Five Key Practices of a Successful MSP: #3―Specialized MS Sales Expertise

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5 Key Practices of a Successful MSPHopefully you’ve been following along this popular blog miniseries focusing on the Five Key Practices of a Successful Managed Services Provider (MSP), based on a TSIA research report of the same title. If you haven’t had a chance to check them out, or you need a quick refresh, follow this link to the entire series so far. 

 

And now, moving on to this week’s key practice of a successful MSP: 

#3 – Specialized MS Sales Expertise

This is probably the area in which I receive the most inquiries―and also one of the areas in which the most emotional decisions are made by senior executives. Most MS executives instinctively feel that they need their own sales team for MS―or at least their own MS sales “specialists.”

Conversely, most sales executives feel that they need to control all sales engagements, whether the solution is technology (hardware or software), professional services and support services, or even managed services. Many senior executives fail to understand how complex a managed engagement is. 

How do you take the emotion out of the discussion? Facts. Take a look at Figure 1, captured from TSIA benchmark data. 

Figure 1

MS Sales Org Model - Growth Rate

Take a look at startling difference in the growth rates for companies that use a dedicated or designated sales team for managed services. Note that 60 percent of the MS members use a shared or general sales team, yet the ones that use a dedicated or dedicated sales team have more than five times the revenue growth rate (33 percent vs. six percent). Both are strong growth rates in today’s stagnant technology market. However, there are clear advantages to investing in and developing a team of specialized MS sales experts. 

Here’s an excerpt for more on this topic from the full TSIA research paper: 

At the October 2013 Technology Services World conference, there was a workout session led by Bill Hall from Pretium Partners, a TSIA consulting partner. The purpose of a workout session is to gather a room full of executive participants from TSIA members to engage in thoughtful, collaborative conversation on the session topic. 

In this particular session, there were 27 participants in all. There were 12 sales challenges identified with 50 different skills/competencies required to overcome those challenges. The table in Figure 2 contains a snapshot of some of the data collected. Bill Hall will be publishing a paper in cooperation with TSIA in early 2014 to further expand on the challenges of MS sales. 

Figure 2

MSP Data - Sales Challenge - MS Sales Skills

As you can see, selling managed services can be far more complex than selling either technology or traditional technology attach services such as professional services or support services. Many of these skills are not typically found in traditional technology companies. This means that the skills must be developed in existing organizations or it must be acquired from external sources.
 

Because of the deep and broad skill set required to sell managed services these sales individuals are often fairly expensive resources in high demand. Whether a company makes the decision to acquire or to develop, one thing is certain―having the right managed services sales expertise will require investment. 


So there you have it. Most of us have seen the data that managed services revenues are growing at an explosive rate across the industry. However, tapping into the highest growth rates requires some investment in, and development of, a team of managed services sales specialists. 

Don’t forget to stop back next week for MS Key Practice #4! As always, feel free to drop me a note with your thoughts on today’s blog topic. We’d love to hear your perspective!

Read more posts in the “5 Key Practices of a Successful Managed Services Provider” series:

About the Author

George HumphreyGeorge Humphrey is senior director of managed services research for TSIA. He is a networking and communications industry veteran of over 20 years with extensive experience in managed infrastructure and application services. Keep the conversation with George going. He may be reached at george.humphrey@tsia.com.

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Topics: managed services, revenue growth, sales, benchmarking, managed services providers, managed services sales, Successful Managed Services Providers

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