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The Ultimate Guide to Success in Managed IT Services

What are the fundamentals to building a profitable managed IT services business? Keep reading to discover the four key ingredients for success.

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Why MSPs Should Focus on Sales over Tech

Posted October 9, 2013by Lauren Peyton

Focus on Sales

Managed Service Providers specialize in technology, not sales. However, the lower the sales activity, the lower an MSP’s ability generate cash flow and profits to protect itself.  And, in the eyes of a small- to mid-sized business, financial viability and stability is just as important as technical acumen.

The importance of sales cannot be overstated, and a strong sales philosophy and structure are imperative. Without new accounts and recurring services fees, MSPs run into stagnant revenue and declining competitiveness.  The MSPs that thrive are those that stress the importance of sales over any other facet of their organization, adding more salespeople before adding technology or service capacity.
 

Three Phases of MSP Sales

  1. Engage with existing accounts to maintain high retention rate
  2. Expand revenue from these existing customers
  3. Acquire new accounts to increase service capacity utilization

If client attrition rate is high, revenue prediction is difficult, and creates a cycle where every new client simply provides replacement revenue instead of contributing to profitability.  Once a core account revenue base is secure, MSPs can move past the “tipping point” by continuously adding new accounts.  The costs involved with expanding infrastructure is minimized as foundational services and processes have already been established, and market research shows that MSPs typically show accelerated growth after service expansions.

Tips on How to Increase Sales

  • Tap into existing accounts: add new services or bring more devices under MSP management
  • Leverage membership groups and vendor relationships to help cater marketing campaigns to the market’s pain points
  • Invest in sales infrastructure rather than service, as new sales opportunities are typically more difficult to obtain than increased service capability
  • Emphasize the true value of having a managed services provider: bringing automated, remotely delivered technology that boots an SMB’s bottom line
     

As Frank Lloyd Wright said, “Business is like riding a bicycle.  Either you keep moving or you fall down.”  MSPs that keep pushing the sales side of their business find themselves with limitless growth potential.  Ensure that your MSP does as well!

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