Simply put — sales scale MSPs. If your sales team has good salesmanship and focuses on customer success, your business will evidently scale. To determine whether you’re scaling at a good pace, take a deeper dive into your customer base. Once you do, you will discover there are ways to adjust your MSP’s momentum to fit your overall needs.
To assess your MSP’s momentum, ask yourself three questions. Each one revolves around an essential yet obvious component of your business: your customers.
How fluid is your customer base?
Examine your customer base to determine its fluidity. Years ago, a customer would stay with an MSP for at least 10 years. Now, customers are on the move — always looking for the next best thing. They’re searching for ways to improve their businesses and reduce IT costs. If you can’t save or make your customers money, you’ll become yesterday’s news in no time. The good news is changing customer behavior works in your favor, as long as you’re willing to put in time.
Consider this: The majority of your customers will be with you for less than five years (think about the 80/20 rule). How can you protect yourself from on-the-move customers? First, ramp up your marketing efforts. The more leads you generate, the easier it will be for to replace your short-term customers. Second, continue building strong relationships with your customers. Get to know them on a deeper level. Find out the challenges they face daily and know about their business. Be sure to keep open lines of communication with all your customers — not just a few.
What does your sales pipeline look like?
It’s one thing to generate leads through marketing – but they are only useful if you nurture and work them through your pipeline. How much time are you spending nurturing and developing leads? As an MSP owner, you should be committing the vast majority of your day to working on sales opportunities, nurturing customer relationships and developing new services. Ninety percent of your day should revolve around marketing and sales. Hang up the techie toolbelt and focus on the overall vision.
There are ways to offload your responsibilities. For instance, you can automate some of your responsibilities. So actively look for tools that can help free up your day. Make sure though you don’t let your techie self spend too much time playing around in new tools! Learn wheat you need and then delegate it to someone else.
You can’t automate everything – nor should you. But you can outsource a lot of other more complex work. One of the biggest drains on owners is the helpdesk. The last thing anyone wants to be doing is working 24/7 because you have to be there when your customers need you. Outsourcing your helpdesk to someone like Benchmark 365 gives you back your weekends and time to focus on growing your business. It’s an adjustment for sure and you need to partner with someone who can provide a wholistic service. You also need to learn to let go. With any change in your business some of your customers might not like the disruption or not being able to deal with you directly. The key is to hold firm and keep your eye on the prize of having the time and resources to build the momentum in your business.
Are the majority of your customers growing businesses?
Ideally, the lion’s share of your customer base should remain fairly stable. This portion of your customer base is made up of “safe” customers that are growing healthily and either are a secure bet for what you currently provide them and/or represent up sell opportunities. These ones will pay for your income, wages, rent and infrastructure. The remaining revenue should be reinvested in on-boarding more customers and sales and marketing. Of course, newer customers have more risk – you don’t know them and they don’t know you. So you need to make sure your on-boarding is first class to give this new batch the best chance of sticking.
Don’t be afraid to fire customers that suck more time than value generated. It can be hard but it’s worth taking a hard look at your book and pinpoint who are your best customers and best opportunities. Make sure your focus is on them. If that means some others need to go by the wayside then make the choice based on what’s best for your business momentum.
Your customer base determines your momentum. Review your customer base on a regular basis to determine whether there’s room for improvement. Take note of how long customers have been with you and decide if you need to increase marketing efforts, examine your sales pipeline to figure out if you should be devoting more time to sales, and assess whether you’re doing what you need to do with the customers you could afford to lose.
These aren’t always the easiest things to do and it can help to hear from other MSPs about how they make it through. As a Benchmark 365 customer you get access to our Weekly Partner Forum – a unique opportunity to task within your peers about getting their momentum into your business and growing successfully. Talk to us today.