One of the biggest challenges facing managed service providers is that they like to sell by focusing on the technology, instead of the business aspects of the sale—i.e., the results and the savings the services will bring to the prospect. The problem, said Stefanie Hammond, sr. channel sales specialist at SolarWinds MSP, is managed services is 100% a business sale unless you are looking to augment an internal IT team. “When MSPs try to make it a technical sale, they tend to fail at selling managed services because managed services is intangible,” she explained . “It is not a piece of hardware that you can point at and discuss the technical differences with other hardware. It is about ensuring their business needs are met in an efficient and cost-effective manner.”
Stefanie explained that, as pricing strategies change in the market place, MSPs are being forced to evolve how they sell. “How many prospects do you talk to who say they don’t have an IT budget?” she asked the audience. “The reason they say this is because they don’t know where to start, they don’t understand all the components of the services required, from day-to-day management and monitoring, right the way through to project work.” On top of this, she went on, how do they evolve their use of technology? If their hardware is reaching the end of its life, should they replace it on a cap-ex model or move to a virtual infrastructure potentially on an op-ex model? If it is the latter, you can start to define new strategies for budget development and adherence. Furthermore, she explained, the market is increasingly looking to a per-user pricing strategy, which takes away the concept of selling by device and allows a business owner with very little experience to easily define the costs per user in their mind. This changes the psychology of the sale and simplifies it.
Stefanie said the question MSPs actually need to be asking themselves is, “What should my sales process look like in order to overcome these challenges?”
Before deciding on a sales process, Stefanie said it is best to understand whom you are selling to, but understanding the ideal prospect is where many MSPs struggle. “A proven method for defining your target market, or ideal prospect, is to look at your existing base to discover who your best customers are. These are the ones you want to model off of,” she explained. Also, she suggested MSPs need to look at any verticals they have experience with that they might be able to target further. “Moving into vertical specific markets will take time to penetrate, but once you have they are very lucrative,” she said. “Generally, it’s not recommended to have too many verticals you service, but having two or three will help you standardize your messaging and support structure.”
This is the traditional approach to a solution sale, she explained, and there is nothing wrong with this process. However, as the market evolves and it becomes more about the end user, we need to tweak this slightly. The fundamentals at each stage still hold true: you need to generate leads to identify qualified prospects, book a meeting to do further qualification, perform your assessments to garner empirical evidence, and deep dive into the customer’s environment.
“These findings then get translated into business value to develop your proposal and allow you to define what level of service offering is required and ultimately close the deal and implementation it,” Stefanie said. “Looking a bit deeper though, you can see that the assessment phase is very important because this is where you start to define what solution is a right fit for the customer.”
Between what you learned from listening to the customer in qualification and what you learned from your assessment, this is how you can identify which program will fit your prospect. Is all they need a couple of à la carte line items? Do they have a need for the holistic management that a proactive program can provide? Do they just need a little consulting or some security services? Your job, as an MSP, is to identify the best fit for your prospect and gain their trust by showing you understand their needs and are looking to solve their problems.
“Try to shy away from providing an optional sale, whereby you lay out several different options and work with them to choose one,” she warned. “When you do this, a prospect naturally moves to the lower to mid-range option and you may not be meeting their needs. By giving them the choice, you have basically given a non-technical buyer a technical decision to make. They will most likely choose incorrectly and the result will be you not supporting them the way they need you to. You are the trusted advisor and expert, from the stages of the sales process you should be able to define down to the prospect’s best option and show them why your suggestion meets their needs.”
From here, Stefanie went on to look at the barriers to the technical sales, the requirements for successful positioning, and ROI before going to look at the fundamentals of the MSP sales process.
“Sales is an art,” she said. “It is an art in that it requires finesse and understanding of how to evolve the sales process in real-time as you are dealing with prospects or existing customers on up-sale and cross-sale opportunities. There is an adage that everyone wants to buy but no one wants to be sold. This is very true, and the more a salesperson understands this, the better they can align their structure and strategy to positioning their offerings.”
Stefanie concluded by saying, “I talk to MSPs on a daily basis worldwide, and I consistently hear ‘I’m not a salesperson,’ but you got to this point, so you do have sales ability. The bigger question is how do you harness and learn from this? Don’t discount yourself; you may garner the majority of your new customers via referral but that is just a warm lead, you still had to sell them to get them on board with you. Reading and educating on sales is key, it will help you to understand how to turn what might be a technical sale today, into a value-based business sale tomorrow. Those MSPs who work on this and have developed this process don’t typically run into pricing objections; they don’t have to discount to win a deal and are able to hold true to their pricing because they sell on value and the results they deliver. That in itself is a massive differentiating factor for them over the competition.”
As you meet with the prospect during multiple phases of your sales approach, you need to listen. As the old saying goes, you have two ears and one mouth for a reason! You don’t need to continually justify who you are and why they should do business with you. The findings you present, the savings you can bring, the ROI and so on, will naturally do this for you. The more you interact on their level, the more you are building a relationship… and relationships go a lot farther than a sales pitch.
If you want to find out more about the content of this session, check out Stefanie’s webinar in the MSP Institute’s Business Training tract. Click here