I have a long-time N-able partner whose account I managed off and on over the years. Although I am no longer in that role, we still keep in touch, chatting regularly about how their business is doing, and discussing their successes or any challenges they might currently be facing.
This year, they set some pretty aggressive growth targets for their organization. Their revenues were off due to the pandemic, so they needed to regroup and double-down to make 2021 a more profitable year. But to meet these targets, they quickly realized relying on word of mouth and referrals alone would not be enough. They needed to do something more when it came to their sales and marketing efforts.
On the marketing front, they hired an outside agency, who is helping with their brand building. Through the power of digital marketing and social media, they are striving to make their MSP more visible in the marketplace. They have redesigned their website and amped up their presence on LinkedIn, working to cultivate an online presence for themselves and ultimately build their brand.
But they are continuing to struggle on the sales front. Not unlike other MSPs, they perceive the need for new customers to meet their revenue targets. Although they have attempted to hire new salespeople to assist with this, they have been struggling to find the right candidates—they were seeking hunters.
I was curious as to why they were so focused on finding new customers. This MSP is fortunate enough to have four divisions—distinct but complementary—where each could benefit from the services of the others. Despite these divisions, they lacked an inside source to cross-sell and upsell on their behalf. So I suggested: if they were struggling to find the right candidates to be hunters, maybe they should consider focusing on hiring an account manager as a farmer-type role, and identifying opportunities within their existing customer base.
Robert Herjavec was a keynote speaker at this year’s virtual Empower event in June; he said, “85% of revenue comes from expansion from your existing base… so expand with the customers you have by constantly upselling them.” I couldn’t agree with this statement more.
At the heart of it all, there are only three real ways in which you can grow your business:
- Finding and signing new clients
- Expanding your share of wallet and portfolio breadth within your existing client base
- Selling more services or tools to your existing clients, more often
So don’t discount the potential revenue that could be within your existing MSP.
6 benefits of hiring a farmer for account management
1. Easier and faster sales
According to the book Marketing Metrics, the authors claimed that when selling to a new prospect, there is a 5 – 20% chance of making a sale, but when selling to an existing client, that probability skyrockets to 60 – 70%. These are customers that already know you and your team. You’ve done the heavy lifting of convincing them to sign with you. As such, you don’t need to prove your worth, as you have already earned their business—now you just need to get more of it.
2. Reduces customer churn to help secure the revenue you already have
The MSP industry is a terribly competitive one as most businesses already have an MSP provider. Generating new leads and finding new prospects to speak to, and then working to convince them that you are better than their incumbent MSP, is quite an undertaking. According to Paul Dippell from Service Leadership, it costs an average MSP $23,000 to find, sign, and onboard a new customer. Once you have spent all that time, money, and effort winning those new clients, you want to ensure you are doing everything you can to retain them—you don’t want them hemorrhaging out on the back door after they have signed on. By implementing an account management function that is focused on building strong relationships with your existing customers, you are going to create a base of loyal and happy customers. And if you are able to increase your sale of wallet with those same customers simultaneously, the stickier the relationship becomes—ultimately making it more difficult for them to switch providers and leave you.
3. Helps to differentiate your MSP from the others
Most MSPs struggle with trying to differentiate themselves from their competitors, because most MSPs perform the same set of services, using a very similar tech stack. But by committing to developing an amazing account management and customer engagement process post-sale, that can be the ultimate differentiator between yourself and your competitors. This leads to Benefit #4….
4. Increased referrals and word-of-mouth potential
If your customers ARE feeling the love from having a dedicated account manager assigned to their account who is committed to their ongoing success, these feelings will translate into positive word of mouth and goodwill for your MSP, potentially leading to referrals flowing into the top of your sales funnel.
5. Improved pipeline stability and sales forecasting for your MSP
A dedicated account manager that works to entrench themselves in your customers’ businesses will inevitably uncover new opportunities to help bolster the sales pipeline. By implementing regular strategic business reviews, you can secure financial commitments from your customers on future projects, helping you forecast new business . This will help create predictability and stability in your sales forecasting, especially if you happen to be struggling with finding and closing new customer contracts.
6. Increased business valuation of your MSP
This ultimately leads to an increased business valuation. Private equity firms looking to purchase other MSPs place a high degree of importance on providing an amazing customer experience. And if you are an MSP that would like to retire one day via selling your business, then don’t discount the benefits a great account management process can play in your organization.
So how are your sales coming along so far this year? Are you achieving them and your revenue goals? Are you struggling with hiring quality salespeople for your MSP? Consider implementing an account manager role as an alternative salesperson within your organization, because the selling doesn’t stop once the contract is signed. As defined by Indeed.com: “Account management helps a company maximize the business opportunities it can derive from its loyal customers.” Exponential growth can be gained via your existing customers—if you make it a point to actively look for it.
Interested in learning more? Join my Boot Camp, Selling Doesn’t Stop When the Contract Is Signed, on September 14. Click here to register.
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