9 Strategies to Optimize Your MSP’s Sales Cycle Using a Demand Waterfall
I recently participated in a Facebook Live chat on the topic of SiriusDecisions Demand Waterfall with Axcient’s Matt Hemingway, director of growth operations, and moderated by Axcient’s Corey Banner, director of partner success. We covered a lot of ground, and I wanted to share some of the key takeaways for how MSPs can better maximize their own demand waterfall.
What is Demand Waterfall?
Demand waterfall is, according to its creators, “[A] framework for understanding how effective an organization is at identifying, attracting, engaging and qualifying that demand.” Basically, it supports leaders as they methodically figure out which marketing and sales efforts will deliver the most return on investment (ROI).
Why Implement Demand Waterfall?
For MSPs, especially those small- to medium-sized operations with finite resources, it’s imperative to make the most of your staff’s time. Using your sales cycle and marketing data, your managed services team can begin to pinpoint what activities make the most effective and profitable use of your resources.
Though it should be common practice for all organizations, it often is not. When you start segmenting your data and slicing up your marketing activities and sales cycles, you’ll begin to gain a better idea of what you should be focusing on—and more importantly, what you shouldn’t be focused on. You’ll notice where a lot of wasted time and money might have been spent on projects and activities that end up going nowhere. You’ll probably confirm some of your suspicions about your sales cycle, but you’ll probably also uncover some surprises about what you thought you knew!
9 Strategies for Implementing Demand Waterfall
Matt and I discussed a number of things MSPs should be doing in order to reap the benefits of demand waterfall. Here are the top concepts to keep in mind:
1. Just start.
You may think your data is lacking for an undertaking like demand waterfall, but you have to start somewhere. Smaller MSPs who can’t afford a customer relationship management (CRM) platform like Salesforce have other, less expensive options including HubSpot, Zoho, Freshworks and others.
Even if those aren’t options for your MSP, you can always use an Excel spreadsheet to track important dates in the sales cycle, like when a lead came in, when a sales rep made contact, etc. This exercise will also help you identify where you may have some data gaps that you need to close.
2. Know your sales cycle.
Before you can do anything else, you have to know what your MSP’s sales cycle looks like. Then, you can work up from there, looking at the deals you’re closing and where they come from. Focus on what you know you have data on and start asking questions.
3. Work in both directions.
As I mentioned, you’re not just working from the top down and asking, “How much do we need to bring in to achieve our goals?” You also must work from the bottom up, looking at what you already know about your MSP and what your team can produce. A successful demand waterfall lets you meet in the middle to discover what you have the capacity to accomplish, what additional resources you need or how you need to scale back on goals if you don’t have enough resources.
Working from the bottom up allows you to have a realistic baseline for your goals—which sets your sales team up for success.
4. Get curious.
As an individual sales rep, if you don’t think management is serious about demand waterfall, offer to help. It will at least get people thinking and start the conversation. When you come in with an open mind, it takes you on an adventure of discovery—including some really cool things you can take advantage of right away, as well as a-ha moments that will have you asking, “Why were we even doing that?”
5. Question what you think you know.
Use data to validate the “facts” you think are correct about your team and their activities. For instance, your salesperson goes to trade shows and gets a lot of leads—but what’s the conversion rate? How many deals are they closing? Do those deals take longer to close than deals from other types of events or marketing activities?
You might find that some things are not as good of an ROI as you’d thought, so you have to be willing to let go.
6. Make it a conversation.
Marketing can’t just hand off the leads to sales—it has to be a partnership for demand waterfall to work. Sales needs to be saying, “Send me more leads like this BECAUSE ______,” or, “Send me fewer leads like this BECAUSE ______,” so marketing can constantly refine and get higher quality of leads for sales.
When you have these discussions, include all parties—you never know where those golden nuggets of wisdom will come from!
7. Don’t get defensive.
It’s easy to blame sales reps if they’re not hitting their numbers, but you have to get to the bottom of why that’s happening. Find the missing link between what sales is saying and what marketing is doing, without getting defensive. I like to say, just go in there like Switzerland, stick to the facts and remain neutral.
8. Make it simple.
Data is great, but too much data leads to analysis paralysis. Make your CRM tool easy for your salespeople to work with.
This requires discipline and the ability to compromise. As Matt says, on the operations side we’re “data vacuum cleaners—we just want all the info we can get!” But your sales team doesn’t want to be weighed down filling in 100 fields they don’t see the value in. That’s when you start getting false positives, with sales having undocumented conversations to avoid the CRM hassle.
To resolve potential disconnect, get input from sales (and marketing) on what fields to include, and pick the datapoints that matter most. It’s all about getting everyone in a position to win.
9. Put your tools to use.
The demand waterfall exercise is also a good time to examine all the tools in your toolbox you might not be utilizing fully. At Liongard, we have seen our MSP partners use our platform’s automated documentation to identify duplicate or unnecessary expenses within a prospect’s system, which demonstrates real-world, bottom-line value to a prospect. Now more than ever, with fewer face-to-face meetings taking place, it’s essential to be creative and resourceful, and get the most ROI from everything.
To see how your MSP—including your sales team—can benefit from Liongard’s automated documentation, schedule a free demo today.