In the movie Patriot, Benjamin Martin, played by Mel Gibson, warns his comrades not to go muzzle-to-muzzle against the English army and still hope to win. It just couldn’t happen.
Similarly, MSPs are better off not going head-to-head with their competitors because it can only lead to painful bidding wars, weeks of proposal writing and groveling at the feet of apathetic procurement agents. And even if you win the project, it’s likely to be obscenely over-scoped and underpriced. This is especially true if you consider that now you’ve fully booked your calendar, so even if some ideal clients come along, you can’t accept their properly scoped and priced projects because you’re now fully booked.
This is the reason airlines are more willing to fly planes with empty first-class seats than to discount them for coach passengers.
When it comes to marketing MSP services, we can distinguish three main approaches.
- Attrition marketing
- Maneuver marketing
- Special operations marketing
I’m not saying one approach is better than the other because whichever you use depends on your business model, your offer, your target market, and some other factors.
If you run a generic MSP firm with multiple industries as your target markets, you can be nicely profitable using attrition marketing or maneuver marketing. On the other hand, if you run both a vertically (one single industry as your target market) and horizontally (limited range of services) specialized MSP firm, your profit may well lie in special operations marketing.
For the sake of better demonstrating the three marketing approaches, let’s use three types of mining for context. You may even enjoy my mining examples so much that you sell your MSP firm and buy a mine.
So, considering all this, in this first part of my three-part series, we’ll begin with…
1. Attrition Marketing: “We Are in The Mining Business”
In this scenario, you mine for anything from coal through fossilized dodos to gold. The good news is that you don’t have to move a lot of dirt to find something because anything that you bump into can be something useful. You start with a large plot of land, survey the land and if the survey shows a significant number of mineable deposits, then you buy it and set up your operation.
And this is where your problems start. You need a lot of people with diverse skills and diverse mining equipment to be able to mine anything that comes your way. Further, you must work your people and equipment 24/7 to mine enough deposits to cover your enormous operating costs.
Remember, most of what you mine are low-priced minerals, so you need to mine an awful lot to turn a semi-decent profit. And even if you produce impressive gross revenue, your profit margin is likely to be as skinny as Pontius Pilot’s cat.
The MSP equivalent of this “We are in the mining business” approach is “We provide MSP services”. More specifically, “We offer any kind of IT services for any industry.” We can call this approach attrition marketing because you have a lot of competition and buyers have lots of alternatives besides your firm.
One side of the coin is your marketing budget. Since your marketing is generic, your marketing costs are quite high. After all, promote a broad range of services to multiple industries. The other side of the coin is the reception and the perception of your firm and its offers.
As a generalist, you come across as one of the thousands of vendors in the vast ocean of other MSP generalists, meaning that once you get leads that are somewhat interested in hiring your firm, you have to work very hard to convince those buyers that you are the real deal, and they should choose you. Additionally, you may have a hard time connecting with the C-suite because you get quickly relegated to the purchasing department where you are likely to be beaten up on your pricing. And when you meet buyers, you can’t say too much about why they should choose you because your offering is very similar to your competitors’.
This reminds me of a section from Claude Hopkins’s Scientific Advertising (which I think every MSP firm owner and business developer should read). This is from Chapter 3: Offer Service…
“Remember the people you address are selfish, as we all are. They care nothing about your interest or your profit. They seek service for themselves. Ignoring this fact is a common mistake and a costly mistake in advertising. Ads say in effect, “Buy my brand. Give me the trade you give to others. Let me have the money.” That is not a popular appeal.”
Although attrition marketing’s from-idea-to-implementation cycle is quick, its overall effectiveness is quite low. You must plow through a lot of sales leads and submit a truckload of proposals to land enough work to sustain healthy growth.
The tactics of attrition marketing are based on their scalability. Every tactic must be performed in large numbers. And there is no overall marketing strategy, only a bag of, usually ‘flavors of the month, tricks, techniques and tactics. “Last month, we did Facebook advertising. This month let’s do LinkedIn advertising. Next month, who knows?” This approach also includes random (non-facilitated) word-of-mouth referrals (a.k.a. hopium), cold calling, haphazard non-targeted publishing in diverse publications on unrelated web platforms (and erroneously calling it content marketing).
Ultimately, this model is based on high-volume of low margin “budget” work and the main aim is to gain more clients. The problem is that as your operation and revenues grow, so do your costs. Yes, you have more clients, but it takes more resources (time, effort, money) to service them.
And sometimes, usually due to unforeseen circumstances, your cost can go on a growing binge, leading to a financial disaster.
And this is what the next marketing approach tries to avoid. So, stay tuned, and I soon hit you with my next literary masterpiece in this series: Maneuver Marketing: “We Are in the Precious Metal Mining Business”.
Photo: Adam J / Shutterstock