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MSPWorld, held this week in Las Vegas, covered a lot of ground, especially with regards to sales methods, an aspect of business that many managed services providers (MSPs) agree is an industry weak spot. On the first day of the conference, MSPs from various American marketplaces gathered on stage to discuss MSP sales issues and share ideas on how the industry can improve.
Highlights from the discussion included:
Technical expertise and sales prowess: Two different animals
"The reason that MSPs have traditionally not been good at sales is that, by and large, MSPs are run by technologists. We typically want to gravitate toward the features of the services that we're providing because that's what we're comfortable talking about," said John Burgess, president of Mainstream Technologies, an MSP based in Little Rock, Ark. The real focus should be on the customer's particular business problems.
A typical MSP sales practice that doesn't work is hastily approaching the customer as a "trusted advisor" before proving yourself. MSPs should first earn that trust by solving the customer's immediate problem, Burgess said.
Celia Weaver, co-founder and president of MSPAlliance, added that selling managed services demands an approach more along the lines of selling insurance than selling a car. "It's more of a confidence sell," she said, advising MSPs hire a salesperson if selling isn't a strong suit.
Managed service providers: Selling requires unique skillset
Panelists explored the differences between a value-added reseller salesperson versus a managed services salesperson.
"The difference is you've got to look at what that salesperson is passionate about selling," said Peter Kujawa, president of Locknet Managed IT Services, an MSP based in Onalaska, Wis., and a division of EO Johnson Business Technologies. "If they're passionate about selling … speeds and feeds and focusing on pricing, discounting, packaging and delivery schedules and all those things, they're probably not going to make a good move over to managed services. Frankly, my best managed services [salespeople] would do terribly selling in that world."
Kujawa said he thinks the days of aggressive, pushy sales forces are over. Whether an MSP should staff its sales team with "hunters" or "farmers," both types of salespeople need many of the same front-end skillsets. "The skillset of listening, building empathy, understanding a client's needs and strategy, and aligning with that, it's the same for both [hunters and farmers]. What's different is what motivates and excites somebody."
Locknet's successful hunters are excited by closing deals, whereas its farmers are motivated by developing long-term customer relationships.
Building referral networks versus building a channel: Weigh the pros and cons of each
"If you're considering a channel, you need to seriously think about why you are considering a channel as an option and what you expect to get out of it," Burgess said. "Unless you're just knocking it out of the park with your existing sales staff and you're looking to either grow it geographically or scale it massively because you've got such a good sales process in place, adding all those partners is not going to help you sell more effectively."
Burgess and other panelists supported referral networks. "We will refer customers that don't fit our profile. They may be smaller than we like to deal with. They may be larger than we can effectively handle. They may be looking for a point solution that we don't offer. So we try to keep a network of other providers … and we're okay with tossing work over the wall to each other," he said.
Weaver brought up a caveat about referrals. "You have to be careful about who you're referring to because you don't want that to reflect [poorly upon you] if it does end up being a bad partner. You do have to do some due diligence, I think," she said. Building out a referral network within your vertical industry is a good way to go, she said.
Consider different compensation models for your MSP sales team
Michael Corey, president of Ntirety, an MSP based in Dedham, Mass., said he uses a bell curve for his company's compensation model, paying 50% of the competition's base compensation. "Fifty percent of the employers are paying better than me; 50% of the employers are paying worse than me," he said.
For variable compensation, Corey said salespeople will have to earn it. "I'm going to get you to the right of the bell curve, because as you do good things for the company, the company will do good things for you."
MSP also have to understand and align with what its marketplace is paying. When that's impossible to do -- for instance, because you're in California and competing with heavyweights Oracle, Salesforce and Google -- then you have to change the game, he said. He suggested competing on quality of life. "In consulting, I would compete on the fact that we would do 99% of our work remotely. You're not on a plane every day," he said.
IT channel news roundup for the week of Oct. 19
This week saw much-anticipated partner news from DellWorld. Other highlights included:
- BitTitan launched MSPComplete, which the company describes as an enablement platform for Microsoft-focused MSPs seeking to create cloud offerings. The platform aims to help MSPs sell Office 365, Microsoft Azure and complementary services, onboard cloud products and workloads, and service customers throughout the lifecycle. Geeman Yip, CEO of BitTitan, said MSPs struggle with how to sell the cloud. "This is probably one of the biggest problem areas," he said. Earlier this year, BitTitan introduced its BitTitan Partner Advisory Service to support partners' email and data Office 365 migration projects.
- Accenture completed its acquisition of cloud consultancy Cloud Sherpas. More than 1,100 of Cloud Sherpas' employees have joined the newly formed Accenture Cloud First Applications team, which focuses on delivering cloud services for Google, NetSuite, Salesforce, ServiceNow and Workday.
- Comodo Group Inc. integrated the Comodo One managed services platform with Acronis Cloud Backup. Acronis said it will host and offer storage for global services provided through the Comodo platform. MSPs can purchase Acronis Cloud Backup through the Comodo One app store.
- Last week, SolarWinds N-able released MSP Anywhere, a new cloud-based remote control access and support platform for MSPs. SolarWinds N-able acquired the software as part of its recent buyout of BeAnywhere. MSP Anywhere is available on a per-month/concurrent technician subscription basis.
- Business confidence is up, according to a CompTIA study published this week. CompTIA's IT Business Confidence Index increased 2.2 percentage points in the fourth quarter, a turnaround after two consecutive quarters of decline. Key findings include:
- Sixty-five percent of the IT executives surveyed said their companies are on course to meeting their sales goals of the year.
- Six in 10 firms reported seeing some degree of their customers postponing certain purchases. Customers' willingness or ability to invest in IT products and services was a top concern.
Additional reporting by John Moore.
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