Do you work at, own, or manage an MSP (managed services provider business) or IT consulting business?
Are you always on the lookout for new ways to improve your marketing, sales, business development, and customer success results so you can grow your business?
If so, then you’ll definitely want to watch this recording from a webinar that we held a little while back on How Managed Services and IT Consulting Firms Accelerate Inbound Revenue Generation.
MSPs and IT consulting firms often face a variety of business development challenges around finding clients, retaining those clients, and growing revenue.
Just a few short years ago it wasn’t quite this difficult. It was a different environment.
And it made sense for MSPs and IT consulting firms to use a lot of outbound, traditional, interruption-centric marketing to get in front of the right decision-makers. But those days are long, long gone.
Now, nearly as much as 70% of the buyer’s journey, or 70% of the sales cycle, is often over before you even get a chance to have a conversation with a potential client.
By watching this webinar recording, you’ll learn the answers to some of the biggest questions on what you can do to improve your inbound revenue generation.
We’ll talk about lead generation, especially how to find the right size quality leads that match your growth goals, and the ideal client profile.
We’ll look at how you can become better at finding clients and closing sales (especially the right size quality clients). And then we’ll arm you with some best practices for growing the business as a whole.
If you find this webinar recording content helpful, please make sure that you hit the Like button, subscribe to this channel, and ring the bell, so that you can be notified when new content similar to this becomes available.
Now what we hear so often from sales managers, marketing managers, business development directors, and even CEOs in the space is that every single deal comes down to price. And we hear these words pretty much verbatim. Every single deal comes down to price. The frustration boiling over is, “I can never get in early enough to explain our real value.”
And we hear the frustration boiling over to the point of, “This totally sucks.” It's no fun when the only thing that you're able to get people to pay attention to at the tail end of the sales cycle, because that's when you first meet them, is your price. And that's not a good place to be.
We're going to be talking today about how you can completely change what you're doing and make sure that you are getting in there early enough to explain your true value, to be perceived as an educator, to be perceived as helpful, and to be perceived as a thought leader. Where does this all start? It starts with understanding the buyer's journey. And the buyer's journey is very different today than it was as little as five or 10 years ago.
In 2005, marketing invested in lots of things like trade shows, print advertisements, trade journals, and magazines -- including direct postal mail and renting lists and sending emails. So the people on those lists, even if they didn't want to get your emails, we know the four-letter word that describes that kind of email, which is spam.
What also jump-started the buyer's journey or the sales process early on about 10 years ago was a lot of cold calling. Then about 10 or 20% into the buyer's journey, 10 or 20% into the sale cycle, prospects were ready to speak with your sales team. It was a very different relationship between your prospects and your sales department.
Buyers were mostly at the mercy of your sales team, and sales controlled access to almost all information.
There was tremendous asymmetry as to who held the cards at the time. Marketing could be unaccountable, and in a lot of cases, it was, but it didn't matter that much. It was also a very seller-centric sales cycle.
Fast forward to today: marketing is still doing a fair amount of trade shows and are even doing a tiny amount of print ads that have mainly fizzled away. Many trade publications either disappeared or are a skeleton of what they once were. Direct mail, the idea of renting mailing lists and spamming the heck out of people, is still alive and well.
It's amazing. It's still alive, and well, Google just filed a patent a couple of days ago. They put another nail in the coffin with being able to tie email reputation to your ability to rank in search engines.
To a certain degree, in the managed services space, it still is a practice that's being done.
However, today is very different in that your prospects are no longer going to speak with your sales team early on.
They're much more empowered. They have a lot more research ability. They can get a lot more information. So when you look at prospects being ready to speak with your sales team, it means that anywhere from 50 to 70%, sometimes as much as 80 or 90%, of the buyer's journey is over.
It's an entirely different ball game, and what disrupted this traditional playbook? The rise of search, the rise of social, mobile, and cloud. Massive disruption from those four factors alone changed the entire dynamics of the sales process.
So at this stage, sales needs to be found much earlier in the buyer's journey so that it can plant its seed in the ground, plant the flag in the ground. And marketing has a lot more control over sales paychecks, and a lot of sales professionals realize that.
So much of the education, so much of the resources, so much thought leadership is happening in the first 70% of the journey. So the way sales is changing, sales needs to be found much earlier, and salespeople be perceived as trusted advisors. It's a very buyer-centric sales process. It's completely turned the whole funnel on its head.
The sales monopoly on information is long gone. And now most of your prospects expect that your sales professionals can deliver a highly personalized, highly customized conversation; more of a consultation than a static pitch. This is a complete game-changer. And it's crucial to realize that this is not the future.
This is the present, and this is the present that has existed for the last two or three years. Let's fast forward now into what it's going to look like. One to three years out from now, sales and marketing departments will disappear as separate siloed departments. They will be forced into working together as one solid revenue team.
We're already seeing this happening, even in my network of IT consulting marketing professionals. We've seen two of these happen just in the past couple of months. A marketing manager was promoted to sales and marketing director, and a sales professional was promoted to VP of sales and marketing.
So you see that get unified. There's one person responsible for revenue and making sure that marketing is working on activities that grow the revenue, and everyone's aligned around the same revenue quotas. Now marketing, one to three years out from now, will own 70 to 90% of revenue generation. 70 to 90% of that buyer's journey of that sales cycle will be over when your prospects are ready to engage.
What's adding even more gasoline to that? Podcasting is going to become a lot more mainstream. You're going to see people listening to podcasts in cars a lot more easily as the technology and the big automakers will make that more accessible. And streaming video is going to grow even more than it is right now.
Live video and things like that are going to continue to grow.
Personalization is when things become even more critical. And at this stage, one to three years out from now, the sales professionals that have survived as order takers, and the sales professionals that have survived as explainers are going to go away.
The ones that will remain will indeed have to be consultants and thought leaders. And that is who will dominate the sales profession for IT managed services. Is your leadership in denial about what's changed? Are they burying their head in the sand?
Here's a basic keyword tool showing how many people a month in the U.S. are searching for the phrase data center: 8,100.
For many people who are listening to this, your website may not necessarily have the authority with Google to go after a term that's so broad.
Typically you'd go after something a little bit longer, a little more specific, and have a better chance of being able to work up to that. But there's an enormous amount of demand out there for people searching for these terms. And remember, if you don't get found in those first 10 results, if you don't make it to page one, either organically or on a paid basis, if you're not able to crush your important search terms, it doesn't even pay to show up.
Getting found before that 70% point, the moment of truth, is critical to competing in today's managed IT services market. The way to do so is by investing in creating, at scale, helpful, original, and remarkable content. This will lead to real differentiation as we get into more of the Q & A section of today's webinar.
You're going to see that trend coming up over and over again as a challenge and frustration. Among biz dev, sales, marketing, and executives, the managed services space struggles to differentiate. And it's not a matter of you saying you're differentiated. Your buyer persona, your ideal clients you're going after, must agree that you're differentiated.
It's like going out to shop for a car and the car salesman saying, "Trust me, I'm honest."
You can't say that. You're not the one who gets to decide whether you're differentiated. It's the marketplace, the ideal buyers that you're going after, that make that decision.
So the question is, is your company on board or living in 2005?
The next section is creating scalable, predictable revenue growth. And as we can see from our next slide, here is a quote from W. Edwards Deming, who said, "In God we trust; all others must bring data."
Yeah. That's pretty powerful stuff here.
We break revenue acceleration, or sales cycle acceleration, down into four distinct phases. Attracting, converting, closing, and delighting; attracting the right strangers to your website, turning them into visitors, converting those visitors into leads, how to close those leads into clients, and how to deliver clients into promoters and evangelists.
They fuel the cycle and bring you more strangers. You must be showing up in all boxes on this. Often, I use the baseball analogy for those of you that might be fans of baseball. And suppose you think about the players that typically go out on a baseball field. In that case, you have your outfield, you have your infield, you have your pitcher, and you have your catcher. For example, the Yankees showed up in Boston at Fenway, and the Red Sox had all 25 of their players ready to go.
But for some reason, only two players from the Yankees showed up. What would happen to the Yankees' chances of winning? They'd be completely decimated. It doesn't matter. They could have their best starting pitcher. They could have their best catcher, their best position player. But if they only have two players, and the other team covers all nine positions on the field and has another 16 ready to go in reserves between the dugout and the bullpen, it would be tough to compete.
Along the same lines, if you're not covering all of this, you're just doing a little bit in the “attract” phase of getting visitors to your site, and you don't have good conversion paths that are optimized for your ideal clients. If you don't have conversion paths optimized to get people to reengage when they're further along in the sales cycle, it's going to be a problem.
If you haven't thought about what it's going to take to convert and close more of those leads into clients, it's going to be a big problem. If you haven't thought through a strategy for delighting your clients, because in a recurring revenue-based business like most managed service providers are, let's face it, it's not about getting them signed up. It's about making sure that they're happy so that they stay and that they eventually may be able to upsell. You may cross-sell, and eventually, a small percentage of them will become your promoters and evangelists.
The flip side is if you altogether drop the ball, they become negative evangelists, negative promoters, and in the age of Yelp, Amazon, and Google reviews, that's a dangerous proposition too.
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So if you want to create scalable, predictable revenue growth, keep all four of these boxes in mind.
Remember, people buy from people that they trust. I can't overemphasize that enough. The moment of truth for self-evaluating all of this is to look at your website, starting with your homepage, and look at:
Think about during that first. 50%, 60%, 70%, 90%, the early stages of that buyer's journey, which is a significant percentage of the buyer's journey today. During this first 70% or more of the buyer's journey, even your best prospects, won't care about your services until you have established a trusted advisor status with them.
That is such an important mindset shift. It’s so critical. And we see so many managed service provider and IT consulting firms completely dropping the ball on this, where nearly all of the content on their homepage, almost all the stuff they're sharing on social media, is salesy, self-promotional stuff.
It's not providing helpful educational content. It's not providing valuable resources in the eyes of the small sliver of the market that you want to stand out in as the best teacher in the world, as the best communicator in the world, about what it is that you do.
The first section we're going to start with is the “attract” phase. And our first question in the attract phase of the buyer's journey is how can we differentiate ourselves from our managed services competition and still be seen.
Can you differentiate your company from managed services competition and still be seen? That's an awesome question. It cuts at the heart of a lot of what we're talking about today. The first thing is to figure out: Why do you exist, and who are the ideal clients you're trying to attract? Once you have an idea about who your best clients are, that usually informs who the ideal clients are.
Maybe it's as simple as going into your accounting software and sorting by revenue or sorting by profitability and figuring out which clients you'd like to clone so that you'd have five or ten more of them and studying the heck out of not only those clients, but the decision-makers in those companies.
The process of understanding this is called building a buyer persona. A buyer persona is a semi-fictional representation of an ideal client, and many things are somewhat demographic but mostly behavioral.
What makes them tick, their goals, their plans, and their challenges? What's keeping them up at two o'clock in the morning? What are some of the things that can cause them to get promoted at work? If they do a fabulous job, what are some of the things that can cause them to get fired?
Where are they hanging out online? Where are they hanging out offline? What do they secretly desire the most from an MSP or an IT consulting firm like yours? How do they evaluate, and what kind of experience are they looking for from an MSP or an IT consulting firm like yours? What are they searching for when they go online on search engines? All of these things are hugely important.
And when you start to see some commonalities between people you're studying, sometimes these are done by in-person interviews and phone interviews. Sometimes it's looking at what they say on social media, what they say on search. Once you put all this together and start to see commonalities, you can group them into buckets.
And you have the beginning of a buyer persona. So a buyer persona again is a semi-fictional representation of an ideal client for most small and mid-sized managed service providers and IT consulting firms. Having much more than three or four is a massive undertaking. In some cases, you could start with as little as two. And what you may also find, as you begin to research, is that you may have thought that you have multiple personas, but they may collapse and consolidate into one.
The big thing is, no matter how long you've been in your business, you are not your target market. You're not. This can't be based on guessing. It has to be based on actual research from real clients and prospects. Once you have an excellent handle on these buyer personas, they will inform everything with how you differentiate your firm.
It'll inform everything you do with your content strategy to create blog content, make videos, and develop SlideShares. This will also tell you where you should hang out online, which social media channels you should visit, and if you should hang out offline.
Where are they? What trade shows and what conferences they go to more than likely will also give you ideas on your product management issues, as well as what kind of services you should be providing and how you should bundle them together. Pricing guidelines and other alternatives they're looking at are a crucial part of getting the differentiation right.
The personas will also inform who's qualified, who's not qualified, how to segment your leads, and how they're going to navigate the buyer's journey between when they first learn about you and become a lead to the point where they ultimately become a paying client.
For your sales team, identify whether someone is a good fit for a potential client or not. Because if you've been in this business more than a couple of years, I'm sure you've experienced your fair share of clients that you've had to fire. And wouldn't it be great if you could knock them out of the sales process before they ever torture your employees?
To differentiate, invest in creating buyer personas and then use those personas to become the best gosh darn teacher on the planet to explain what you do and getting your subject matter experts out there, front and center. So your website and your content become an extremely helpful resource to strangers who haven’t yet heard of your company.
For this example, we'll use part of the San Francisco Bay area.
That's an excellent question. We see that as something that plays out all the time in the MSP community because most MSPs are relatively small.
Most of them are local. Some are regional; some grow to be national companies. But a lot of them focus on a small geographic area. And a lot of the approach to attracting the right kinds of clients comes down to what we're doing: building a buyer persona for each of the ideal clients you want to attract.
If, for example, you wanted to attract CFOs of a financial services company or directors of sales of media companies or accounting firms that specialize in some other area, whatever it is, by studying who your best clients are and look at prospective, potential clients that are very similar to theirs and build these buyer personas.
You're going to get a clue as to what makes these folks tick and if they're all clustered and within the same part of the San Francisco Bay area. You should start to see similarities about what's keeping them up at two o'clock in the morning, what they're worried about, and what can get them promoted, what can get them fired, where they hang out online, where they hang out offline; and this should inform your content strategy.
So there's a pretty good chance that if you're trying to attract potential clients in a specific geographic area, a lot of what you're talking about, whether in your blog, video, podcast, or social media, you need to take that geographic qualification element into account.
It's extremely important, but many people don't realize it. You shouldn't just talk about technology issues because chances are, the ideal clients you want to attract care about a lot more diverse issues than only the platforms, systems, and technologies you work with.
And there's a pretty good chance that if you want to catch their attention in a way that attracts those strangers to your site, you may have to go a little bit broader and write about issues that have a little more general application to their broader business interests, not just the platforms and the technologies that you work with.
Consulting leads. When we look at a typical managed service provider’s or IT consulting firm’s website, there are typically only one or two, maybe three at the absolute most, places on the entire website where somebody can raise their hand. A hot prospect that says, yeah, I want to become a lead. There's almost always a “contact us” form. There's usually a request to quote or request a demo or something like that.
But that's usually it. And the problem with having only those one or two or three different places where somebody can raise their hand and say, yeah, I'm a hot prospect, I want to talk to someone. But that format completely ignores everyone that isn't sales-ready, if you think about it. A typical prospect of yours who is looking on the website is usually either in the awareness stage and just starting to do research, or they're searching for broad-based problems.
If they're in the middle of the sales funnel and they're in the consideration stage, they're starting to compare different solutions. You look at things like ROI calculators or comparison grids; different things help them better define what it is they're looking for. Maybe it's webinars like this that answer questions towards the end of the sales cycle, the decision-making phase.
That's when they're ready to raise their hand and request an assessment, request a consultation, request a demo request, a test drive, contact us, request a quote, right? So if you have things that are for the decision-making stage, we're going to go back to the car analogy. You went into the car dealership, and it was your first time there, and you didn't know much about their models or makes or prices or anything.
And you thought maybe, okay, I'm just going to learn a little bit today. I'm just going to maybe take one or two cars out for a test-drive. And the salesperson approaches you and says, “Hey Jen, which car are you leasing or buying today?” And what do you say?
"That's very presumptuous. I haven't even driven one yet. I just came to look."
"So you are leaving with a car today, right?"
"I don't think so."
"Which car are you going to be buying or leasing today?"
"I think I'm done here." And this is what happens on your website if that’s the only thing that you have available, if you're ignoring like 80 or 90% of people who could be good leads but aren't yet ready to commit today.
So you need premium content that goes behind landing pages that appeal to people early on, who are just starting to do research. eBooks, special reports, checklists, and buying guides in the middle are some of those tools we were talking about that help prospects compare different options, and then you can guide them to that last decision-making stage.
But you ignore that first 80 or 90%. Why are you leaving a lot of opportunity on the table and turning a lot of people off? You need to have premium content, landing pages, and calls to action that are relevant for where they are in the buyer's journey. But it's also essential to recognize that different buyer personas care about different things.
The CFO of the financial services company cares about different things than the partner in the CPA firm. And the CPA firm partner cares about different things than the sales director at the media company. And if you try to talk to them with a single voice there, it's just not going to resonate.
It's as if you have invited a whole bunch of sales managers to a CPA conference or a whole bunch of CPAs to an engineering conference; it just wouldn't resonate. It's crucial if you want to generate more leads that you have lead generation content or premium content that appeals to different buyer personas and appears to appeal to where they are in the buyer's journey.
If you're targeting three different buyer personas and three distinct stages -- the awareness, consideration, and decision-making stages -- you have to fill nine boxes. And the better you are at filling those nine boxes at the absolute minimum, the more you're going to be able to scale up your leads.
So more landing pages, other things being equal, typically equates to more leads. But those landing pages should be targeted to the interests, pains, and challenges of your buyer personas. And they also need to be targeted towards where that person is in the journey of evaluating an MSP or IT consulting firm like yours.
Ultimately, we want the leads that convert, that are marketing qualified, that match up on geographic and size issues. And we want the marketing qualified leads that will be more likely to be more receptive to your content and become sales-ready to pass to your sales team.
And we want those sales-ready leads where a significant percentage of them become opportunities and ultimately clients, and not just clients, but profitable clients. There are many interim metrics to look at to make sure that we're focused on lead quality. It does all start with buyer personas, though, in terms of quality.
Generally, the higher the perceived value of your premium content offer that's advertised on a landing page, the more information you have the right to ask. So, in other words, like when we do a simple one-page checklist for a client or ourselves, you can request a couple of fields. A 30-page eBook or a 100-page eBook has much higher perceived value than a one-page planning checklist.
And you earn the right to ask for more information. If you're inviting people to a one-hour webinar or a lunch and learn or something like that, you are in the right to ask for more information. If you're doing something highly personalized on a one-on-one basis, a needs assessment, consultation, or an IT audit or something like that, you earn the right to ask for more information. So generally, your ability to ask more qualifying questions goes up as the perceived value of that goes up. Asking those questions, too, is hugely important in helping you segment the leads because the first cut on the leads is, are they qualified or not?
And by asking the right kinds of questions, you can determine that without necessarily having to touch every single lead. And then by the responses they give you, you bucket them by buyer persona or where they are in the journey. So the right quality starts with understanding your buyer persona and having valuable enough content on those landing pages.
You earn the right to ask for certain kinds of questions and can still have a decent conversion rate. But it needs to be focused, not just on quality but also on quantity at the same time. One other side issue that we're going to talk about in a few moments is the idea of having goals.
Having more leads isn't enough. We need to be specific about how many more leads we want. Do we want 10 qualified leads a month? 50? 100? And it's not just about being specific. We have to have a way to measure it.
It has to be something based on historical performance, something that we have a likelihood of being able to get to. It has to be meaningful and relevant to your company's overall mission. And it has to be tied to a deadline. It has to be something where we say, okay, right now we're getting one lead a month.
We want to get to the point that we're getting 10 marketing qualified leads a month. You put that date in your platform, your software, your calendar, and you hold yourself accountable to it. Everyone can say, I want more leads. Everyone can say, I want one hundred qualified leads, whatever it is.
But if you don't give yourself a deadline, how do you know that you're working towards it? So again, to generate more of the right quality managed service leads, invest in and create buyer personas. Make sure you have great premium content that's available for those buyer personas.
That's sitting behind landing pages. Make sure you take into account the journey so that you are not the obnoxious car salesperson that only wants to talk to you if you're ready to buy today, and make sure that you're holding yourself accountable to goals.
The image up there probably gives it away a little bit. It's looking at these, this content that you're creating as assets. It's not an expense. It's assets, and these assets help you create leverage. What do we mean by this? On a typical month, 60 or 70% of the leads that we generate on SP Home Run’s website come from things that we’ve created in previous months.
And it's a very similar experience across the board with most of our clients. The overwhelming majority of leads generated in a given month don't come from the efforts of what they're doing today, but it comes from what they're doing today, plus what they did the month before and the month before that, and the quarter before that, and the year before that. As long as the content is reasonably evergreen, everything builds on top of each other. A Warren Buffett quote pretty much encapsulates this whole thing: someone is sitting under a tree today because someone planted the seeds long ago.
If you only look at what you can get out of this immediately following that, you have an immature attitude of needing immediate gratification. This will not work, and it's that procrastination and the need for immediate gratification gets people in a lot of trouble because they rush off and buy clicks at $10, $20, $40, or $50. Sometimes as much as $75 or $100 a click in desperation to get traffic to their website.
But if you're buying pay-per-click advertising and you don't have good persona-specific landing pages, you may as well go to the ATM, take out a pile of hundred dollars bills, and feed those hundred-dollar bills through the shredder.
And then, on top of that, once you've depleted the $5,000, $10,000, whatever it is that was in your budget to play around with pay-per-click, and you've got all of two phone calls because you were turning off everyone that wasn't ready to buy today, and you didn't have any personas crafted.
You're not going to get any more traffic from that. If you're creating blog content, if you're investing in creating social media reach, if you have converting high-converting landing pages, if you have YouTube videos, if you have SlideShare presentations, if you're doing all of these things the right way, and you're talking about issues that are going to be still relevant a couple of months or a couple of years out from now, you have every reason to expect that a significant chunk of what you're creating will still be attracting visitors and converting leads several months out.
And in some cases, even a few years out, this gives you massive leverage to grow your consulting pipeline. And this is the reason why it needs to be looked at in terms of an investment and not an expense, like the difference between owning and renting. Do you want to buy your way in to interrupt people, or do you want to own the asset that attracts people like a magnet to your website?
Now moving to the next phase of the buyer's journey, the close phase, we're going to take our leads and turn them into clients. Our first question here is, how can we be consistent with growing our managed services revenue and keep the growth moving?
To be consistent with increasing revenue and keep the growth moving, even before you build your personas, start with SMART goals.
Specific, measurable, attainable, relevant, and time-bound. Time-bound and specific means that we can't just dream of more sales opportunities and dream of more clients. We have to have a specific number in mind.
Measurable means that we have the platform and technology to understand what marketing activities lead to what revenue outcomes. We call this closed-loop reporting. And it typically requires a CRM that can talk to the platform you're using to manage all of this.
Attainable means we look at what we've done in the past. We look at the resources that we're putting in this, and we have reason to believe that the goal is within reach based on what we've done in the past. Relevant means that the goal is relevant to the overall mission of what the company is looking to accomplish.
And time-bound means there must be a deadline. There must be a hard date that's attached to it that you're tracking. And then, put your SMART goal on the calendar and hold yourself accountable to interim deadlines.
If you build your funnel correctly, there are many interim steps you can be looking at.
You have visitors. A certain percentage of marketing-qualified leads (MQLs) become sales-ready to pass to your sales team. A certain percentage of sales-ready leads become qualified opportunities, and a certain percentage of those opportunities become clients.
Hopefully, you did your persona research the right way. In that case, they're profitable, desirable clients because you intercepted them early enough in the process that you taught them how to evaluate what it is that you do to make much more informed decisions. And you can use that education as leverage to build up a trusted advisor status.
So our next question is here is, what managed services pricing strategies should we use? And how should we structure service level agreements?
Many of the ideal clients you want aren't up at two o'clock in the morning in a cold sweat, worrying about managed services.
They may be worried that, "Oh crap, our network is down again," or "Why does the system keep crashing?" or "Our competitor had a major security breach. Are we next?"
They may be legitimately worried about those things, but it's not likely that they're searching for that particular keyword phrase on search engines.
And again, your buyer persona research will tell you that one way or another.
The pricing that you use has to be profitable. Many managed service providers that don't scale get stuck at the whole idea of product/market fit.
You've identified the right services, features, products, and bundling that appeal to the market you're going after. And in larger MSPs, software companies, and technology companies, this is an entirely separate discipline called product management.
If you want to scale your business substantially and you're selling packages of managed services, it's critical that even if you don't have a full-time product manager on your payroll, you should start to learn enough about how all of this works. But along the same lines, you should not be leading with pricing.
If pricing is on your homepage or pricing is the first thing a stranger sees about your company. something is wrong. You can talk about pricing. That's a valuable way to attract people to your website, but that shouldn't be the only trick in your playbook.
Because early on, people don't care about your features and your pricing.
They care about the problems that you can solve for them. What's in it for me? Early on, until you've built up trusted advisor status, until you've been seen as an educational resource, you don't want to go into a pricing conversation. A lot of what this comes down to is if you're just focused on pricing, yeah, sure. That's a product management issue. It's an operations issue, tracking time, tracking profitability; it's something to be considered.
But if that's your primary go-to-market strategy, if that's what your marketing funnel and your sales funnel are all about, you're missing most of the opportunity to capture the real value about what it is that you do.
In terms of structuring your service level agreements, it's mostly the same thing. And again, if you want to get insight as to what's going on in the minds of your ideal buyers that you're trying to attract, most of these types of questions will come up when you're doing thorough buyer persona research.
The persona research, for the most part, informs what you're doing with your premium content creation, how you're going to attract the right visitors to your website, and what to concentrate on with topics and channels.
But along the same lines, you're asking them what you look for in a company like this. How do you evaluate a company? What's the experience you're looking for? That will give you ideas on how to handle pricing and whether pricing is really at the top of their list, or if it's really like a second, third, or fourth priority.
A lot of that is similar to SLA's.
What should we concentrate on for finding IT consulting clients and sales?
What should you concentrate on for finding IT consulting clients and sales? The number one thing is to focus on being the best educator that you can about issues that matter to the ideal clients you want to attract, convert, close, and delight.
And the better you nail that, the easier it is to differentiate yourself no matter where they are in the journey, whether they're just learning about your firm, whether they’ve become your firm's lead, or whether they're at the opportunity stage and they're considering hiring your firm, or whether they're an active client.
All of that needs to be informed by a really deep understanding of what these buyer personas are. And the biggest mistake that we see most small and mid-sized MSPs and IT consulting firms make is they think that all small businesses are equal. And unless you like working for a large bank or credit card company or a government agency or something like that, you should never think that you can lump all small businesses into one category.
Next question, how can we make sure that we find the right size and quality IT consulting clients?
That's a similar kind of question. And what's interesting is that most managed service providers and IT consulting firms gravitate towards the SMB space where they see a lifetime value of $10,000, $20,000, or $50,000.
The reality, though, is that if you can get a little more niche on your vertical, if you can work with more enterprise-class types of platforms, the lifetime value of the clients you're going after goes up exponentially. And then we're not talking about trying to land deals that are worth $10,000, $20,000, or $100,000.
We're talking about deals that are worth a quarter million, a half million, or one million or more in that first year or multi-year.
And there's generally a more sophisticated sales cycle and more sophisticated competitors. But again, this comes back to understanding why your company exists, the skill sets that you bring to the table, the kind of problems you solve, and who you solve them for; the basic buyer persona research.
And at some point, it becomes an issue where you're lining up all along with the product-market fit and the product management. But it comes down to understanding really whom it is that you exist for. And if you're lumping too many people together, it's not going to resonate with anyone.
How can we grow our managed services business? That's a big question. We could do a multi-day conference on just that question.
But the 90-second answer is to recognize that there are two ways to grow your revenue. You can get more clients, or you can do a better job at retaining your existing clients.
And if you do a better job of retaining your existing clients, not only do you minimize churn, clients going away, but you gain opportunities to upsell and cross-sell.
When you talk about a recurring revenue-based business, like an MSP or SaaS business, you must do everything possible to minimize the client turnover. Hopefully, I'm not confusing anyone from the UK.
Look at new clients and make sure that leaving clients aren't a significant number to be watching out for. The percentage is going to vary across the board.
But at the same time, retention is critical. Not just from a revenue perspective, but in terms of reputational issues and being able to feed more strangers into that. A lot of the goal with delight is to transform clients into promoters. Again, in the age of Yelp, Google reviews, and Glassdoor, negative promoters can be a big problem.
Suppose they're pissed off when they leave. It's not just that you're losing revenue. It may take a long time to recover from the reputational damage they can do, which is all the more reason why you don't want to take on clients who don’t fit well. If you see that somebody will be a problem client in the middle of your sales funnel, you have to do some serious soul searching as to whether you can fix that dysfunctional stuff that's going on that would make them a nightmare client or whether you need to send them packing early.
You need to take all of this into account, and don't think that it's just about closing more sales. It's about closing more deals with the right fitting clients you could see working with for many years to come, where you grow with them, where there are opportunities to upsell over time and cross-sell. And they end up becoming your biggest evangelists and promoters. If you're seeing sociopathic nonsense that's going on during the sales process, those are red flags that should not be ignored.
So the growth plan needs to take all of that into account.
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