EP174 - Ask Stuart #12 -
Why You Don't Need a Salesperson Now ...Or Ever with Ian Luckett & Stuart Warwick

INTRO

In this episode of the IT Experts Podcast, we are going to share with you in, our opinion why you don't need a salesperson in your MSP... Ever.

Welcome to the IT Experts Podcast, the only podcast to help MSP's scale to 1,000,000 in if already there get to 5 and go fast at the end of the day. Isn't it all about building a business that works for you rather than you for it? I hope you enjoy the show.

IAN

So, good morning, good afternoon, good evening. Welcome to the IT Experts podcast. In this episode, we're going to get quite close to the bone. We're going to get close to the wire today. We've got Stuart back on the podcast, and we're going to be talking about why you don't need a salesperson in your MSP. Ever. Is that right, Stuart?

STUART

It absolutely is. Ever.

IAN

So whether you believe this or not, whether you think this is right or not, we're going to have a look with a crack for the next couple. For 20-30 minutes or so on, and our opinion on what we're hearing and what we're learning about how people have been really successful in their MSP, generating new leads without sales people.

STUART

Yeah, for sure for sure.

IAN

Give us some context here.

STUART

Well, it's you know, we stumble across, not stumble across. We have Ms. Peace talking to us all the time. And they all want more leads, of course you do. You're a growing business, or you want to grow and you've tried different things marketing related, you know, cold calling, LinkedIn, Facebook, leaflets, lunch and learns you name it. You've been trying everything and nothing seems to work. Now we've done many podcasts talking about marketing and various aspects of marketing. But in our opinion, on my opinion today, you don't need a sales person ever. Now this is where I open the brackets and say until you're about 2 million in revenue and upwards and you're truly starting to scale. But below that you don't need a salesperson and you can save the worry, the gray hairs and the 40-50K a year it's going to cost you wasting time trying to get a salesperson to look for you. Because it's not impossible, but for a small MSP sub 2,000,000 if you get your marketing right and you get your client relationship building right and you get your account management right and you get your profit margins and your packaging right, you don't need a salesperson.

IAN

Let me, I'm going to put some data on this nest here. So we've got 100% of our MSPs in our community. So how many of those have a working account management process to maximise relationship in revenue for their clients?

STUART

Yes. If they're more than three months old with us.

IAN

Yeah. And the ones that are under three months old with us, it's forming, forming how many? As a percentage have salespeople.

STUART

Of our entire community, 2%.

IAN

2%, now that's telling, and that's why we're kind of like quite confident behind the message today is exactly what Stuart’s just said kind of around, you know, you get your stall straight, you get the operation straight, you get the business running efficiently etcetera, etcetera and you kind of don't need all this other news cause marketing's news enough as it is. We talk about it enough. We talk about all the different things that are going on. There's some great resources out there’s Paul Green’s. One of them is a good friend of ours and I was wondering if he's listening. I'll find out because I'll send your WhatsApp message or someone will tell him and you know there are others in your wingman. You've got other guys out there who good at good at the marketing and simplifying it for you. But the whole sales thing is even to do cold calling. Do I just do some lists? Do I do, get some people in and just to go around knocking on doors and it's kind of like that whole thing isn't it? But I just wanted to bring in a bit of data just around what, what we know is working with our clients and why we're kind of saying what we're saying today.

STUART

Yeah. And I think the simple piece is sales in the MSP space take time, and as a classic example of one of our quite mature clients that took on a salesperson and I met the lady really, really, really qualified for the job. But she left them after 12 months because she ran out of faith in the process and they said literally two months later, all the work she put in over that year started to pay off, but she'd left because she wasn't feeling successful. She wasn't feeling like she was winning. And sales take long time in the MSP world, and particularly if you're starting from zero, if there's no marketing in place or visibility. So salespeople not just incur you the cost of the salary. You've got this, you’ve go to fund it for a long enough period, assuming that you're building lead generation around them as well, because don't expect them to come in and be able to find their own leads. They'll be able to work with a list of prospects. But are they going to find cold leads and smash out their numbers within 4-6-8-12-16 weeks? Absolutely not. They might get lucky. One month they might bring some business with them possibly, but not be able to consistently generate enough revenue for you to confidently unless you've got the budget put aside for at least a year to allow them to build their own network and start delivering.

IAN

Let's talk about people. The types of people that we have in. You know that we know about, right in in the channel. So, we got generally 80% of MSP business owners right now under 2,000,000 are techies come from a techie background. They said, hey can you fix my computer and then another and then another and then another ten 20-30 before then. Now they've got an MSP quite reserved type of people, very, very technical, got to be right, everything's in the right place, fear of failure and kind of all of this good stuff. You've then got they love to sell they love to or they love to sell. They love to provide they, love to fix.

STUART

Yeah, they're passionate about technology. They'd want to help as many people as they can with technology, that's why I live in business.

IAN

So, they go into their clients and without really knowing it, they probably do some sort of account management, build some relationships and then people buy more from them. We're not selling at this point. They're just saying, hey, that looks like a really great idea. Stuart, I want to buy some more of that stuff or I think I need that, etcetera, etcetera. So we've got this very wholesome, you know, the poor building type relationship, all of that kind of good stuff. And then you have, and I'm going to show my age now. The screening wheels of an XR3I coming around the corner. He got this pitch. He got this picture this white XR3I with red logos on the background and out of it pops. I was going to say Ferris Bueller, but that's not the other thing. Jordan Belfort, with his pen in his hand and this is the typical sales guy. He's driven by, you know, high deal on the on the disc scale driven by results. I've got to get this. I've got to do that. I've got, you know, it's a complete different contrast, isn't it into that. And I'm talking about the typical salesperson here. So if you are in sales and MSP are doing really well, then pound the back great for you. And I'd love to hear your feedback. So kind of get in touch and we'll maybe get let's do a reversal on it and let's spin it around the other way, but you know you've got this sales high driven high energy. Oh, I'm going to sell to you rather than you to buy from me. It's a different dynamic, isn't it?

STUART

And that's Hollywood for you. That's TV shows that, you know, the classic stereotypical image of a salesperson. But sales are so much more refined and complex than that stereotypical example. And yes, it still goes on out there with people doing or calling and trying to stack it high, you know, volume, throw enough stuff at the wall and some of it may stick. But in the MSP space, the technology sale is a grudge purchase. First of all, people don't wake up and think ohh yes, I need some IT support today or I need some more hardware. They have a problem and they need it fixed and overtime they build a relationship with somebody and that person is their go to person, to fix it there. But if that business is growing, they need somebody that's growing with them. And they buy people and challenges that. What allowed you to build relationships with clients and prospects through you isn't scalable. Yeah. And you don't, and because you've never been a salesperson or a sales manager, you don't know how to know how to employ salespeople, manage them or get the best from them and so therefore your expectation is that they're all a bit ego driven. They're all needy. They're all difficult to difficult to get them to succeed. And so anyone that has employed salespeople or account managers or BDM's usually has ended up parting ways with them within three months, six months or nine months and wasted 30-40-50 grand.

So it's not about selling your business. It's about helping people. Buy from your business and I don't want to go down the marketing side because we've done a lot of podcasts about this. I think the reason you don't need a salesperson is because if you do enough work with your existing client. And make yourself a profitable, stable business. You don't have to be this on a wing and a prayer business owner hoping this salesperson is going to come in and save the day in terms of your being able to grow, if you, then, having created a profitable business and you start to understand how to be the marketing director. And sales director of your business, you are the best person. Sub 2 million to sell your business. You know to be the salesperson because we've already been...

IAN

Yep, Yep.

STUART

Doing it, yeah. And the difficulty you've got is leads and a salesperson or BDM is not going to get you more leads. Now the people that we know that have made a success of it have been able to find a rare beast. That is a blend between their marketing implementation person, so they're going networking on their behalf. They're following up on the phone. They are at events where you're sponsoring the chamber or something like that, they're doing business exhibition ever. And they are consistently following up on the leads that they generate. They if you go and do a local business Expo, you'll probably speak to 50 to 100 local businesses out of that, there's probably 10 or 15 that are relevant for following up with not because they're going to buy anything from me, but they're big enough to start a conversation with so you connect with them on LinkedIn, you send them something afterwards, because they've given you your details because they joined your game on your staff. If you had one and they go into your nurture sequence and one or two or three of them actually want a conversation with you, possibly about cybersecurity. Usually about something that they're scared of in their business that you on your stand have made them aware of and you've scratched, you know, opened an itch that needs scratching so that they ensure that they're protected the way they want to be protected because cybersecurity is a great tool for getting the conversation started.

That setup is rare where one or two of our MSPs have been able to get their head round and their budget set aside to support onboarding a BDM over a 12 to 18 month period. But they've already got their marketing in place and they've got a marketing strategy that they are implementing and this person is coming in to augment it, you know to add firepower and add momentum to it. What they aren't doing is coming in and magicking leads out of nowhere and delivering a stack of business, so this is why we are saying, you don't need a salesperson, sub 2 million.

IAN

So what you were just talking about there, in a roundabout way, was building an audience. Okay, building an audience that resonates with you. You get their well, they understand you, you understand them. You understand how your technology can help them and others is kind like some of the some of the marketing thing, but when you've got that audience and you're starting to say, for example, you're going to focus on a niche in hospitality or something like that. How do people then go, because people aren't just going to buy from you, just because you're an IT company or an MSP works in hospitality. You've got to educate them, haven't you?

STUART

Yeah.

IAN

How do, what are some of the most powerful ways that we see where people are helping educate and moving them down that sales pipeline, through their marketing, through their case studies, through their website, through their stories, through their whatever it might be.

STUART

It's just been we've talked about this on the other podcasts. You have just got to be visible. First of all, so one way of doing that is to actually do the old shoe leather trick and be visible in your local network. So if you haven't got the budget to hire a salesperson and we're saying you don't need to, but if you've got the budget, that means you've got between 30 and 50 grand that you're prepared to invest in something. Now you're thinking the Holy Grail is a salesperson. We're telling you it isn't.

We're basing that on numbers that we know. You know what, we know what we experience and what we see. So if you put 30-40-50 grand 3-4-5 grand a month into your marketing and building an audience, as you just said in in hospitality, let's take one example. So buy a list to clean that list, take time to clean that list. Qualify that list. What sort of hospitality companies? How big do they need to be? Where do they need to be? Then what are the problems that hospitality companies have? So create one or two little lead magnets that solve the big problems that they're worried about.

IAN

Answer their questions.

STUART

Whether it be security, whether it be productivity, whether it be automation, whether it be data enhancement to using power to create, to leverage the data that they have in their businesses to allow them to, you know, run the businesses better. There's all kinds of things that you can add value to, and then you've just got to promote it. So using Paul Green stuff, Mike Knight wingman, whoever you're using, you know your own internal staff to get your social media out builds at that, that visibility alongside it credibility because you have some case studies, you'll tell some stories about what you've done in the hospitality industry. We'll out a few clients get and then you'll go networking, possibly you'll run exhibitions in hospitality events. And this takes time and effort, but if you've got that 30-40-50 grand because you think you could have hired a salesperson. That's enough budget over a year to start building some traction, and we've got clients who've done this and over 18 years they have penetrated a niche or a couple of niches and we're starting to build their credibility and they start telling us, hey, so and so contacted me because of this flyer or they their e-mail I sent them, six months ago, or an introductory call I had with them, but the time wasn't right. They're starting to build a funnel, a flow of quality leads. It takes 12-18-24 months, but you're not in this business for like a flash in the pan like and if you think you need a salesperson, you don't. If you're sub 2 million, put it into this marketing. Build the list. Build that top of funnel, build those qualified relevant prospects, and then it's very simple to set up a number of mechanisms we call an enabler funnel to get them to raise their hand. And you're the best person to sell your business. You're passionate about it, you love technology, and if you've been listening to us and you've been building out the functionality of your business behind you, you are now not in the operational side of it. The finance runs itself, it's well automated. The tech team, the help. Maybe you've got a support manager now. Maybe you've got to help this manager now. They're quite capable of onboarding and offboarding clients and everything in between. Your job now is to sell the business.

IAN

So let's talk about data, again, how many new clients does the average MSP need to onboard a month to make a significant, profitable, lasting change to their business.

STUART

It's that old number again. Number 1. If you could bring one new client in, everyone says this. I could just have 1-2 new clients a year of a certain size. I'd be made for life. Yeah, you would be because the MSP model is such an amazing business model, but if you bought 1, whatever your ideal client is, 10 users, 20 users, 30 to 40 users. If you could bring one or half a dozen of those, plus some small ones in a year, the compound effect of that business model, assume you're packaged appropriately and your margins are right, it's just transformational.

IAN

So we need one and we know that most MSPs are pretty good at closing when they've got somebody who knows what they need. And for the presentation, we're probably looking anywhere between 60 and 70% closing rate, so it's pretty good. So every month, if we want to bring that one in this reverse engine, this back and talk about some of the metrics we need two, maybe three. If we're going to be unlucky, 3 good leads into the business month, we're not talking about thousands of people in an e-mail list, hundreds of people. And what I'm trying to get out here is that if you slowly nurture and we talk about building that audience over time using digital marketing using content that educates using a list where you're consistently following up with them with value based content that they care about because they need it. You know, obviously you've got the people who need to buy right now. You've got people who don't know what MSP is and what do I need to manage service. You've got the people who are really spicy right now because they're so Hacked Off with their current MSP. They want to move and then you've got people who are in non contract. So you've got massive amount of education on the first one. Why do I need an MSP? You've got probably a little bit of education probably more credibility, building and overcoming objections in the middle bit with the first one with the second one, with the third one, it's, how do I keep this person warm for a year, 18 months, 8 months, whatever it might be, so that they know who I am when it's time to fire their existing MSP. And you know the ability digitally, online through the web, through podcasts, through, you know, loom videos through follow up through doing something to e-mail, massive aren’t they?

STUART

Huge and all of these marketing platforms effectively are wrapped around technology, so given MSPs are comfortable with technology, if you can understand the marketing principles behind it, it's then a case of stitching together the relevant technology to deliver it. Now the hard piece is the bit that we all go back to and all raise our eyes to the heavens is who's my audience and what do they need? Who are they and who am I? And how are we connected through the needs of technology? That's the hardest piece. And if you tackle that piece, the rest is easy.

IAN

So bringing this to a bit of a bit of a head. So we are now rising to the surface of this pool that every single MSP sales expert has just dunked us in trying to suffocate us. Let's talk about measurement. How do you measure? So you have got a sales function or you've got a marketing, you've got a business development function, a new lead generation function in your business, is what metrics because you've spoken to him, I've spoken to him, spoken to MSP many, many times going. I used to have five sales people used to have three sales people and they all went like, why did they go? Cause it didn't work. So what you doing now? I'm going to get some more salespeople, and it's like, this is insanity. Doing the same thing twice, expecting a different result is that insanity. And I've sort of said or how many leads did they bring in? How many opportunities? How many different middle of funnel opportunity calls came up and when you start breaking it down into the metrics. So if you do have salespeople in the MSP and you're unhappy with it and you're kind of thinking, what do we, how do how do the, You know what, because if you brought an employee and there weren't any good, you come, you just go see you off you go, tada, this isn't working out, but you've got this innate fear that if I get rid of the salesperson, I'm never going to get any new leads. I'm going to be stuck on referrals. My business isn't going to go, yada yada yada. What metrics should we be setting in place for new lead generation activities in the MSP.

STUART

Well, if you're under 2,000,000, get rid of them.

IAN

I know, but if you're doing marketing or you've got a BDM or you've got an account manager or something like that.

STUART

Just to keep this on topic, or if you're under 2 million and your salespeople aren't performing.

IAN

I've got it, okay

STUART

Of course, they're human beings, you know, be respectful. But if they're not performing, then cut the cost and release them to be successful somewhere else and reinvest that money into your marketing. And if you don't understand what you're doing and you're worried about that, go find somebody to help you get your head around the marketing so you can be the marketing director. If you have got salespeople or you trying to measure your marketing, the most important piece is, are you getting leads. Are you getting lead? Are you getting people raising their hand? Saying can I have a conversation that's the primary metric, the number of hits on LinkedIn, the number of likes and. There's some meaningfulness behind it, but they're all relevant. Ultimately, are people raising their hand now before people start raising their hand and you get going, you do have to pay attention to reach. You know, if you're only if you're running a podcast and you've only got, you know, 3 downloads a week, what are you going to do to increase the number of downloads?

Is it the messaging? Is it the headline? You know, those are the metrics you need to consider. So it's like taking it step by step. You start at the top of the funnel and you think, okay bottom of you know, but middle of funnel is where people raise their hand. That's why we talk about making it easy for people to start in conversation a free eBook, lead magnet taking a quiz. Seeing traffic where they spending time on your website, like reading blogs, downloading things, you know, those are those easy ways in which you can increase the traffic to your world's number of connections. Simple thing, how many LinkedIn connections have you got in your niches or your industries or in your local area? That are relevant to your business and if you've brought a list of 1000 businesses that are relevant to your town, then how a really great metric is getting more than 50% of them as #1. You know, managing director connections on LinkedIn, great metric, now you're starting to gain some momentum, right. And the next step is how many people can I get engage in a conversation? Either through direct messaging direct emailing or even cold calling. And I think it's picking that one metric that builds the next step. You know, if you're building a house, you're going to say first what the metric is digging out, yeah. Then it's laying the foundations. You're not starting to start tiling, are you? So let's start there. And so what's the what? What's the next one number to get you. Building the next part of your sales funnel, your marketing funnel, that's really the answer. And the ultimate measure is all you're interested in is, are you getting conversations tentatively?

IAN

Quality conversations, quality needs quality sales to.

STUART

Yes.

IAN

Help scale and grow. You're wonderful MSP.

STUART

Absolutely. And then it feels like life. See, it's amazing when you start seeing this working, but it takes time. It takes time.

IAN

And you pop that on top of the referrals and then you made a really nice.

STUART

Well, yeah. Again, if you've got everything we said at the beginning, if you've got the operations right, the account management, right, the packaging, right, the profitability right, in your business, you'll be getting referrals anyway, but of course they're not scalable or viable, but they are a great amplifier of your growth, but the lead gen will just and the marketing bit for the lead gen, will just amplify him further. So save that 40 grand a year and invest it into your marketing if not, get some help.

IAN

Very interesting topic today. Stuart, thanks very much for that. And if you are interested in how your business is setting up in terms of maturity, how you can align yourself to some of the methodologies for growing your MSP profitably as we talked about account management talked about operations and we talked about sales and marketing quite a bit as well. And then look to pop over to the mspgrowthhub.com and hit the button where we've got the MSP mastery quiz and in just a couple of minutes you will be able to check in the maturity of your business, get yourself a free report on what you need to do in relation to the three pillars to MSP growth success. You absolutely love it. It's there for the taking. Go and do it. Go and learn from it and if. You need a hand of anything. You know where we are in the meantime, thank you, Stuart, for that episode. I sure would love to see you soon.

STUART

Thank you.

OUTRO

So I hope you enjoyed the show if you did, I'd love it if you could leave a rating and review on your favorite podcast platform. If you want to know more about how to take your MSP to a million or if you're already there go faster. Then come and join Stuart Warwick and myself in the scale with confidence Facebook group the link is in the show notes. You go enjoy the rest of your day and I look forward to connecting with you soon.