When looking to expand, most MSPs know they need to hire sales and marketing positions. Yet many often don’t know what those positions should handle once they’re hired.
Unfortunately, you can’t just hire a salesperson and tell them to go make money. There are questions you need to answer first. What are they going to sell? How are they going to sell? Who are they marketing/selling to? How much do they have to sell to be profitable? Once you have firm answers for these, you can start making hiring and staffing decisions.
Getting started
So how do you go about answering these questions?
First, learn by doing. Chances are, as an MSP owner, you run sales and marketing for your business, but do you have a written plan for growth? Do you have predefined packages, or do you quote each customer differently?
All this points to process. Even if you’re already stellar at sales and marketing, the entire process must be repeatable and transferable to another person. You may want to start by building a plan for what you want your organizational chart to look like in two or three years. Even though you may still put your name in a lot of the boxes on the chart, it helps to break down and define the jobs that need to get done. Then you can set out to flesh out those roles and start building processes around them. Because you are the one doing these jobs for now, you are the best person to design and test those processes.
Who should you hire first?
When looking to acquire new customers, two main roles are required. A marketing person drives awareness of your business, qualifies leads, and gets new prospects into the top of your sales funnel. Salespeople take those prospects, identify their needs, offer a solution, and close the deal.
You would think, then, that it might be best to start with a marketer since a salesperson will need leads to call. However, many basic marketing tasks can be automated and completed off-hours. You can also outsource some of this to agencies in the area if needed. Odds are good a salesperson should be your first hire (and yes, they can do some prospecting, but you’re better off having them focus on pre-qualified leads). If you’re stellar at closing prospects, though, perhaps hiring a marketer first is the right choice for you.
What will you sell?
Before building your sales process, you need to define what you will sell. As an MSP, this means clearly defined packages with easy-to-understand benefits. Keep in mind you’re selling a solution, not a product. Skip the tech jargon and focus on benefits to the prospect.
Speaking of client benefits, make sure your service packages line up with your target market. Do you cater to small businesses, large businesses, or residential clients? The needs of those clients will be different. Traditionally small businesses need a nearly all-inclusive tech solution; large businesses often want you to be a second tier of support to supplement their internal IT resources. Residential customers have vastly different concerns and should be handled accordingly. My point is, before you decide who to hire, make sure your target audience is clearly defined, so the new hire will best understand their needs. It is up to you to define and document your target client.
Can you afford a new hire?
The last thing to consider is financial viability. Hiring any new employee is a big step for most businesses. Making sure that employee is—at minimum—self-sustaining is key to mutual success.
Take a marketer at $50K per year, and an average customer at $1000 per month at a margin of 25%. These numbers are samples to make the math simple. That means every new customer generates $250 of margin per month or $3K per year. The new hire must bring in 17 new customers per year to earn their keep. At a close rate of 20%, marketing must bring in at least 85 qualified prospects per year. That does not sound bad, except that it eats what you earn. To retain a 20% margin after the marketer’s salary, they must bring in 420 qualified prospects per year or 35 per month. This boils down to needing to close seven new customers a month, with an average monthly invoice of $1000. Your numbers will be different, but make sure you’ve calculated what you need before you pull the trigger on hiring someone new.
Finding the right person
There are many aspects to consider when looking to hire your first sales or marketing employee. If you want to succeed, plan ahead. When it comes to choosing the right person, look for someone teachable. Chances are you will not be able to hire a sales expert as your first hire. Learn it yourself first, and then transfer that knowledge to someone with the right attitude and personality for your company and clients' cultures.
More Guidance - MSP Institute
If you want to learn more, SolarWinds MSP offers extensive free training at the MSP Institute. You can find on-demand webinars and videos on topics like building a sales process, discovering your target market, nailing your value proposition, practicing marketing fundamentals, and much more. Visit solarwindsmsp.com/msp-institute to get started.
Eric Anthony is principal, customer experience at SolarWinds MSP. Read more SolarWinds MSP guest blogs here.
