Expenses Per Individual Lead
How much does it cost for you to make a lead? Are you going to conventions, designing content, taking out advertisements, or pushing positive reviews?
To determine the cost per lead, collect data for a few months pertaining to accrued leads and involved costs. If you spend $50k on outreach in two months and produced 5,000 leads, that would be $10 per lead. That could be perfectly legitimate if you’re able to acquire proper conversion.
Total Cost Involved in a Legitimate Conversion
Your MSP marketing team needs to additionally consider the cost of pushing a lead into client status through conversion. If one lead is $10, and only one in 5,000 converts, that can be viable if their individual profit is at the right levels.
Say it costs you $10 to make one lead and $100+ to convert them. But if that lead brings in $10k a month, that’s $120k a year. What this indicates is your cost per lead and cost per conversion depend on the next stat, total client value.
What the Average Value of a Client is in Total
How long will clients stay with you? How much will they be worth? Many contracts have a minimum one year term, meaning you can bank on this baseline revenue expectation.
If average monthly revenue is $5k per client, that’s $60k per year. If 5,000 leads cost $50k and produce one conversion that is an additional $100, then the year’s profit on that one client is $9,890. If you see such returns at two-month intervals, you’ll see an increase of six clients a year and just under $60k a year.
Granted, you probably want to do better; but for many start-ups, those could be reliable numbers. Still, you want a higher profit margin. In this hypothetical scenario, you’d probably want to spend less on lead acquisition.
Brand Awareness Measurements: How Many Monthly Visitors
You need to know how aware the public is of your MSP. One way to do this is measuring monthly visitors to your website and extrapolate from there. Working with agencies which specialize in marketing for MSPs can help you focus on the most effective measurements here.
Following the Right Metric Indicators
An MSP marketing team which has brand awareness metrics, knows average client value, cost of conversion, and the cost per lead will have key tools in planning forward operations. MSPs that have yet to define these metrics probably should.