Why IT Companies Struggle To Generate Leads and Close New Business

As someone that came from a marketing background before entering the IT Industry, there is a lot that I took for granted. What I didn’t realize was that Marketers have an intuition and a “hunter” like mentality that not every IT Founder and CEO has. I myself am not an actual hunter, but one thing I do know is that the best hunters are the ones that know their prey the most. This deep understanding allows them to track, locate, follow, and even manipulate the prey’s behavior in order to get the best shot possible.

A hunter’s ability to walk out into a seemingly empty forest full of trees and in a short time find themselves face-to-face with their target is a skill that can only be learned over time. In a way, this is what is required to successfully market your business. You need to know what type of customers you are looking for, where to look for them, and how to maximize the success of each encounter you have. To help you develop your “marketer mentality,” we have documented a few of the biggest points of failure that we see MSPs facing on a daily basis.

Failing to plan

IT companies often fail at marketing for a lack of planning. I can relate to this shortcoming, since for me, having an official “marketing plan” was always a bit of a struggle early in my career. What I eventually realized was that I was completely overthinking what a marketing plan was and what it needed to consist of.

Forget whatever you learned in college about creating a 50 page marketing plan that contains every little detail. You probably don’t have time to create such a plan, nor should you even if you did. Instead, take a few minutes to jot down the answers to these seven questions and move on. After all, a very basic plan is better than no plan at all.

  • Who are you targeting? (i.e. Industry, Titles)
  • How will you reach your target? (i.e. LinkedIn, Email)
  • How will you deliver them value regularly? (i.e. blog content, video)
  • How will you nurture the relationship? (i.e. newsletter, social media)
  • How will you know when they are ready to buy? (i.e. web form, analytics)
  • How will you convert/close them? (i.e quote, sales process)
  • How will you keep them buying more? (i.e. add-ons, projects)

If you can outline the answers to these questions and ensure that your marketing activities always line up with these objectives, you have a great foundation for marketing success.

Failing to invest

It is becoming increasingly apparent to me that a lot of MSPs are simply not spending enough money on any one marketing activity to see a return. If you read this site often, you know that I often discuss Lifetime Value (LTV) of a customer and using it to determine the success of your lead generation efforts. The same calculations can also be used to figure out how much you need to invest before you can reasonably expect a return on your spend.

Since the numbers we are dealing with in IT are quite large, it can be difficult to comprehend, so instead let’s think about this in terms of selling a $100 pair of sneakers. Let’s pretend that Under Armour is launching a new pair of Steph Curry basketball shoes and driving paid traffic from Google to do so. The company looks to make around $20 in profit from each pair of shoes sold and would like to spend no more of $10 of that on advertising expenses. Wouldn’t it be ridiculous if the company spent only $5 on Google, didn’t sell any shoes, and then stopped the campaign altogether?

This is the exact behavior that many IT Companies commit when attempting to market their business. A Managed Service contract for a 50 person company can generate upwards of $15,000 in profit in its lifetime. To spend only a few hundred, or even thousand dollars and expect to get an immediate return defies the laws of economics. If you want to actively market your business, you need to decide the minimum amount you should spend to gauge success and then spend it all. Depending on your local market and target customer, this number is likely between $5k-$10k.

The State of MSP & Cyber | 2024 IT Industry Report

Sponsored by Worklyn Partners & Zest 

Failing to be accountable

Another red flag that I have come across recently is an overall lack of accountability. I am a firm believer that no matter the size of your Managed Services company, someone directly on the payroll of your company should be getting their hands dirty from a marketing perspective. Whether it is by managing the marketing campaigns directly, or managing the vendors that do so, it is incredibly important to track, analyze, and stay directly engaged in these activities from the inside out.

“Outsourcing” your marketing can be a great decision, but not if you take a hands-off approach. If you are just looking to “pass the buck” and make growing your business someone else’s responsibility, it doesn’t matter which vendor you choose, success is highly unlikely. I realize this can be difficult to do when you are knee-deep in your customer’s technical problems and emergencies happen on a daily basis. This is why you should appoint a pseudo “CGO” (Chief Growth Officer) that is as isolated as possible from the service and support side of your business.

Your CGO will be the single point of accountability for managing vendors and campaigns, measuring return on marketing dollars, and identifying new growth opportunities. If an ad campaign stops working (as they always do) or a vendor under performs, it is their responsibility to identify the problem and fix it. Ad technology and vendors come and go, which is the reason you need someone on your side of the table that understands marketing and what works for your business at all times.

Failing to be consistent

I don’t have to you that selling IT services is a slow burn. If you are spending time and money marketing your business, this process can be excruciating. In psychology, there is something called the “pleasure principle” that a lot of our traits and activities can be traced back to. By nature, we want instant gratification and tend to stray in whatever direction we can find it.

This search for gratification, if not kept in check, can lead you to a completely false sense of accomplishment in your marketing efforts. The area that I see this the most is with an IT firm’s failure to deliver content on a routine basis. The story goes like this: IT Provider watches some “Marketing Guru” on Youtube, or takes some fancy bootcamp that tells them they need to develop a content strategy. They create five blog posts over the course of one month. The posts do not generate any new customers, so they stop and do something else that seems more rewarding.

What they fail to realize is that creating 3 pieces of content a week for a year will give them over 150 articles that will eventually index and bring in traffic organically. If the articles present valuable information, they can receive newsletter opt-ins every single day that they may be able to nurture into a legitimate lead at little cost. This is a proven lead generation process with one prerequisite; consistency. As a rule, I look to take something as close to the brink of failure as possible before pivoting. If I do fail, then so be it. At least I went down trying and learned from it.

The Ultimate Guide To Cash Flow For Managed Services

Sponsored by Alternative Payments & Zest 

Failing to pivot

This leads us directly into our final MSP marketing pitfall which is failing to pivot when you you reach a point of resistance or something simply is not working. As I said before, taking something to the brink of failure is completely acceptable, if not encouraged. However, taking something beyond the brink of failure and never looking back nor learning from your mistakes can be disastrous.

If you are working with a marketing vendor or managing campaigns yourself, you need to realize that what works today won’t always work tomorrow. This is a truth that will remain as long as technology still exists (aka forever). This is also the reason why following someone else’s marketing “system” whether from a book, e-learning course, or through a direct client relationship should be done with a grain of salt. Even I admit that an article I wrote 3 months ago is not as relevant now as it was the day I wrote it. Markets change quickly and static information isn’t always reliable.

Dedicating part of your marketing spend to different platforms and new lead generation techniques will ensure that you are always ahead of the trend. When one tactic starts to see friction or flat out stops generating a return, you can easily reallocate your spending into other avenues that remain open. On the same wavelength, when you find something that is working, you need to bet big. If history has taught us anything, the window of opportunity will close before you know it, taking your ROI with it.