How should your MSP define its marketing budget? There are several popular approaches to budgeting for marketing, but not all of them work for MSPs. Keep reading as we discuss why some methods fail, and we will offer a few suggestions to point you in the right direction.


Percentage of revenue


Many MSPs allocate a specific percentage of their revenue for marketing, but this is not the best approach for several reasons. First, if you’re not currently marketing, your sales revenue is not coming from marketing, so choosing a sales-based figure has no connection to your marketing budget.


This approach isn’t ideal as it implies sales drives marketing. The opposite is true, and both areas of your business should work together toward success. For best results, create your budgets separately, not tied to one another. Marketing budgets based on sales revenue imply that the number of deals you close should tell you where to spend your money. This approach is not the way you should create your budget.


Competitive parity to get the right MSP’s Marketing Budget


MSPs should also be wary of letting competitiveness guide their budgeting. It is understandable to think that you need to imitate your competitors if you want to make any headway in conquering them, but going all-in on fully matching them is an approach that will fail. 


First, it’s impossible to know if their methods are effective or why they chose that route. For example, you might have seen them featured as a sponsored special speaker on the news and found out you can do the same by shelling out a few thousand dollars. Perhaps they did that because they have a family member who works for the news organization,  and it may not even be getting them any results.


However, you can let your competitors’ marketing choices serve as a starting point in determining your approach. If your main competitor dominates in one unusual area, like billboards. Then you can compete head-to-head to get your name out there. But you should never devote your entire marketing budget to match them.


The “objective and task” method to MSP’s Marketing Budget


One way to define your budget is to work toward a specific target and see how much money you should spend to make it happen. According to the “objective and task” method, you allocate a certain amount of money to your marketing budget based on your specific objectives instead of an arbitrary amount or percentage of sales revenues.


There are three simple steps in this approach:


  1. Set your objective: What does your MSP want to achieve? You’d like to increase sales by 10 percent by the end of the next quarter. That’s something you should do to grow your business, anyway.
  2. Identify tasks: This involves figuring out what you need to do to reach that goal. For example, You decided that newspaper ads are the way to go, and run a weekly ad in each of the local papers for the next three months.
  3. Estimate costs: Finally, you need to calculate how much money you will need to meet your goal. You’ve called the local papers, and each ad will cost you $100 to run. So, for 12 weeks, you’re looking at $1200 per newspaper or $2400 overall. That’s the amount of money you need in your marketing budget.


Focus on your MSP’s Marketing Budget

By focusing spending on your MSP’s key goals, you can find an amount of money for your marketing efforts. If you can’t afford the marketing needed to reach those goals, you can adjust them at a later date. For example, you try to hit that 10% sales increase in two quarters rather than one. Another is you’ll aim for a 5% increase this quarter instead of 10%. The beauty of using “objective task budgeting” is how easily it can be adjusted to suit your needs. 


All MSPs struggle with their marketing efforts, that’s why we created CharTec University. When you attend our Academy events, you’ll get help with your marketing and other areas of your business. Make sure to register today! We’ve helped turn MSP owners like you into millionaires.


Register for Academy Here


As a valued member of the CharTec community, we’d like to offer you a free downloadable spreadsheet that guides you in scheduling, creating, and posting social media content for your MSP. It includes images, links, and helpful tools to make your social media efforts infinitely easier.


Download Free MSP Resources Here