Lead generation is an area that many MSPs struggle in. You need a repeatable process for building a lead generation engine that will drive your company’s sales and profits. When I speak about this topic at live events, I always begin by asking the audience a basic question.
“How many people would consider adding new recurring revenue as their top goal?” Every hand in the audience fires into the air.
I then qualify this question with a follow-up. “How many people can consistently add at least $2,000 or $3,000 in new monthly recurring revenue each month?” Very few hands are raised. How can an entire group of people agree that something is their top goal, yet hardly anyone is achieving it on a consistent basis?
Adding a steady flow of monthly recurring revenue clients at the right price begins with having a true lead generation process. Here’s where to start:
Assess your current lead generation situation
It’s time to take a look at your current situation and ask a few questions of yourself.
- Do I have a plan and a process for lead generation today?
- Is there someone accountable for our lead generation success?
- Speaking of success, how are we measuring it?
- Do we have goals in place to let us know we are moving in the right direction?
Everyone will agree that they want to generate more leads, but very few MSPs that I speak with can answer ‘yes’ to all of these questions. Creating a successful lead generation process begins with understanding these basic principles.
If you have a plan in place today, look at the questions listed above to qualify it as a true plan. If you don’t have a plan in place already, take time to consider each question as it relates to lead generation.
When assessing your current situation, you should first look at your sales prospect database. How many prospects do you have, and what is the quality of the prospects? The quality of the lead can be determined by looking at how much contact you’ve had and what information you have about them.
Now look at your current results. If you are not generating a predictable flow of FTAs (First-time appointments), then your goal may be to set seven to 10 FTAs a month. If you are currently scheduling 10 FTAs per month, then your goal might be to move that number to 20. This will set the framework for putting your lead generation plan in place.
I’m ready to create a plan. Where do I start?
Every plan starts with a goal. However, before you can begin to set goals for yourself you must first consider your overall life and business plan. Where do you want to be in a month, in a quarter, in a year, in three years? At TruMethods, all of our members complete detailed life and business plans in order to properly evaluate where they are currently and where they would like to get to.
On a business level, start by setting an annual MRR (monthly recurring revenue) goal. I suggest using a “sales goal calculator” to determine what an achievable goal looks like for your company. Your monthly recurring revenue goal equals the number of FTAs you go on, times your close ratio, times your average deal size (average MRR):
MRR= FTAs x Close Ratio x Average MRR
If you go on 10 appointments and you have a 20-percent close ratio, this will equate to two sales. Then, if your average deal size is $2,000/month, this would mean overall MRR is $4,000.
Key impactors of this formula are the quantity and the quality of your FTAs. You’ll want a consistent flow of appointments while at the same time getting them from a variety lead sources. Of course, how effective you are in the outside sales process will ultimately be the deciding factor for how successful you are.
Now that you have assessed your current situation and calculated how many FTAs you need to reach your goal, it’s time to decide what lead generation sources you will focus on.
Not all leads are created equal
You will not have the same close ratio with all leads. For example, your close ratio will be lower on appointments from cold calls made to a cold prospect list. Warm lead sources like referrals will have a higher close rate, and returning prospects (prospects that you have met with in the past and qualified) will have the highest close ratio. You need to focus on warm lead sources while building a steam of returning prospects over time.
Developing COIs (centers of influence) is a key strategy to generating warm leads. COIs are referral partners that have the same target market as you do. It could be a software vendor in a vertical market you specialize in or a communications company. One great way to find quality COIs is to ask your best clients who else they deal with that they love as much as you. Your goal should be to meet with one new potential COI each week.
Next consider adding inside sales. Inside sales combines two important roles: lead generation (setting appointments) and prospect database management. The inside sales person dials the phone each day gathering information about prospects and setting three to five appointments per week. I know some people say that cold calling is dead, but in the IT services business we need to talk with prospects before they are in pain. I have successfully used this process in my MSPs for 20 years and today coach more than 100 inside sales folks around the world.
Marketing is another important process. Be aware that some marketing such as email marketing or event marketing require a quality prospect list, so if you don’t have a good list today you need to focus on warm lead sources and building your list first. Over time you can also add an inbound or content marketing approach to attract new prospect to your website.
Accountability is the key to success. You need to have a weekly sales meeting (even if you are the only one there) and review your activity versus goals for the week. You don’t need to do a lot of things to generate leads; you just need to do a few of the right things each week. Build a playbook to track your daily, weekly, and monthly sales activity goals and results.
In conclusion, remember to first set an MRR goal and determine the FTAs required to reach your goal. Then decide on the lead generation activities you will focus on based on your starting point. Start with warm lead sources and add inside sales when you can. The key is to reach your weekly activity goals every week.
Many people are not generating leads because they are too busy trying to clear the decks in other areas of the business. This means you need to change the tires while rolling down the highway. Start today with spending a few hours a week on finding new COIs, and in a few months you will be surprised at your progress.
To learn more, watch the webinar replay “Supercharge Your MSP Lead Generation Results.”
Photo Credit: Rich Oldham via Flickr.com. Used under CC 2.0 License.