Planning for MSP Sales Growth
–Carrie Richardson, Partner, Fox and Crow Group
Strategic Planning for Sales Growth in Managed IT Services
In any business, including managed IT services, growth is not just a goal but a necessity for sustained success.
Plan For Growth Before You Invest in Lead Generation
Carrie Richardson, an accomplished entrepreneur with a rich history in the MSP industry, provides invaluable insights into the importance of strategic planning for sales growth. Her advice is particularly relevant for MSPs looking to navigate the complexities of scaling their businesses in a sustainable and effective manner. Carrie founded Managed Sales Pros in 2014, and this post is taken directly from one of Carrie’s sales training webinars. You can watch that webinar with no paywall it it’s entirety right here:
 
Setting Realistic Growth Expectations
One of the most critical aspects of planning for MSP sales growth is setting realistic expectations. Many MSPs aim for ambitious targets such as doubling their revenue or adding substantial annual recurring revenue (ARR) within a year. However, as Carrie Richardson points out, these goals often need to be grounded in reality. “One of the biggest questions I’m always asked when we work with an MSP is how much can I realistically grow my business in one year?” she says. This question underscores the need for a nuanced understanding of one’s historical performance and capabilities.
Carrie emphasizes that if a business has historically grown by only five to ten percent annually, expecting a sudden spike to 100% or more is unrealistic. “The odds on that are very low,” she asserts, drawing from her extensive experience in the field. This does not mean that substantial growth is impossible, but it requires a careful and well-considered approach.
The Role of Historical Data and Preparation
Preparation and data analysis are crucial components of effective growth planning.
Carrie advises MSPs to delve into their historical data to set informed and achievable targets. “Go back and find three years’ worth of historical information,” she suggests. This examination of past performance provides a solid foundation for realistic goal-setting. Moreover, she warns against creating sales plans in isolation. “Unrealistic sales goals are demotivating, and they’re not just demotivating for you. They’re demotivating for anybody in your organization that you’ve included in this plan,” she explains.
Ensuring that the entire team is on board and aligned with the growth goals is essential for success.
Understanding Client Retention and Churn
Client retention and churn are pivotal metrics that MSPs must consider when planning for growth. Carrie emphasizes the importance of analyzing these rates to get a clear picture of business health. “Find out how many clients you normally add in a year. Now find out how many clients you average losing in a year,” she advises. Understanding these dynamics is crucial because sustainable growth is not just about acquiring new clients but also about retaining and growing the existing client base. “60% of your revenue should come from within your base, your base should grow every year along with new client acquisition,” Carrie notes, highlighting the significance of a balanced approach to growth.
The Complexities of Outsourcing
Outsourcing sales and marketing functions can offer MSPs access to specialized expertise, but it also comes with inherent risks – even with an expert firm like Managed Sales Pros.
Carrie warns against outsourcing these functions without a thorough understanding of the potential downsides. “You should not be outsourcing anything that has a recurring fee attached to it or a contractual obligation until you are 100% able to lose the entirety of that investment or get a 0% ROI on it,” she cautions.
The decision to outsource should be made with careful consideration of the business’s financial health and capacity to absorb potential losses.
Outsourcing Lead Generation with Managed Sales Pros
Managed Sales Pros has always been very up-front with what outsourced lead generation can and can’t do for MSPs. It takes time, and it’s a big investment. There are no business development emergencies. Managed Sales Pros does not believe in prohibitive contracts, but we also don’t want people spending money without understanding that without a year-long commitment, your return on a marketing investment may be very nominal. Managed Sales Pros should be part of your lead generation plan, not your entire lead generation plan.
Talk to the team at Managed Sales Pros early so you can begin planning well in advance of your desired start date. You can email us, or use the contact form below.
Wondering what you can expect from a lead generation campaign with Managed Sales Pros?
We also like to be open and transparent, which is why we created this expectations infographic for prospects:
Owner-Led Sales and Continuous Learning
Carrie strongly advocates for owner-led sales initiatives, emphasizing the critical role of the business owner in driving sales growth. “The most successful managed service providers are the ones who are owner-led sales organizations,” she asserts. Owners need to be actively involved in the sales process, continuously learning and improving their skills. Sales and marketing are not just tasks to be delegated but core functions that require the owner’s direct engagement and oversight. “Sales and marketing is just a process. Once you build the process, you follow the process, you test the process, you improve the process,” Carrie explains, highlighting the iterative nature of these functions.
Engaging and Motivating the Team
Effective growth planning is a collaborative effort that involves the entire team. Carrie emphasizes the importance of including team members in the growth strategy to ensure their buy-in and motivation. “Failure to grow can often be traced back to a failure to include your team in your sales growth plans,” she notes. Making growth plans worthwhile for the team, through financial incentives or other benefits, can significantly enhance their engagement and commitment.
Time Management and Sales Activities
Managing time effectively is a critical aspect of successful sales growth. Carrie advises business owners to protect dedicated time blocks for sales activities. “Find a one-hour block on your calendar every day. Two hours would be better, but let’s start with one,” she recommends.
This disciplined approach ensures consistent progress towards growth objectives and helps maintain focus amidst the myriad daily tasks.
Gather Perspective Before You Plan For Sales Growth
Strategic planning for sales growth in managed IT services requires a realistic, data-driven approach, and an inclusive mindset. By understanding historical performance, analyzing client retention and churn, carefully considering outsourcing, and actively involving the owner and team in the sales process, MSPs can set and achieve sustainable growth targets. Carrie’s insights provide a comprehensive roadmap for MSPs aiming to navigate the complexities of business growth successfully. “If you plan the work and work the plan, the plan will work,” she concludes, encapsulating the essence of strategic growth planning.
FAQs: Growth Planning For MSPs
How can MSPs set realistic sales growth expectations? MSPs can set realistic sales growth expectations by analyzing their historical performance, understanding their capabilities, and setting informed targets based on data rather than ambitious, ungrounded goals.
What role does historical data play in MSP sales growth planning? Historical data provides a solid foundation for realistic goal-setting. By examining past performance over several years, MSPs can set informed and achievable targets.
Why is client retention crucial for MSP growth? Client retention is crucial for MSP growth because sustainable growth relies not only on acquiring new clients but also on retaining and growing the existing client base. High retention rates ensure a stable revenue stream and support long-term growth.
What are the risks of outsourcing sales and marketing functions for MSPs? Outsourcing sales and marketing functions can offer specialized expertise but also comes with risks. MSPs should avoid outsourcing without thoroughly understanding the potential downsides and ensuring their financial health can absorb potential losses.
Why is owner-led sales important for MSP success? Owner-led sales are important for MSP success because the business owner plays a critical role in driving sales growth. Active involvement, continuous learning, and improvement in sales and marketing processes are essential for achieving growth targets.
How can MSPs effectively manage their time for sales activities? MSPs can effectively manage their time for sales activities by protecting dedicated time blocks on their calendars. Consistent, disciplined time management ensures progress towards growth objectives and helps maintain focus amidst daily tasks.
When You’re Ready to Grow, We’re Ready to Go!
Once you’ve planned for growth, including earmarking a budget for your lead generation activities, we’re here to help. Fill out the form below, and we’ll get back to you as quickly as we can!
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