Someone on the Reddit subgroup r/MSP asked me a great question this week.  It’s a question that doesn’t have one answer, or a short answer. So, this blog post breaks a dozen marketing rules, including that it’s going to be way too long and give very precise information – information that will likely discourage potential prospects from reaching out to us to learn more.  That’s okay by me.  I want you making choices that make sense for your business, and that choice won’t always be Managed Sales Pros.

The question was (unedited):

“What does a tech company have to have in place as a bare minimum to effectively engage with you and make it worth the cost/time/effort on both ends (us and you)? (in terms of processes, staff, at what stage of business etc?)”

When we first started our business, my cheeky answer to the “What does a tech company need to work with you?” would have been “Six thousand dollars a month.”  As we grew and matured as a company we learned an important lesson:  you work really REALLY hard if you’re filling a bucket that has a hole in the bottom.  A client base that churns is a terrible client base.  To grow and make money you need your clients to stay with you, and while our clients say they understand that they are buying prospecting services, what they think they are buying is sales.  If they don’t close deals, they don’t stay.  It’s really that simple.  So now, we try to determine at the beginning “Is this a client that will stick it out, or is this a client that’s going to bail the minute the numbers aren’t there?”

So, regardless of your stage of business, process or staffing, here are some things I will challenge you on as you’re considering outsourcing your sales prospecting (or any marketing process…):

HOW GOOD ARE YOU AT CLOSING COLD DEALS? 

Everyone I’ve ever spoken to has said “If you put me in front of someone, I can close them!”  I’m here to tell you that just ain’t so.  If you’ve built your business on word of mouth and referrals, you’ve been lulled into a false sense of how good your closing abilities are.  Referral appointments are different from cold appointments.  In a referral appointment you are 80 percent of the way to a closed deal before you even walk in the door.  When you walk into an appointment secured by a cold call, you’re only 20 percent of the way there.  If you’re treating the sales process the same, you’re never going to close cold leads, and you’re going to unfairly decide that “the leads are garbage.”  They’re not.  They’re cold leads, You’re going to have to work a lot harder to close them, and it’s going to take a lot longer to get them closed. A LOT LONGER.  Most of our clients don’t see ROI from their programs for a full year.

HOW WELL DO YOU UNDERSTAND THE DISPLACEMENT SALES CYCLE?

There is no land grab in managed services sales.  Everyone that you want to work with is already working with someone else.  This means that it doesn’t matter how great you are on the phone, or how smooth your appointment setter is.  A company that’s in a three-year contract isn’t breaking that contract to come to you.  The clients you want are going to make smart decisions to change service providers at times that are minimally disruptive to their business, and they’re going to honor their contractual engagements.   This means that the most important part of your sales process isn’t opening or closing – it’s timing.  Nurturing leads is the most important thing you can do for your sales process.

Let me take you on a brief walk through the process.  You begin with cold leads, and a full-time caller can make about 100 calls a day.  30% of the leads are going to be wrong.  There are no magical lists, they’re all crap. Yes, especially the ones that companies are emailing you about. So, 30% of your caller’s time is spent talking to people who aren’t prospects.  Out of the 100 calls they make, they’ll talk to ten decision makers (on a good day) and of those ten, 2 will immediately be uninterested, 2 are interested –but not right now, and 6 ask for a follow up activity of some kind.  You’ll get (on average) one qualified (Budget, Authority, Need, Timeline) appointment for about every 100 people you talk to.  (Not every 100 dials you make!) Yes, you can bump that number up by scheduling appointments with non-decision makers and unqualified, not buy-ready leads – but now you’re going on meetings that are a waste of your time.   (Side note:  if you’re a new business trying to build up your client base you should go on any meeting you can — build your network, start finding people to refer business to you!)

As you continue calling, you eventually scrub out the garbage, and all of your leads will have follow up activities assigned to them.  Now you nurture them until they’re at the right part of the buying cycle, which is usually three months before their current engagement is going to renew.    You create a process for follow-ups so that you don’t drop the ball on anything in your pipeline.  If you miss the renewal window and a competitor gets to them before you do, you lose the deal.

It may take anywhere from 3 months (the perfect opportunity – right size, right budget, ready to leave a competitor, engagement ending) to 3 years to win a deal.  You need to look at several things to measure successful prospecting.  The goal is building a healthy pipeline, setting quality meetings, and closing deals.  All three.  If you only want the third, you’ll never be impressed by an outsourced company.  Deals come when deals come, you can’t force them, you can’t magic them into existence.  You can nurture leads effectively using a repeatable process, and that’s how you get more deals.

Now based on this, here are some things you should think about before you engage an outsourced prospecting firm for your small business:

  1. Are you paying yourself? If you can’t pay yourself, you’re not ready to pay me.  I don’t want your money, put it in your pocket and prospect yourself until you land enough business that you can pay yourself AND pay me without losing any sleep at night.  (Shameless plug:  we’ll teach you how to prospect, you can totally do this yourself.)
  2. Are you prepared for the outsourced prospecting firm to be the biggest line item on your marketing budget? Outsourcing costs more than double what hiring in-house will.  There is zero reason you can’t do this in-house once you’ve figured out what to do.  (That’s the challenge right there – if you don’t know how to do it, you can’t train it, and you can’t improve it. Shameless plug two:  we’ll teach you how to build your sales process, and we’ll train your caller – you can totally do this yourself.)
  3. If you’re going to sweat bullets every time you write us that check for 6K, you’re not ready. If you’re going to lose your mind when you write that check for 6K on a month when you got zero appointments, you’re not ready.  Marketing is expensive, and marketing isn’t magic.  When you’re deciding whether or not to outsource ask yourself:  “Can I afford to do this for a year even if it doesn’t work right away?” 

This holds true for ALL marketing vendors, we’re not miracle workers.  If you’re going to choose a third-party marketing firm, pick the method you think is going to work best for you, pick your process, choose a vendor, invest in it and hold steady.  Stop-start-stop-start approaches to sales and marketing will bury you.

Let’s talk process and people.

If you can’t close, paying someone for leads is a bad idea.  Learn how to close.

If you aren’t yet using a CRM or a PSA to manage your day to day activities, you’re not ready for outsourced prospecting.  Process and data integrity are essential for sales success.  If you aren’t tracking each and every interaction with your clients, prospects, suspects and leads, you’ll never know what you need to do to improve.  Especially in those long, lean months at the beginning.  Is your campaign failing or just off to a slow start?  What can you do differently?  What things do you change, in what order?  What metrics are you measuring?  I can look at the data from my 50-person call team and tell you in under ten minutes what happened that day and what my team is struggling with.  Don’t have a process for managing your pipeline?  Develop one.  It doesn’t have to be perfect, but it should be easy to follow and help to eliminate redundant activity.  Your bare minimum here should be a step by step process for what happens once the appointment is scheduled.  Who does what, how, when?  (Shameless plug:  I teach a course on how to close cold sales appointments, and it’s good.)

If you’re a business owner and you’re still going on the sales meetings, that’s fine.  If you’ve got a sales rep, that’s fine, too.  There’s no “better” for outsourced sales prospecting, so long as someone is owning the process and engaged in the details.  Once you’ve had the meeting, the lead is your lead, not our lead – so you need to be prepared to nurture, follow up and manage your pipeline.  If you don’t have the time to do that, you probably need a sales rep in addition to a prospecting team.  Which one do you need first?  Prospecting.  Don’t hire a sales rep expecting them to be a good prospector, and don’t hire a telemarketer thinking you’re going to create a sales rep.  They’re different skill sets and entirely different personality profiles.  Sales reps are risk takers, and they’re not known for their attention to detail.  A great prospector listens, takes excellent notes, follows up properly, and wants a steady paycheck (no variable comp).

What stage of growth should you be in?   If you’re looking at growth in terms of revenue numbers, this is a guideline, not gospel:

If you’re growing from 0-1MM, you’re not ready to outsource yet.

At 1MM-2MM you can consider outsourcing assuming you’ve got great margins and a high tolerance for risk.

At 2MM -5MM you are a perfect candidate for outsourced telemarketing.   You’re stable, you can afford to experiment with your marketing dollars, and you’re probably already trying to figure out how to solve your sales challenges.  At this stage many companies have already tried a few times to execute their sales prospecting in-house, or they’ve tried one or more outsourced vendors.  Maybe successfully, maybe not.

At 5MM and up you should have a sales executive (or executives) that requires the support of a steady number of inbound leads – through cold calling, email, digital and events.  Your sales rep shouldn’t be your telemarketer.  Don’t hire a sales rep expecting them to be a great cold caller.  Don’t hire a cold caller thinking you’ll turn them into a great sales rep.

At Managed Sales Pros we believe in supporting companies at all stages of growth.   Our Youtube channel and blog are filled with free content for new and growing MSPs.  Want a script to use?  Email us at hello@managedsalespros.com from your MSP work email address and we’ll send you ours for free!

Trying to figure it out yourself in-house?  We can teach you how to prospect, teach you how to hire and manage a telemarketer, and teach you how to convert your cold appointments into sales.  Check out our instructor-led and on-demand programs here: http://www.managedsalespros.com/prospecting-training/

Ready to explore handing the entire process off to some experts?  That’s where we shine.  Call us at 844-266-2624 to plan your campaign.

Thanks for the support and kind words, r/MSP.  I am happy to help you if I can.