Do you want to increase your sales? Obviously, we know the answer.
But the surprising truth is you may be working harder against that goal than toward it.
Managed services provider (MSP) expert Gary Pica has been there and now he’s got your back, sharing valuable lessons learned the hard way. In previous posts, Gary gave guidance on the essentials of a strong business plan and effective service packaging and pricing. Now, he boils down proven strategies in the key areas of lead generation and sales process. The good news is you don’t need a big sales force or marketing investment to make it happen. What you need is focus.
Effective Lead Generation
1. Set Monthly Recurring Revenue Goals with Supporting Activities
Calculate the number of first-time appointments (FTA) you’ll need to reach your MRR goal, based on your close ratio and deal size (what clients spend with you every month on average). Simply illustrated, an MRR goal of $5,000 with an average contract value of $1,000 and a close rate of 20% requires 25 FTAs to bring in those 5 clients.
Drill those numbers down into weekly appointments, contacts, and dials. Now, you have specific activities set toward your goal.
2. Assess Your Current Prospects
Break your current prospect database into buckets or categories, so you can determine the resources you’ll devote to each:
- Suspect – These are the leads you think you want to do business with, but haven’t yet confirmed they meet your criteria.
- Prospect – These are leads you’ve contacted and know they fall into the category of a good prospect in terms of size, location, and type of business.
- Warm – There’s a good chance you’ll be doing business with these companies at some point.
- Hot – These are leads you’re working with who will make a definite go or no-go decision within the next 60 days.
3. All Leads Are Not Created Equal
Learn to differentiate what will have the greatest return for you.
- Email and direct marketing to a very ‘cold’ base usually doesn’t yield great results.
- Join efforts with centers of influence (COI)—partners in the marketplace with the same target market, looking to build their businesses.
- Leverage the power of LinkedIn to generate more referrals.
- The highest close rate referral is typically attached to a returning prospect—someone you were in contact with previously, but who didn’t become a customer at that time. Try re-engaging.
Improving Your Sales Process
1. The Gray Paint World of MSPs
Most sales are black and white. A company needs a new copier, they research their options, decide what they want to pay, and pick a vendor.
But when an MSP first meets with a prospect, there’s a gray area—the gray paint world, as defined by Gary—where neither of you really know why you’re there. It’s your job to identify their pain points and educate them about why they need an MSP, specifically you.
2. Reframing and Redefining
‘Everything in our IT world is fine as is. Why should I pay for your services?’ This is the question facing the MSP sales pitch. Gary says that once he reframed his approach, business completely changed.
Instead of asking a potential client about current performance satisfaction in general, get specific. Ask them, for example, to imagine the potential impact on people and productivity if all their laptops ran consistently at a high level of performance until it was time for an upgrade. Suddenly a need becomes a visual. And your services take on a defined value.
3. Have a Repeatable Sales Process to Build Recurring Revenue
A managed process will help control and shorten the sales cycle, resulting in selling more MRR at a higher price. Always track activities and their results on a regular basis.
Learn more proven methods for becoming a world-class MSP from Gary Pica, Founder & CEO of TruMethods, an MSP training company.