MSP – The definition

A managed service provider (MSP) manages customer IT infrastructure or end-user systems remotely, typically on a proactive basis, under a subscription model. Often, the terms "cloud service provider" and "managed service provider" are used as alternate terms when the provider's service is continued with a service level agreement (SLA) and is provided over the internet.
Get a demo

MSP sales

Generally, most managed service providers (MSPs) are more technically sound than being business or sales experts. Many MSPs struggle with the critical aspects of successfully running a business. Developing a business is clearly important, particularly during the early days of getting started in the managed services space. While some growth occurs organically through word of mouth, it is not going to guarantee consistent new business, even when the MSP delivers great services.
To ensure the expected growth, MSPs should take a hands-on approach. This is where the MSP sales process comes into picture. The prime goal of the MSP sales process is to create new business for the company. For an MSP, or for any company for that matter, this can happen in many ways. For service providers especially, sales and marketing is not just about closing deals - Since MSPs are selling a service, these disciplines should be about ascertaining and winning the right prospects. In other words, it is important to identify prospective customers with a set of IT requirements that the MSP can provide for, over time.

MSP Sales strategies

Build sales expertise

Sales expertise can be built in two ways—hire people with sales experience or train existing team members to sell like professionals. Although hiring skilled sales staff can make a huge difference, many MSPs cannot afford to hire new employees exclusively for sales, right at the beginning. In such cases, it is important for MSPs to identify and train sales executives from within the organization. Many a time, it can be surprising to notice that a sales rock star already existed in the organization, without the leadership team knowing it earlier.
Many MSPs don't have the bandwidth to exclusively focus on the MSP sales process or business development. In most cases, the teams already have their hands full doing what they do best— monitoring, refining or repairing the existing clients’ IT infrastructures. Even if they do have some free time, it is not likely steady enough to have a real bearing on business development because the efforts are not persistent. However, this issue is resolvable when MSPs carve out time to make it happen. One assured way to do this is to delegate. Let us consider a managed service provider with five full-time employees - a senior engineer, one employee with several years of experience and three additional junior team members. It makes sense for the senior employee to be trained technically, to take over some of the technical responsibilities; perhaps one of other employees can seem a better fit for taking on a sales role.
Delegating technical or administrative tasks to other team members helps entrepreneurs focus exclusively on growing the business. Of course, some MSPs may not afford to move a current employee into the MSP sales process full-time. But if the organization’s intent is to grow, it is imperative to pick the most apt person for sales and lessen their billing requirements [to let them focus on the MSP sales process part-time].
An alternative option is to get the technical staff to be a part of the MSP sales process. After all, they communicate the most with current clients, which means they may better identify possible sales opportunities better than anyone else. They can initiate the conversation and then put the prospect in touch with someone from the sales team who can lead them through the MSP sales funnel. This can be an effective approach, particularly for smaller managed service providers.
Choosing this approach also means that it has to be appropriately structured. Existing customers or prospects should always recognize engineers as reliable resources that are there to solve problems—not someone trying to get them to buy. To keep up this reputation, it helps to build the MSP sales process in such a way where technical staff make recommendations to customers, but then refer them to sales team members to finalize the deal.

Select and train sales staff

Not all team members can make good sales professionals, just as not everyone can be a great technician. Be it hiring a new salesperson or transitioning an existing employee into a sales role, it is important to look for specific qualities that act as their success indicators.

People in sales need to be self-confident, amiable and embrace technology. They don’t have to be technically sound, but they should have the aptitude to develop a fair understanding of the technologies that the company sells. The salesperson should be someone who understands the product and asks the right questions. Sales training is critical. A company’s training program for sales has to mature over time and must be structured to teach salespeople the ways to build relationships with customers and prospects. Training from outside sources can be valuable too. Peer Groups offer several opportunities for learning sales, marketing and business development.

MSP Sales strategies

Developing an MSP sales process, sometimes referred to as an MSP sales funnel, is another essential step needed for sales success. The specifics differ for different businesses, but on the whole, MSP sales process is a repeatable set of steps that sales teams follow to impress potential clients to become customers. The stages of the MSP sales process typically include:

Initial contact

The goal of initial contact is to get information about a company’s specific needs and further qualify the lead’s potential to be a customer.

Technical presentation

This stage of the MSP sales funnel is the formal demonstration of the technology or product that is being sold. This step is usually earmarked for well qualified leads.

Close

The last stage of the MSP sales funnel, closing a deal includes getting a go ahead for buy-in from decision makers, price negotiation, etc.

Lead generation/prospecting

This is the step where qualifying leads are generated. This involves research on potential clients, cold calling, and inbound marketing strategies like blogging and social media, participating in networking events, etc.
Referrals are usually a common way to get leads. Referrals come from clients and also vendors a company partners with. If a company proves to vendors that it can perform installs as per their exact specifications, they will more likely pass on potential clients to the company.

Additional to the MSP sales funnel, it is important to leverage a range of inbound marketing strategies to generate leads. Some engineers and salespeople can be regular bloggers who post blogs regularly and that generate a lot of leads.

Once the lead is identified, a member of the sales team will make initial contact with the potential customer. MSP sales process is more of a broad stroke conversation to understand the client’s interest. If the potential client shows interest, the salesperson will schedule a technical presentation with the right engineer. Technical presentations must be tailored to the size of the company and their technology requirements.

However, not all calls lead to a closed deal or a technical presentation. Not every potential customer will end up as a good match for the services that the MSP delivers. The prospecting phase of the MSP sales process is the MSP’s chance to recognize customers that may be a good fit for services delivered. It makes sense to gauge potential customers based on specific criteria including company size, geography and industry during this phase of the MSP sales process. Some leads might be ideal customers, but may not make IT decisions during the initial contact. In such cases, the sales teams should keep track of leads, and follow up at a later stage.

Keep track of the MSP sales Progress

Tracking sales on a daily, weekly, and quarterly basis ensures that potential opportunities do not slip away. It is also the most effective way to reach set goals. Reaching goals is the measure of sales success—setting and tracking progress during the MSP sales funnel is a standard and effective way to guarantee sales accountability.

Companies use customer resource management (CRM) tools native to their professional services automation (PSA) software to track and report sales progress and goals. Many businesses making the transition from break-fix to MSP adopt PSA and (remote monitoring and management) RMM software in the process.

Conversely, PSA software is not the only popular go-to CRM tool. There are many steadfast CRM tools available that offer robust functionality without additional fees and management of other tools.

CRM tools provide automated alerts to avoid common mistakes such as failing to follow up with potential customers or current customers. These alerts can be configured based on a sales executive’s specific needs. Automating these alerts helps create a roadmap in the MSP sales funnel for sales team members to follow up and communicate with customers. CRM also warrants accountability among sales teams. The software tracks all activities as and when performed; this way, everyone is on the same page. It all boils down to accountability. Tracking and regular meetings give the much needed support and structure to help sales succeed.

Sales Incentives

Sales incentives and compensation plans motivate sales executives to close more deals. Normally, sales compensation plans consist of a base salary and commission, which is connected to their success in bringing in new clients or refurbishing existing customer contracts.

There are many sales incentive options for selling managed services. There is no one right way to incentivize sales executives. It is better to incentivize the team to perform the tasks they are accountable for. Incentives should be tailored to individual members in the sales team. Utilizing a CRM tool to automate alerts for sales reps and tracking sales progress is perhaps the single most important step when building a sales program. Tracking sales activity holds sales members accountable and regular meetings addresses issues as they happen, rather than after it is too late. It is important to ensure that sales goals are specific and well-documented.

MSP sales funnel

Conventionally, many MSP businesses have depended heavily upon referrals from their existing customer base to generate prospective customers. Although leveraging referrals mostly serves MSPs well, businesses cannot count on referrals alone to deliver all the new customers. Depending just on referrals, the growth will eventually reach a peak and cease, letting competitors get ahead.

Filling your MSP sales funnel

To recognize and target the opportunities available, MSP businesses need to build the MSP sales funnel that includes more than customer referrals alone. One important strategy is to revive cold opportunities with prospects. Many times, an opportunity is not completely “lost out, it is rather an obstacle or circumstance, which can be revived.

Referrals from existing or previous clients are not the only ones that help generate leads. Third party “influencers” bring awareness of the MSP to prospects that may have never discovered or given a second thought to the particular MSP. This means that the MSP has to rethink about presenting the company as a business and encouraging contacts to consider them as an option when looking for MSPs.

It is important to personalize the company’s messaging. Irrespective of the industry or vertical the clients belong to, they want the MSPs to value their time and business. A healthy sales process is all about communicating on time, keeping track of each prospect and customer, their personal needs and concerns. Personalizing the MSP’s approach will keep customers engaged during communication and ultimately drive greater business outcomes.

Dos and Don’ts in the MSP sales process

Avoid providing a quote immediately on the first call or conversation; also it is not a great move to head over to the customer site and conduct ad hoc assessments or sales presentations. To build value, the MSP has to stretch into multiple meetings. Although it may seem like more work up front, it is crucial for establishing trust with a client. The MSP sales executive has to open and sustain dialog about the customer needs so that a unique solution can be tailored for them, without diving straight into a pitch. With careful consideration and attention to customer needs, MSPs can build lasting relationships and, eventually, deliver a better offering.

Schedule on-site strategy sessions with clients

Meeting face-to-face with prospective clients demonstrates the MSP’s investment in a trust relationship. It is more important to listen to the customer than lead with a pitch. This way, the MSP can understand the customer’s problems, pay close attention to their needs, and take note of their pain points. This also serves as an ideal opportunity to accurately comprehend whether the demands are unwarranted or unreasonable for the MSP’s capabilities.

Conduct an in-depth evaluation and discovery

The MSP has to discover everything on the client’s network and precisely evaluate where they stand. It is ideal to do this during a second meeting. It is important to ask specific questions that delve more deeply into the needs of the prospect. This will help show the client that the MSP is invested in the client’s unique challenges.

Interviewing different staff members help find out specific issues they face. The interviews may be basic questions like how the employees feel about the company’s IT build, the kind of issues with their computer network, how the network could be improved, the changes they would like to see, and so on.

While doing the assessment and discovery, it is important to bring cybersecurity into the discussion. Managed cybersecurity is often a poor experience; this could be a chance to set the MSP as a company a step ahead from the client’s current provider.


Finally, schedule the third meeting and move ahead understanding the client’s stage of discussion.

Make the pitch.

During the earlier meetings, the prospect would’ve already told the MSP about what they need to succeed. This knowledge helps craft the right message to deliver the pitch during this meeting. It is ideal to start by walking through the client’s pain points revealed by their employees, information found during discovery/assessment, etc. This makes the sales pitch presented as a well-tailored offering that can actually solve the customer’s challenges and enable growth.

Ultimately, listening to the prospect, understanding their needs, and demonstrating commitment to providing value and nurturing the relationships, MSPs will be well on the way to building a meaningful and successful business partnership.

MSP sales metrics

Managed Service Providers (MSPs) who are starting out should understand and be aware of the metrics that they should track on a regular basis. Knowing the right data to be used truly depends on what the MSP’s clients want to see, what is most important to the MSP business, and what type of data is going to boost business.
There are several key performance indicators (KPIs) that can influence and drive different teams in the company. Narrowing down on the metrics and KPIs that are most important to the business is the first step towards running business in a data-driven fashion.
Once the KPIs are determined, the MSP must decide how they are going to be tracked. Manually analyzing data is a tiresome task that can take hours of time. This could add to the loss of productivity due to spending more time on metrics than on revenue-generating endeavors.

Sales growth

Sales growth is a popular metric for businesses to track, as it is an easy way to check if the MSP business is growing.

Sales opportunities

Tracking MSP sales opportunities allows predicting the number of new customers that may come. Tracking sales opportunities shows the number of potential customers that the sales reps need to reach out to.

Quote-to-Close

The MSP’s quote-to-close ratio is the average number of quotes sent before one of them is closed. This helps identify potential issues with the quote, be it the price, timing, or other factors.

Age of opportunity

Analyzing the age of each opportunity allows the MSP to recognize patterns to identify the ideal time to prioritize an opportunity, thereby increasing the close rate.

Response time

Monitoring the response time of sales reps will help the MSP ensure that the sales cadence is being followed and doesn’t need changes or improvements.

Total pipeline dollars

Tracking the dollars in the pipeline helps the MSP foresee the revenue that will come in the next month.

Website visitors

Often considered to be a vanity metric, tracking website visitors provide great value. For instance, when combined with the average conversion rate, the number of website visitors can be used to predict the leads that may be generated in the coming days.

Bounce rate

Bounce rate helps the MSP understand if the people visiting their website are getting what they were looking for or if they are unsatisfied and exiting the site. This is mainly important for SEO and PPC ads.

Leads from the website

The number of leads coming from the company website will help understand its efficiency in driving new customers to the company.

Unique blog page views

Many MSPs have now begun to write blogs so as to offer added value to their clients and garner new leads. Checking the number of people visiting the blog helps understand the worth of this channel.

Newsletter views & clicks

When an email newsletter is sent to customers or to a subscriber list, the MSP can identify the value it is delivering, based on the number of people who view and click on the emails.

Social media mentions

Social media presence is necessary today. It is important for a business to keep a close watch on their engagement on social media by keeping track of social media mentions.

MSP sales tips

Both current and prospective customers may sometimes have objections to the price of the MSP’s monthly service offering. Every dollar counts when it comes to small businesses; so customers are wary about spending more money. Many business owners may not truly comprehend the value associated with the model of monthly services, which is why educating them is extremely imperative.

Ensure excellent service

It’s important for customers to understand that the MSP’s service offering is truly all about service. This could include outlining the level of support and availability that the MSP is willing to provide, or it might also mean categorizing service terms in a formal contract. Having a great track record and showing it to prospects definitely establishes the company as an experienced solution provider, and also puts prospects at ease.

Sell peace of mind

MSPs need to connect and speak to clients at an emotional level. It is important to converse in a way that assures clients to relax, knowing that the MSP will be on top of any technical issue before they become a threat. Giving clients peace of mind about technology so that they can focus on their core businesses plays a huge role in adding to the value proposition of the MSP’s monthly service offering.

Remote monitoring and management tools proactively monitor a client network environment and provide alerts when something goes amiss. RMM can be set to resolve routine issues automatically even before the client knows about it.

Be transparent with numbers

People understand costs better when presented as monthly payments, rather than being summed up annually. It’s important to present the monthly total the customer can expect the following month. Hidden fees are always a put off, so it is important to make sure that the monthly total is accurate. This helps the institute to form trust and enables customers to set aside a budget for the MSP service.

Sell benefits, rather than banking on selling technology

Most customers seldom understand business technology. They often have very little time to figure it out themselves; they just want to understand the real results that can help their businesses. Business owners are in need of an MSP who can give them the ability to refocus on their core business and easily hit their business goals.

Redefine real costs

MSP vendor bills are not the only cost associated with a company’s technology. The biggest cost is perhaps the poorly functioning technology that costs in people and productivity. This is where it is important for the MSP to reframe how their services would be beneficial to the client. It makes sense to ask logical questions to transform the client from their emotional, irrational fears that result in a “no”, towards rational decisions that lead to closing the sale.

Hardware-as-a-Service (HaaS) helps demonstrate added value and gets clients or prospects to sign long-term service contracts. Here’s one of the ways how this MSP sales strategy works: If a customer agrees to sign a managed services agreement on a monthly basis, the MSP will upgrade their servers POS terminal, PCs, or other hardware after a period of three years, at no additional costs.

This creates a win-win situation for both the MSP and the client. The client is delighted to get the latest hardware without additional expenditure. The MSP witnesses enhanced client stickiness and reduced customer churn. With the HaaS contract, the impact on the MSP’s cash flow is minimal too.

Sell Yourself as the Go-To Vendor

MSP vendor bills are not the only cost associated with a company’s technology. The biggest cost is perhaps the poorly functioning technology that costs in people and productivity. This is where it is important for the MSP to reframe how their services would be beneficial to the client. It makes sense to ask logical questions to transform the client from their emotional, irrational fears that result in a “no”, towards rational decisions that lead to closing the sale.

Hardware-as-a-Service (HaaS) helps demonstrate added value and gets clients or prospects to sign long-term service contracts. Here’s one of the ways how this MSP sales strategy works: If a customer agrees to sign a managed services agreement on a monthly basis, the MSP will upgrade their servers POS terminal, PCs, or other hardware after a period of three years, at no additional costs.

This creates a win-win situation for both the MSP and the client. The client is delighted to get the latest hardware without additional expenditure. The MSP witnesses enhanced client stickiness and reduced customer churn. With the HaaS contract, the impact on the MSP’s cash flow is minimal too.

MSP Sales FAQs

What is MSP sales?

Most managed service providers (MSPs) are better technically experts than in business or sales. Many MSPs struggle with the key aspects of running business successfully. While some growth occurs organically through referrals, it is not going to consistently bring in new business, even when great MSP services are delivered.

To witness the expected growth, MSPs should take a practical approach to sales. The key goal of the MSP sales process is to bring new business for the company. For an MSP, sales and marketing is not just about finalizing deals - Since MSPs sell a service, sales and marketing should ascertain winning the right prospects. MSP sales is about identifying prospects who have a set of IT requirements that the MSP can cater to, in due course.

What is a MSP Sales Funnel?

MSP sales funnel is a visual representation of the customer’s journey towards purchasing goods or services. It looks like this:

Awareness > Interest > Decision > Action

The sales funnel begins with making potential customers aware of the MSP’s product or service. The next step is about generating interest in the product or service, followed by the customer showing interest in it. As the last step, the customer takes action by purchasing it.

What are the top MSP sales metrics?

When it comes to MSPs who are beginning the business, it is important to know what metrics they should be tracking regularly. There is no simple answer to this: Knowing what data to use depends on the client’s preferences. There are many key performance indicators (KPIs) that can influence different teams in the MSP’s business operations. Tracking metrics and KPIs is just the first step towards running a data-driven business.

Manually analyzing data can be tedious, leading to loss of time and productivity. This is where automation helps. Common MSP sales metrics include financial Metrics like cash on hand, months of cash, Accounts receivable, Profit, total number of customers, customer lifetime value, Revenue Vs. end user support, cost per end user, ROI, Gross profit, Net profit, and more.

What is MSP sales automation?

In the case of MSPs, sales automation means freeing up the sales staff to make sales and onboarding staff to serve more customers. This can be accomplished by building a strong foundation right from the beginning —a system that precisely and steadily automates everything that slows down the business.

MSP sales automation offers insight and operational efficiencies continuously, to manage the Modern IT stack. A comprehensive interface that integrates with other programs helps in documentation, change detection, assessment of best practices, and more. In short, MSP automation helps achieve the following:

- Quickly onboard new customers 
- Automated and continuous documentation
- Set proactive alerts for domain expirations, certificate renewals, mismatches configurations
- Security risk assessment
- Assessments of customers and prospects
- Rapid periodic business reviews

What is the MSP sales commission?

Sales incentives and compensation plans motivate sales executives to close more deals. Normally, sales compensation plans consist of a base salary and commission, which is connected to their success in bringing in new clients or refurbishing existing customer contracts.

There are many sales incentive options for selling managed services. There is no one right way to incentivize sales executives. It is better to incentivize the team to perform the tasks they are accountable for. Incentives should be tailored to individual members in the sales team.

What is the MSP sales process?

Developing an MSP sales process is another essential step needed for sales success. The specifics differ for different businesses, but on the whole, MSP sales process is a repeatable set of steps that sales teams follow to impress potential clients to become customers. The stages of the MSP sales process typically include:

• Lead generation/prospecting
• Initial contact
• Technical presentation
• Close