Having worked with thousands of MSPs and Continuum partners, there is one area that poses consistent difficulties as these providers attempt to grow their businesses: How to transition from a firm that is built primarily on connections and referrals to a business with a proactive sales model.
Because most managed IT services practices are started by talented and driven technical people, making the turn into a commercial entity can be daunting. But to truly ignite business growth, owners must make this shift. The first step: Get a plan for how you’ll transition from an organic, referral-based model to a proactive, sales-driven model.
Start with a referral-run growth engine. It’s critical to getting off the ground in a highly competitive space. Putting together the elements of a successful MSP operation can be an all-consuming effort accomplished with limited manpower. The task of selling managed IT services often takes a back seat to actually delivering these services for existing clients. And as those efforts pay off and more business comes by way of referral, owners must concentrate on ensuring they are delivering the highest level of service. And it’s OK — this is a good problem to have! It’s a common and important phase to go through, but it’s equally important to be able to identify that it’s happening so you can do something about it.
Eventually, you’ll reach a tipping point where organic growth slows.
Now, proactively generating new business becomes even more important. It’s at this point that many owners take a transitional step by encouraging and empowering their technical staffers to begin “selling" services to new clients rather than just delivering services to existing accounts. From an owner’s perspective, this is a logical move — you maximize existing employees’ impact while positioning technical talent to make more money and add to their professional tool belts.
More often than not, however, this plan doesn’t work as well as all parties would like. Simply put, employees that succeed in technical positions are successful because they are talented IT professionals with very specific skill sets. Being a salesperson is something that many have never even considered.
In fact, most would agree that the two talents are diametrically opposed.
The results of edging technical people into sales roles vary. However, in my experience, but more often than not, the attempt to morph technical talent into a sales arm for the business has unexpected effects on valued employees and produces diminishing results for the organization.
It’s difficult enough to hold professional salespeople accountable for results. Imagine how someone who is task- and problem-driven might react when questioned about sales efforts while on a service-related call.
Simply put, when you ask employees to do something that is too far outside of their areas of expertise, you are introducing cultural change that may not work to the advantage of the business overall.
This is a decision that many MSP leaders make as a reaction to stalled or limited growth. A better way to address this critical moment in the development of an MSP’s lifecycle is through meticulous planning and a thorough understanding of the various elements of transforming your business into a sales machine. Look for more on that in the next installment in this series, which will examine the pros and cons of full- versus part-time sales efforts, the difference between hunters and farmers in a sales effort and compensation structures.
By Gretchen Hoffman
By Gretchen Hoffman