Recently, Paul Chisholm, retired CEO of mindSHIFT Technologies, led an illuminating keynote about revenue growth at Navigate 2016. If you didn't get the chance to attend, we're continuing our two-part recap of his session. In part 1, we established the need for MSPs to defend, protect and grow their existing client base in order to generate additional revenue for their business. Client satisfaction, retention, upsells and cross-sells are all needle-movers, but how can you take this a step further and seek out new opportunities for expansion?
Acquiring net-new business is an essential part of solving what Paul refers to as “the revenue challenge.” When it comes to revenue growth, many businesses will simply look at the dimes and dollar signs. While that is important, another element you should be focusing on is how many new clients you’re adding each month, quarter or year. Increasing the number of accounts you serve and adding to your existing client base will help drive revenue and add value to your business. Typically, going after new business requires three main things:
- Target Market
- Sales Process
Let’s break these down.
An investment is more than just money – it also requires your time, resources and effort. Because the MSP business model is so technically-oriented, that’s usually what people are investing in; the technology. However, there needs to be a balance. Sales and marketing are crucial elements in any business, yet many MSPs put these initiatives on the backburner. If you want to increase new client acquisition, you have to invest in sales and marketing.
How much do I invest?
Unfortunately, there’s no magic formula or number for this. MSPs vary in business makeup and size, and they can only invest so much. Paul did, however, stress that if you don't invest in sales and marketing, you'll be driving your business towards a dead end. You won’t have any significant growth if you’re not increasing awareness of your business and closing those deals. This is part of your commitment to growing revenue, and as Paul stated in his keynote, “zero investment is not an option.”
When your prospective clients are in need of a service, they ask themselves who they can trust and which IT solution best fits their business needs. It’s Sales’ job to guide them toward the decision to outsource to you. How is your company different from everyone else? What unique value do you add? A stellar sales team can answer these questions for potential clients, but it takes dedication and focus. In order for sales to be predictable and build value, you have to work at it at a constant basis.
Marketing is really just an awareness game. You need awareness of your company and brand, and that requires time and consistency. Effective marketing will help you broadcast the value of your business. The goal should be that people think of your company when they’re searching for a supplier. This is especially critical in the competitive, online world we live in. Great marketing allows your company’s name to pop up first in potential clients’ minds, or first on their search page. In turn, these marketing efforts help increase your visibility to new revenue generating opportunities.
To effectively gain new business and avoid wasting money, you need to focus on targeting. Not every sale is important – it’s the right sale that counts. First, define who your ideal prospect is. What qualifies them as a good fit for your business? Once you determine this, you'll be able to better allocate your resources and approach the right clients.
An MSP sales process comes down to one word – discipline. Sales should be a weekly event within your organization, so don’t wait until the end of the month or quarter to close those deals. If your sales aren’t predictable, you need to take a closer look at your overall process. Are your pipeline stages clearly defined? Are there certain obstacles in the way of prospects becoming clients? If so, how can you eliminate those or simplify the process? Ask yourselves these questions when deliberating about how to increase new client acquisition.
Ultimately, overcoming the revenue challenge comes down to this: you need to protect and grow your base, make the culture of your organization one of commitment, have a concentrated effort to close new business on a monthly or quarterly basis and finally, measure your success.
By Richard Harber
By Gretchen Hoffman
By Meaghan Moraes