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Home Blog MSP Business Using the "Goldilocks Score": Five essential sales metrics, Part 2
MSP Business

Using the "Goldilocks Score": Five essential sales metrics, Part 2

By Mike Schmidtmann
18 May, 2015

Part 1 of this article showed you the five essential sales metrics for your management dashboard win the growth game with this scorecard. Now, we’ll dig into what the metrics should be for your business.

Just-RightTo make this more tangible for you, let’s introduce another metaphor, the “Goldilocks Score”. You’ll remember the old Fairy Tale with Goldilocks and the Three Bears.  Goldilocks was confronted with assorted choices like porridge that was “too hot, too cold, or just right.” We’ll do the same thing with your sales metrics.

Net new appointments

This is by far the most important metric to determine how well you are uncovering new prospects. Many MSPs rely on Word of Mouth advertising, and this is generally not enough to generate the growth they want, at least not consistently.

The number of new prospects you need will depend on how large they are. Obviously, if you are targeting under $1,000 per month clients, you’ll need to make a lot more appointments than if you are targeting accounts over $10,000 per month. For the purposes of this article, I’m going to set targets for those selling in the $1,000 - $5,000 per month range.

Goldilocks Score:

  • Too Low – Fewer than five New Appointments per month
  • Too High – More than 20
  • Just Right – 10 – 14

Proposals

Not enough proposals, and you can’t possibly win enough new business. Too many proposals, and you are probably throwing spaghetti against the wall. Proposals take time to research and prepare, so don’t deliver a proposal unless the prospect is strongly qualified.

Goldilocks Score:

  • Too Low – Fewer than four Proposals per month
  • Too High – More than 15
  • Just Right – 6 - 8

Win percentage on proposals

Win too few, and you are wasting time and energy. When you win too many, you are Order-Taking, and probably underpricing your offers.

Goldilocks Score:

  • Too Low – Less than 20% of Proposals Convert to Sales
  • Too High – More than 80%
  • Just Right – 30% - 50%

Average size order

The Goldilocks Score here will depend on your business model. Many successful MSPs have set a minimum size customer of $1,000 or $2,000 per month. In any case, select your “sweet spot”, and enforce the discipline to stick to it. The most successful, most profitable MSPs know their capabilities and focus on the best prospects for their business.

Goldilocks Score:

  • Too Low – Under $1,000 per month
  • Too High – Over $10,000 per month
  • Just Right – $1,000 - $5,000 (for this example)

Time from proposal to close

In sales, time is of the essence, and every day your proposal doesn’t close, your chances of winning the sale decline. Therefore, in this case there is no “too fast”. Goldilocks only has two alternatives!

Goldilocks Score (per month):

  • Too Fast – The faster the better
  • Too Slow – More than 60 Days
  • Just Right – Under 30 days

“Success is a statistical event”

When all five of your Goldilocks Scores are “Just Right”, you can’t help but grow your company consistently and profitably. You’ll find new prospects every month and close them quickly with juicy MRR and margins to you.

Do this, and, as they say in all Fairy Tales, you’ll live happily ever after!

MAXfocus offers free marketing materials, sales tips and advice to all MAX customers with our Building Blocks program, designed specifically to help you sell your services. To find out more why not sign up for a free trial?

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