The MSP 2022 Growth Survey Results

TL;DR: Each year Zomentum and Wingman Marketing invite managed service providers (MSPs) across the industry to complete a survey about their business growth.  This is the result of the MSP 2022 Growth Survey.

The survey information is then collated into a report and the results are distributed to its audience.  The results show the trends MSPs are following, and whether there’s confidence in future investment and growth.

As the MSP 2022 Growth Survey follows on from the Covid pandemic, which included uncertain times for many SMBs, some of the results are surprising.

The MSP 2022 Growth Survey Results

The webinar where the results were presented was led by:

• Shannon Murphy – Chief Marketer, Zomentum
• Dave Sutton – Managing Director, Wingman Marketing

The results and insights walkthrough broadcast took place on 17th March 2022.

The live audience participated in interactive polls and in a short Q&A at the end.

You can watch the replay of this webinar here.

What follows is a summarised version of the results.

Why Should MSPs Take the Survey?

The survey results will help you:

• Identify your place among your peers
• Better realise your growth goals
• Take more of a strategic approach

Shannon reported that 60,000 surveys were sent out to MSPs but only 129 were returned completed.

Surveys were anonymous, but participants could supply their email addresses if they wanted to be notified upon completion.

The MSP 2022 Growth Survey consisted of 17 questions, but not all of them were referred to in the webinar presentation.

Looking Back at 2021

The first set of results were for questions that looked back at last year’s growth.

Question: Tell us about your growth last year

• 80% saw increased revenue in 2021
• 15% saw similar revenue to previous years in 2021
• 5% saw a drop in revenue in 2021

So, despite the challenges of the pandemic, which affected many businesses,  95% of MSPs remained stable, or grew.

Question: Where did new revenue come from?

• 50% net new clients
• 29% existing clients seat growth
• 19% existing client projects
• 2% acquisition of other MSPs

In conclusion, it seems there’s almost a 50/50 split between those whose main revenue streams were from new business, and those who grew mostly from business with their existing clients.

At this point, Shannon Murphy did a quick poll of the webinar attendees to ask where their main growth streams were.

47% said existing seat growth was their main stream, while 32% said short team projects provided the majority of their growth.  The remaining 21% cited net new clients as their main source of growth.

Question: How has the pandemic influenced your investment?

• 44% increased their investments
• 30% invested the same amount
• 13% started investing in growth
• 13% reduced their spend in growth

The pandemic saw 44% of MSPs take the opportunity to reach out and help more SMBs overcome their working challenges.

Dave Sutton said: “This shows there’s still confidence in the MSP space despite the fact, I imagine, a lot of MSPs have still had clients that have furloughed staff and have reduced their monthly revenue in some cases. But no one has halted their spending entirely.”

In contrast, Shannon’s poll of the audience revealed that 63% increased their investment budgets, 26% budgets remained the same, while 11% budgets decreased.

Question: Did you see a return on investment (ROI) in 2021?

• 53% increased budgets
• 27% kept the same budget
• 13% had no budget
• 7% decreased budget

Around half of MSPs said they grew last year, and around half of MSPs invested more in their growth.

These results don’t tell us if the investments in question were short or long term investments. Investments that began 18 months ago might be finally bearing fruit, for example. The idea that most of those MSPs that are keeping similar budgets, might have been doing so to tread water until businesses are able to commit to new arrangements.

2022 Focus on Growth

Question: How will growth in 2022 be mostly met?

• 62% net new clients
• 18% existing client seat growth
• 15% existing client projects
• 5% acquisition of other MSPs

The business from net new clients is up by 12% on last year’s figures, and acquisitions are also up by 3%. I think this is clear that there is a lot of movement in the market. More businesses are looking for better remote/hybrid working arrangements and are seeking MSP solutions to do this.

Question: Your main pipeline of potential business is?

• 46% long term
• 29% short term
• 18% immediate term
• 7% non-existent

The results show that less than half are the surveyed group are finding confidence that their pipeline is likely to sustain capacity for longer than 6 months.

While there is confidence in growth in the now and near future.  In the longer term, it seems the uncertainty of recent times has lead to a more reserved approach to growth.

Question: Your current sales and marketing activity is?

• 39% live and proactive
• 30% mildly active
• 22% barely active
• 9% non-existent

It seems from the results that MSPs fall into three categories when it comes to their sales and marketing. They’re either actively seeking new leads, passive or loosely active in their marketing, or they’re comfortable with their existing clients and not really seeking to add any more to their business.

Shannon also pointed out that where some MSPs have little or no marketing activity; this could be because they don’t know where to start.

In a follow-up live poll, which allowed more than one answer, she asked:

Poll: Which marketing channels do the audience feel least confident in using?

• 56% email
• 50% social marketing
• 50% digital advertising
• 33% video marketing

With email, Shannon said that you have to be creative with your email subject lines because inboxes can be quite cluttered and you want to stand out. To which, Dave followed up with “Scary or sexy.  There’s got to be a fear or it be attractive enough to make people click on it. It’s got to jump out from everything else.”

Video marketing was another medium the audience felt they lacked confidence in.  The hosts cited a number of expert resources that would be helpful to follow.  Mentioned were Pete Matheson, Scott Millar and Marcus Sheridan.  Marketing your business yourself through videos allows potential clients to see who you are, and from that connection they’re much more likely to approach you for business.

Question: What’s your level of confidence for growth in 2022?

Where 5 is the greatest confidence and 1 is the least confidence:

• 40% 5 -most confident
• 33% 4 – quite confident
• 23% 3 – some confidence
• 3% 2 – not much confidence
• 1% 1 – not at all confident

Overall nearly three quarters of MSPs surveyed felt quite confident or more so for buoyant growth in 2022.

Potential Challenges

Question: In terms of your current workload levels, are you…?

• 39% at capacity
• 35% over capacity
• 26% under capacity

Capacity limits are strained for most MSPs, with 75% being at, or over capacity. It begs the question; is this an indictment of the current recruitment challenges that MSPs are facing globally? Or is this just a short-term blip that will even out over time?

Leading to the next question…

Question: Are these levels likely to sustain?

• 46% long term
• 34% short term
• 13% immediate term
• 7% unsure

With these results it appears that a whopping 54% will seemingly have gaps in their schedule to fill with work for the medium to long term.

Question: What is the main factor that could keep you from achieving your goals?

• 39% time/resources
• 35% capacity
• 13% strategy and direction
• 13% budget

When it comes to sales, it appears that a lack of time and resources are the primary challenge to MSPs in finding and winning new business.

Strategy Considerations

Question: How formalised are your growth goals?

• 49% formalised
• 43% informal
• 4% unsure how to set
• 4% no targets

This suggests that half of the MSPs surveyed seem to have a firm plan for growth in place, while the other half don’t. In other words, this could mean that potentially their growth depends on factors beyond their control.

Question: How will you go about achieving those targets?

• 53% have put their confidence in their strategy
• 38% have a gut feeling
• 9% are uncertain

Over half of the MSPs surveyed have the confidence in the strategy they have implemented to reach their goals.

Dave offered the suggestion that in order to calculate achievable targets, you have to look at a couple of factors:

• What are your predicted seat growth indicators for the year? (For example: How many clients do you have? How big are they? And are they likely to experience growth?)
• What are you predicted conversion rates for new leads and referrals?

Question: Are you planning to increase your investment in sales and marketing in 2022?

• 49% plan to increase
• 33% plan to keep to the same level
• 7% are considering to increase
• 5% are unsure
• 4% have identified areas to invest in
• 2% not going to invest at all

Nearly half said they would further increase their investment in sales and marketing in 2022. This continues a trend where investment has increased slowly over the past three years, and despite the pandemic.

It shows that while there is expected growth overall, confidence only extends to the next six months for most.  Therefore it seems MSPs need to focus on a longer term strategy to capitalise on their investments.

What Insights can We Take Away?

The three most important takeaways we can see from this survey is:

• Competition is intensifying
• Growth demands forward investment
• More opportunity outside of client base

There are more acquisitions showing this year, which means the level of competition is also steadily increasing in the MSP marketplace.

Resources

The webinar hosts provided some links to some helpful resources:

• Zomentum:  Get your Sales Pipeline Guide here.  And your Ultimate Sales Pipeline Checklist here.
• Wingman: Get calculating your campaign budgets and ROI here.
  

Audience Questions

The session concluded with a quick Q&A for those in attendance.

Q: Does Pay-Per-Click (PPC) work for the IT Industry?

A: It’s definitely beneficial for vendors, but with MSPs it depends on how much you’re willing to spend per click.  It’s worth looking into it if you have a unique focus or niche to aim for. You have to be offering something unique in order to stand out, and if it’s an offering you can monetise then it might be worth trying. If you do decide to try it, the advice would be to watch how your PPC offering performs and don’t overspend.

Q: With so many still using email, would you not advise moving over to social selling and the adoption of Sales Navigator?

A: It’s worth using a combination of both email and selling over social media, because email is still a powerful tool in terms of reaching more of your audience. You should try and keep content for subscribers educational and informative, and not just sell, sell, sell. In other words, as a reader, you should be getting something of value when you open that email, even if you don’t click through to their website.

As with most surveys, the MSP 2022 Growth Survey results were only as good as the number of surveys submitted.  So if you’re an MSP, be sure to make some time for next year’s growth survey!

Did the results surprise you? We would love to hear your reaction in the comments.

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