Getting your MSP business to $1–2 million in revenue is one thing, but moving beyond that requires a different strategy. In this third installment of the 7 Proven Tactics for MSP Growth, you’ll learn what it takes to grow your sales operation beyond the personal network that originally brought you success.
At Navigate 2017, Continuum CEO Michael George outlined seven building blocks that the most profitable, growth-oriented MSPs in the industry all seem to have in common. Designed as actionable skills you can put to use immediately in your business, these tactics are proven building blocks for success in a modern managed IT services business. Each of the seven posts in this special series will explore one tactic in greater detail.
Tactic #3: Expanding Sales Beyond Your Personal Network
As discussed in part one of this series, the demand for IT services in the small- and medium-sized business (SMB) market is so great today that it’s relatively easy for an IT service provider to build a reasonable book of business based on word-of-mouth, referrals and personal networks. This “brute force” method can enable ITSPs to reach the $1–2 million revenue mark and achieve healthy growth, but that growth often plateaus shortly afterward—and it can be very difficult to then move up into the $5m or $10m revenue bracket.
To do so successfully requires a different set of skills and techniques. As the saying goes, what got you here won’t necessarily get you there—and the most successful MSPs are those that can develop a commercial capacity to market and sell their offerings far outside of their own personal networks. This requires thinking about a few specific areas of your business, outlined below, and making specific shifts to properly align yourself for growth.
Choose the Right Sales Methodology
The owner of an MSP business is often the company’s best sales rep, particularly in the early stages of the business. They know the ins and outs of the industry, and they spend considerable time and energy shaping and driving the organization’s overall strategy. As the business begins to scale, however, and new reps are brought on board, it can be difficult to ensure that all team members are achieving the same levels of performance. One way to create better consistency and setup your sales organization for long-term success is by implementing the right methodology.
There are numerous sales methodologies to choose from, including MEDDIC, LSCPA, SNAP, Account-Based, Solution Selling and many more. Choose the one that aligns to your business most closely, and enact it across your organization so that each of your sales team members are aligned and accountable and their efforts are optimized.
Assign Specific and Deliberate Quotas
Expanding your sales network means that your sales staff must also reach out beyond their individual networks as well. To drive that growth and exploration into new territories, industries or verticals, implementing a quote based success system can keep the foot on the gas and emphasize an immediacy to take action. Quotas are a proven means of driving accountability and performance from a sales team. However, they need to be thoughtfully crafted and designed within realistic expectations based on past performance, your sales pipeline and the revenue goals your business needs to achieve. Being specific in terms of targets for individual and team quotas will allow sales staff to drive towards a tangible goal, and will allow better reporting and metrics-based performance tracking.
Define Your Sales and Marketing Responsibilities
Many MSPs often struggle with scaling their marketing efforts, especially if they have achieved $1–2 million in sales primarily through word-of-mouth channels. Marketing is often relegated to a few hours per week—an exercise frequently done by the business owner, a senior staff member or a part-time junior position.
However, scaling to a larger business requires an increased focus on marketing, with responsibilities centered around generating high-quality leads that sales can use to close high-value deals. Keeping these responsibilities separate is important in defining how your organization will grow as time goes by, because they will grow into distinct units as the business grows and revenue goals increase.
Choose a Sales Leader
A fast-growing, high-performing IT services business is most often led by a business owner or a senior leader who spends a disproportionate amount of their time proactively selling. This person should expect to spend about 40 percent of their time selling to net new customers, 40 percent of their time focused on customer satisfaction, with appropriate upsell and cross-sell sales opportunities, and with the remaining 20 percent, they can focus on other aspects of the business.
Optimize Your Content Library
An expanding sales network needs expanded sales materials, so you’ll want to think about updating and adding to your current library of assets. The right collateral could be the different between making the sale and letting it slip by.
You’ll want to make sure each piece of sales and marketing material your organization uses is up-to-date, professionally branded and consistent in its design and messaging. Also, you’ll want to look at the variety of materials you are using as well. Seek out great customers in your client base for formal case studies and testimonials, work with a PR agency to expand your branding footprint, and systematically continue to build your sales assets as they align with your plans for growth. The investment of time here can offer a huge return on investment, as the right asset can help close numerous sales.
By definition, growth is about movement; it takes momentum and a willingness to adapt and change to meet the demands of new challenges at a greater scale. Growing your revenue past the $1–2 million mark and adding new clients beyond your personal network requires this type momentum. It’s a drive for continuous reinvention, as well as an understanding of the processes that are needed to prevent growth plateaus. This is a type of tenacious discipline that moves beyond typical entrepreneurial instincts. It’s a discipline for process and structure, so that you’re set up to grow—a defining factor in the ongoing success of your MSP business as your growth proceeds on a trajectory that’s up and to the right.
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