Many MSPs aren’t growing to their expectations because they are breaking fundamental rules of sales and they don’t even realize it! How can you break the rules when you don’t know the rules?
Here’s a metaphor to illustrate this problem and the solution. Imagine playing golf without a scorecard. Now imagine playing without knowing what “par” is for each hole. Wouldn’t that be a bit odd? Disorienting?
Your score in golf is always compared to par. If you shoot a “4” on a hole, you don’t know how good that is until you know what the par is. It could be fair, good, or great depending on whether it’s a par 3, 4, or 5. Of course, if you post a “Snowman”, (an 8), that’s bad no matter what the hole is!
Many MSPs play a version of this game with sales. How do we know if we are shooting bogies, pars, or birdies? Below, you will find five invaluable metrics that should be on every MSP’s scorecard.
The most important “Leading Indicator” of sales success will be initial appointments with new prospects. Some salespeople seem busy all the time, but don’t get anything done. If they aren’t talking to new prospects, they are spinning their wheels. Being busy doesn’t get you paid. Finding new customers does. This metric will measure just the new opportunities entering your pipeline.
You won’t make a sale without a proposal, so this metric is obviously important. You’ll want to know the number of proposals, the size, the type of solution, and the kinds of prospects. This metric is most useful when evaluated together with the next two metrics. Proposals take time to research and prepare, so don’t deliver a proposal unless the prospect is properly qualified.
A low winning percentage on proposals is obviously a problem, because you are wasting your time and the customer’s! But a too-high winning percentage is bad, too. Why?
The right size order will depend on your business model, but it’s very important to track. Many successful MSPs have found it takes time and effort to on-board new clients, so they’ve set a minimum size customer of $1,000 or $2,000 per month. Others shoot for $10,000 per month or more as their target. Find the “Sweet Spot” for your business, and stick to it. That means occasionally saying “NO” to opportunities either too big or too small for your business.
There are two contradictory sales trends going on at the same time. Cloud sales are closing faster and big complex projects are closing slower than ever before. Track your time from proposal to close carefully, and take notice if the expected close date keeps getting postponed. If your small MRR proposals are taking longer than a month, you are doing something wrong in the selling process. If your larger opportunities are hanging around forever and not closing, you might need to re-construct your sales approach,
Your management dashboard should be tracking these five metrics every month. If you aren’t gaining consistent results, you can bet there’s a clue in these five metrics that will help you correct the problem.
Consistent sales results come from the skilled execution of simple sales steps. When you and your salespeople uncover enough new opportunities and pursue them with the right sales process, you will win new accounts and grow your business.
Now that you have the five metrics for your sales dashboard, we’ll move to the next stage, which is determining what your target results should be. The "Goldilocks" score - Five essential sales metrics, Part 2