I’ve written a lot of posts on how MSPs can generate new leads, improve close rates, and become more successful in sales and marketing—but I think it’s time to flip the script a bit. While the fact remains that you can’t effectively grow your business if you’re not acquiring new clients, that doesn’t mean that you should jump on every opportunity that comes down the pipeline. In fact, knowing when to say “no” to a prospect can be just as valuable as knowing when to say “yes.”
In this post, we’ll explore four red flags that could signal when it might make sense to pause (or even walk away from) a potentially bad deal.
1. They’re Focused Only on Price
It may be a good idea to avoid deals where the prospect is only interested in price; where all that matters to them is getting your services for the lowest possible cost each month. The main reason why this is a red flag is because if cost is all that they see, it means they don’t fully understand the value behind your services.
You want to do business with prospects who understand how important technology is to their business and their long-term goals. If they view IT as simply a line item on a spreadsheet, you’re going to struggle with justifying the cost of your premium outsourced IT services. You don’t want to be stuck in a situation where, if one thing goes wrong, they’re questioning why they’re paying you. To avoid this, watch out for those prospects whose sole focus is on your price tag.
2. They Have Unrealistic Expectations
On a similar note, you want to be weary of prospects who have unrealistic expectations around service delivery, service level agreements (SLAs), response times, the way that your services work, or anything of that nature.
For example, if someone were to think “we’ll buy your security services and plug them in, and as soon as we do we’ll be 100 percent protected from any possible security threat,” that’s obviously unrealistic. No security technology exists today that is 100 percent foolproof from any type of cyber threat or attack—and as the service provider, it’s your job to properly set these expectations.
You should already have well documented SLAs and contracts that spell all of this out, but you also need to make sure that the prospect understands all of this information before they actually sign on as a client. If they lack this understanding of what you’re accountable for and what they’re accountable for, it could put strain on your relationship and you may end up butting heads down the line.
3. They Can’t Commit
If a prospect can’t commit to anything, that’s definitely a red flag. This includes if they’re only looking at a bare minimum contract, if they’re stuck in ‘trial’ mode, or if they aren’t interested in going all-in or taking the next step with your services. Sometimes these can be OK situations to be in if you need a foot in the door, but you should watch out for those people who are unwilling to commit and will end up stringing you along.
This is especially important as it relates to timing and deployment. It is perfectly normal for a prospect to tell you, “you know, this sounds like a nice offer, but let’s circle back in three to six months.” It’s when you continuously get this response each time you check back in that indicates the deal may be a waste of your or your sales reps’ time. You don’t want to be spending any more time than necessary to move a deal forward—and your reps need to be that first line of defense where they can identify which leads they’ve been working for a couple months that can’t commit to doing business with you, and then take a step back to see if it’s worth pursuing.
4. They Don’t See the Value
This last point really wraps everything together that I’ve mentioned above. If your prospects truly don’t see the value of what you’re offering, you don’t want to be selling to them.
You’re delivering more than just IT services—you’re providing technology roadmaps and business strategies that will enable success for your clients’ businesses. If they’re not able to grasp that concept—if they’re stuck on the idea that they need an MSP just because they need someone to help manage their IT—they’re not the right client for you.
Even when a prospect says they’re ready to sign up and get started, make sure they really understand the value and different components you’re bringing to the table because that’s going to set you up for a sticky, healthy, and profitable relationship in the long run.
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