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When they want to grow their firms, many MSP owners’ first solution is to hire more salespeople.

I read an article a few years ago, whose author recommended that if your sales decline, your first response should be to hire more salespeople. His idea was that you can remedy revenue-related problems by increasing the size of your sales force. Don’t even waste your time trying to figure out why this has happened. Just hire more sales staff.

But there is a problem. The generated revenue will almost never grow in direct proportion to the increase in size of your sales force.

Doubling your sales force never gives you 100 percent increase in sales revenue. Maybe 30 percent. And for this 30 percent, you’ve more than doubled your effort at managing the sales force.

Don’t get me wrong: Headcount does contribute to profitability. It’s called the economies of scale. It means there is an optimum headcount that allows a business to produce the highest revenue at the lowest cost, in a consistent and predictable manner, over a long period of time. When the business is over or understaffed, cost increases and revenue decreases.

This takes us to the harsh reality that when it comes to growth, there are several steps you can take before recruiting new people.

In this blog, we look at one of those steps: Automation.

Reason #1: Automation puts an engine into your business development “racecar”

Without proper automation, your business development is like the Flintmobile, Fred Flintstone’s foot-powered car.

Yes, you can have family members pushing your car around, but that’s unnecessarily expensive and wasteful.

Automation makes business development consistent and predictable, thus it supports the brand it represents. Every piece of inconsistency or unpredictability destroys your brand.

Business development, from the seller’s standpoint, is a monotonous process. Monotonous it may be, but it must be 100 percent consistent and predictable. And that’s something humans can’t pull off, and not because people don’t care. It’s because performing something monotonous in a consistent and predictable fashion is virtually impossible.

In the big monotony, people’s attention starts wandering and consistency goes out of the window. This is why it’s important to automate certain business development processes as soon as those processes have been properly developed and they work flawlessly.

Reason #2: Automation turns the “from first contact to signed contract” process into a greased slide

Purchasing habits have dramatically changed over the last few years. Buyers don’t need to meet sales reps to learn about certain products/services while buyers refuse to waste their time and energy on meeting salespeople, they are eager to “consume” and “digest” valuable content that can help them to make better buying decisions. This self-education process can take a while. Some buyers buy quickly, and some buy more slowly. They buy when they are ready to buy, not when sellers are ready to sell.

It would be a mistake to rely on salespeople to nurture such a long buying process. So, we automate certain aspects of the business development process to make sure that your “From first contact to signed contract” process feels like a greased slide, not like the proverbial obstacle course.

Reason #3: Automation allows for optimal staffing

The objective of a business is not to hire a legion of people and overwhelm them with repetitive, often seemingly menial manual labor. The idea is to run a business with as few people as possible and automate whatever can sensibly be automated.

Many MSP owners try to automate human interaction. We also know from W. Edwards Deming that 94 percent of all problems are system-related, not human-related. It means every time you want to hire a new person, there is a 94 percent chance that it’s a mistake because the problem you want to solve is systemic, not human.

Automation makes it possible for you to hire only a very few talented specialists, so they can focus on their unique specialties, not on repetitive, easy-to-automate minutia.

Let’s look at some recent research (Gleanster Research, DemandGen Report, eTrige) says about the importance of marketing automation:

  • 49 percent of SMBs that use marketing automation say they are more effective at managing their sales leads and 46 percent have seen an improvement in demand generation
  • 42 percent of the SMBs point the finger at marketing automation for improved marketing ROI
  • On average, SMBs use only 48 percent of the features available in marketing automation solutions 

In Summary

Let’s look at some vital statistics:

The Corporate Executive Board (Owned by Gartner) reports that by the time buyers contact MSPs, they are 57 percent “deep” in their buying processes. It means the first 57 percent of the buyer’s journey can easily be automated because buyers are not ready for personal interaction. To this, some people say that they connect with buyers after the 57 percent mark.

Yes, it’s doable but it may well be too late.

According to Aberdeen Research, connecting with buyers at an early stage of their buying journeys can result in as much as 47 percent higher prices and 64 percent higher closing rates.

Correlating this data with McKinsey & Co.’s study (The Power of Pricing – McKinsey Quarterly, Feb 2003), you find that every 1 percent closing rate increase adds as much as a 3.2 percent increase and every 1 percent price increase adds as much as an 11.7 percent increase to the bottom line.

Considering these numbers, I believe it’s wise to pay some serious attention to and make the correct investment in business development automation. What do you think?

Photo: TierneyMJ / Shutterstock

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Tom Varjan

Posted by Tom Varjan

Tom “Bald Dog” Varjan designs and builds highly automated client acquisition systems for boutique IT service firms that enable them to attract better clients with more interesting projects at higher prices 24/7. He is one of the very few IT marketers/copywriters who is also a graduate computer engineer with 16 years of experience in the high-tech industry as an engineer, programmer, project manager and corporate tech buyer.

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