Secrets to Building an MSP Sales Team
After 20 years in the MSP world (including 12 years in the MSP sales space) and an overlapping 23 years in the Air Force, I’ve been able to collect some pretty useful information about building a successful sales team and keeping people motivated. Now that I’m interacting with MSPs on the other side of the fence at Liongard, I wanted to share some of the things I’ve learned along the way that you might find helpful.
I think we all have a good grasp on the “basic” rules of the game—but like any good coach, I want to focus on the nuances that will help your MSP grow and succeed.
Whether you’re looking to finally take some of the sales pressure off your shoulders by hiring your first dedicated salesperson or you’re looking to expand your roster, these tips will help you build a high-performing sales team.
1. Understand Your Objectives
Take some time to think through what you’re trying to achieve before growing your sales team. Your MSP may be in a different position than your competitor, and you may be in a different position now than you were a year ago. Some things to consider include:
- What are you trying to accomplish? Incremental growth? Someone to take over sales from the owner?
- What do you want a new salesperson to do? Cold call? Call on existing partners? Bring a book of contacts with them?
- How will you manage progress? What systems you will use?
- What geographical region will they focus on? By industry? ZIP code? State? Region? Nationwide?
- What are your targets? How will you define success?
Thinking through these items will help you focus your search, identify the best person for the job, and set a concrete expectation for them from Day 1.
2. Look for a Certain Personality
Not all salespeople are the same, of course. And you shouldn’t shy away from hiring someone who is different from other people on your sales team (or other salespeople you may know). However, successful salespeople tend to fit a certain profile and possess many of the following characteristics:
- Confidence (with just a tinge of arrogance)
- Resilience (able to handle rejection and remain motivated)
- An “intelligent fighter” (politely persistent)
- A hunter’s mentality
- People skills/charisma (to connect and establish a rapport)
This type of personality differs wildly from that of a great account manager, who I’d classify as having the following traits:
- Seeks to understand fully
- A nurturer’s mentality
- Obsessed with your client’s success
- An expert at navigating your organization and its products/services
I say this because many MSPs—and many smaller companies, in general—try to have one person perform both of these roles. To that, I have three words: DON’T DO IT.
I repeat, DO NOT BLEND THESE TWO ROLES TOGETHER. I’ve seen it happen, and the MSPs that do this do not grow very quickly.
3. Define Roles and Responsibilities
To avoid this aforementioned mistake, think of each role as a bucket with unique responsibilities.
- You’ve got your Business Development rep, whose primary objective is to keep your salesperson’s schedule full. This person does heavy outbound calling every day, qualifies leads, and then hands them off to your New Salesperson.
- Your New Salesperson holds onsite or (preferably) virtual meetings with these leads, trying to close these new clients. Once that happens, those clients move over to be served by their Account Manager.
- Your Account Managers have the dual objectives of retaining the client (mitigating churn) and growing the account through excellent service and upselling products and services.
You can see the different skills and focus these tasks require, so it’s essential to differentiate the roles.
One thing that each of these roles must do, though, is keep leads and opportunities updated in your system of record. An MSP is only as good as its data, so an outdated or messy database is a liability.
4. Keep Your Team Motivated
This is a huge topic that everyone asks about: How should I compensate my salespeople?
The answer is to create a compensation model that aligns to your revenue targets. For sales members, I’m a firm believer that base salary should never be more than 50% to 60% of the total compensation—otherwise, they have no motivation to sell.
For MSPs, use this as a general rule of thumb and adapt it to your circumstances and your people:
- Business Development reps:
In-house: $50,000 to $70,000 total compensation ($35,000 to $40,000 base)
Outsourced: $75,000 to $90,000
- New Sales reps:
$125,000 to $200,000 total compensation ($65,000 to $90,000 base)
- Account Management reps:
$85,000 to $100,000 total compensation ($45,000 to $60,000 base)
For this type of model to work, though, you have to create a sales commission plan that is advantageous to both you and your employees.
Since not every month is a home run in sales, I also like to include both a quarterly bonus and an annual bonus (both starting at achieving 100% of sales goals and rising). This provides even more motivation to make that extra sale at the end of the quarter and/or the end of the year, to get bumped up into the next bonus tier.
Two things I advise when it comes to sales strategies:
- Don’t give your referrals to your new sales reps when they’re in their first 90 days on the job—make your new salespeople focus on netting new clients.
- Don’t pay your salespeople residuals and annuities. I know some MSPs do this, but I believe in keeping your salespeople hungry. A competitive and generous commission plan can achieve this.
5. Don’t Expect Magic Right Away
Be realistic in your expectations. The first 60 to 90 days will be a bit slow as your new salesperson learns your products and services and builds their pipeline of contacts. Allow them this time to develop, and keep an eye on activity, so you can sit down with them to have frank discussions if they’re not meeting their sales goals after the initial learning curve.
With the right leadership, the right people, and the right motivation, you can keep your salespeople hungry while growing your MSP.