How MSPs Can Successfully Handle Outbound Prospecting

Jan 19, 2017

How MSPs Can Successfully Handle Outbound Prospecting

BY Carrie Simpson

Carrie Simpson is the founder and CEO of Managed Sales Pros. She has over 20 years of cold calling experience, and supports a team of 30 lead generators. Her team makes over 40,000 outbound MSP prospecting calls monthly.  

While some may argue that “cold calling is dead”, I can assure that it’s very much alive in companies that have invested the time and resources to build and manage a process that works in their market. Every market is a little different, every vertical buys differently, but consistently we see MSPs that are focusing on net new (vs. referral based) business development generating as much as 500 percent ROI after investing two years in outbound prospecting.

So, why do some MSPs succeed in outbound prospecting while some flounder? What do great MSP sales organizations do that their counterparts don’t?  We’ve narrowed it down to six key factors:

  1. They understand their sales cycle

  2. They track the right KPIs

  3. They actively solicit referrals

  4. They understand the value of the thin wedge sale to open the door

  5. They focus on growing their revenue from within their base AND new opportunities.

  6. They execute

In this six-part series, we’ll address each of these individually, and focus on what you can do to make incremental changes to your sales process. We remain committed to helping MSPs increase their sales by increasing their chances to sell, but outsourcing your sales prospecting may not make sense to all companies at all stages of growth. If you have questions or comments through this series, please feel free to reach out to me personally. 

Great MSP Sales Organizations Understand Their Sales Cycle is Changing

This is creating some challenges. As managed services move quickly towards a commodity-style sale, traditional sales forecasting is becoming less accurate and leading to poor decision making. 10 years ago, the MSP sales cycle was shorter. It was primarily a land grab sale -- not everyone had a provider they were already engaged with. The idea of an outsourced provider, and a flat rate solution was new to many companies. This meant that most of the sales process needed to be focused on educating your prospect on the concept of managed services. Explaining the service, why it was beneficial, what they could expect – this was previously the lion’s share of the sales cycle. When you connected with a decision maker, a great sales pitch could win you the deal quickly. This led to sales forecasting built around stages, deals with predictable close dates, and a sales cycle (post first sales appointment) that was about or under 90 days. In many cases, it required a skilled (read: pricey) sales executive—one with the correct combination of both soft skills and technical knowledge. If you look at the companies that thrived instead of flatlined, you will likely find a charismatic, sales-focused principal who took ownership of the sales process and focused his/her efforts there instead of heavily managing the support side of their business.

Fast forward to today. The MSP sales process has changed. There is no more land grab. Almost every company that is technology-dependent or technology-strategic now has a solution provider. Be it break-fix or managed, their current provider might range in caliber from the sort-of tech-savvy son of the neighbor next-door to your strongest and most qualified competitor. This means you no longer have to educate your prospects on the concept of managed services the way you did previously. Prospects understand what outsourced IT support is, and they understand why it’s valuable. We know this because they are already outsourcing to someone else. 

This change has led to the beginning of the sales cycle being considerably shorter, and this brings with it a new challenge: the end of your sales cycle is getting less predictable, and much longer.  This affects you as a business owner, especially if you’re the one doing the closing.  Most of the work now falls on the tail end of the sales process – the part you’re used to breezing through.

Unseating an incumbent provider isn’t easy. Most reasonable people don’t break contracts unless something catastrophic happens, and the kind of clients you want aren’t the ones that make snap decisions about changing vendors. This means that even the best sales pitch doesn’t win you immediate business. The only things that will win you business when you’re trying to displace a competitor are a process and timing.  

How Do You Adapt?  

To excel in competitive displacement sales, you must create a sales culture that values “showing your work” and data integrity. If you are not building a proper pipeline, and entering all information about interactions with your prospects, you’ll have very little means by which to measure their success. Your sales process is contingent on information that includes contract end dates and competitive information. The new MSP sales cycle requires extreme attention to detail, comprehensive notes and a commitment to well-executed follow-up. The MSPs that have figured this out have an idea of how much business they’ll win within two years, not two quarters. Plan your sales process around your sales cycle and ensure everyone understands the value of data integrity.  Short term, you’ll experience some challenges with change management. Long term you’ll experience sales success.

Some Things to Consider:

  1. In a displacement sales cycle, you can incentivize your team for a variety of accomplishments, not just closed business. Consider bonusing not only on deals but on a “points” system that requires a certain amount of activity monthly. This will allow you to work with different types of sales executives—a sales rep that thrived in a “quick wins all the time” role won’t do well waiting a year for a deal to close. Want to find more and better sales talent? Find creative ways to work with different types of sales personalities.

  2. An “activity-based points” system ensures that your sales team is completing all steps of your sales process, and entering valuable data into your CRM or PSA. This is essential for proper succession planning and accurate sales forecasting. 

In the next post, we’ll address the KPIs and activities you can use to determine whether or not a new sales hire is getting it done, and the key items you’ll want to focus on so that you can accurately predict your sales cycle for years, not quarters.

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