MARKETING FEATURE
The Painful Truth About Customer Acquisition Costs Right Now
Customer acquisition costs are skyrocketing for MSPs and B2B companies as paid ads, SEO, and social media deliver diminishing returns. Discover why traditional tactics aren’ t working and the strategies MSPs must use now to grow profitably in 2025.
BY ROBIN ROBINS
“ I haven’ t gotten a single new customer all year.”
That was how my conversation started with a very frustrated owner of an MSP generating close to $ 3 million a year. Although he was a new member to TMT, he’ d been in business for over 10 years. His margins were good, his customers happy— but 100 % of his growth was coming from current clients. ZERO organic growth.
“ It’ s like all the opportunities have dried up, and our ads and methods are just not producing like they were over a year ago.”
He’ s far from alone. Across all B2B channels, the customer acquisition environment has tightened: Paid media costs have stayed high after a sizable jump around the election, peaking in Q1 of this year.
Organic search, or SEO, is sending fewer visitors to websites as AI answers more content queries. Along with that, Google implemented a core algorithm update in June of this year that caused millions of websites that were ranking high in search to“ disappear,” cutting off the flow of visitors.
Social media platforms are saturated with advertisers, and various changes in security and spam filtering plus engagement fatigue are continuing to suppress email performance.
And AI is only going to multiply the NOISE. It’ s Getting More Expensive to Add New Logos
The aggregate effect of all of this is seen in one metric that is skyrocketing: customer acquisition cost, or CAC. Fact is, it’ s getting harder to get a marketing message to be delivered and seen by a prospect, and therefore more expensive to add new logos— even for competent marketers.
The response to the increased difficulty of customer acquisition and declining response rates is to do MORE, spend MORE, post MORE, send MORE. But this is continuing to increase the noise levels and competition, which is making buyers more“ ad blind” and fueling tech companies to find and implement far more superior ways of filtering YOU( and all other marketers) OUT.
For example, the cost of securing an MQL( marketing qualified lead) for MSPs running paid ads on Google and Bing is averaging $ 2,428.76. At a 33 % close rate, that’ s $ 7,286.28 in ad costs to acquire a new customer. At a 25 % close rate, that’ s $ 9,715.04. That does not include your SDR cost, sales commission, or the other costs associated with marketing( CRM, website, printed materials, etc.).
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