The Biggest MSP Sales Hiring Mistake (And How to Avoid It)
I break down the four common sales problems MSPs face and provide clear guidance on whether you need a BDR, SDR, closer, or simply sales training to solve your specific challenge.
//
Welcome to Repeatable Revenue, hosted by strategic growth advisor , Ray J. Green.
About Ray:
→ Former Managing Director of National Small & Midsize Business at the U.S. Chamber of Commerce, where he doubled revenue per sale in fundraising, led the first increase in SMB membership, co-built a national Mid-Market sales channel, and more.
→ Former CEO operator for several investor groups where he led turnarounds of recently acquired small businesses.
→ Current founder of MSP Sales Partners, where we currently help IT companies scale sales: www.MSPSalesPartners.com
→ Current Sales & Sales Management Expert in Residence at the world’s largest IT business mastermind.
→ Current Managing Partner of Repeatable Revenue Ventures, where we scale B2B companies we have equity in: www.RayJGreen.com
//
Follow Ray on:
Transcript
Speaker 1
Should you hire a salesperson? And if you're asking this question, then chances are you're already thinking about scaling sales and the challenges. Most MSPs, when they get to the stage and they're ready to start hiring salespeople. The mistake that they make is they hire the wrong person for the wrong role, not necessarily the wrong salesperson. Right. Like in terms of interviewing and getting the right candidate, but actually hiring the wrong role, meaning they hire a closer.
::Speaker 1
When they really needed somebody to generate leads, or they hire somebody to generate leads, when what they needed was somebody to be a full cycle salesperson. And the problem with that is you take a salesperson who is supposed to be a revenue multiplier. Right. When I hire a salesperson, I'm expecting to put in $1 and get out 3 or 4 or 5 or $10.
::Speaker 1
You hire in the wrong role at the wrong time, and you actually become a cost center. You turn the thing that was supposed to generate revenue and turn it into an expense. So what we're going to do today is instead of answering, should I hire? What we're going to do is ask the right question, which is what problem are you actually trying to solve so that you make sure you hire the right role at the right time?
::Speaker 1
Let's dive in. Hey what's up? I'm Ray green, former CEO for a private equity group and managing director of the U.S. Chamber of Commerce, now the founder of Mssp Sales Partners, where we help companies scale sales, as well as the managing partner of repeatable revenue Ventures, where we invest in just a few companies a year to help them scale sales towards an exit.
::Speaker 1
And a lot of MSPs ask me when should I hire a salesperson? And the truth is, hiring a salesperson is almost always a welcome idea. If you've got your ops dialed in and you know how to deliver the services that you're selling in a relatively scalable way. Getting a salesperson in there is going to be a revenue multiplier if you hire the right salesperson at the right time.
::Speaker 1
And here's what I see really frequently when we run sales on this with MSP, you know, we we go in and we look at the processes and we evaluate the people and we evaluate the systems and look at the KPIs and everything. And I see a few scenarios happen really consistently. One is they hire a salesperson to remove themselves from the sales process.
::Speaker 1
Right? So I'm a business owner. I'm, you know, I own the IT company and I'm ready to remove myself from having to do all the sales calls. So I go out and I look for a really experienced salesperson who's capable of closing deals. I make them an offer, they join the team, and then I end up sticking them with prospecting work all the time.
::Speaker 1
Right. Because I thought I was ready to remove myself from sales, but I actually don't have enough leads to make that happen. So I say, hey, experienced salesperson that's capable of closing deals. I'd like you to get on the phone and start prospecting and doing a whole bunch of cold outreach. Or another scenario is they hire a BDR or an appointment center or something like that to help them get more bookings.
::Speaker 1
And they say, okay, get on the phone. Let's start dialing. Let's, let's set some appointments. And that salesperson ends up spending 75% of their time cleaning shitty lists, right? Because the list have been scraped or bought and they haven't been scrubbed, they haven't been clean. And so before they're, you know, they're calling wrong numbers and the wrong people and all that shit, they spend 75% of their time calling and cleaning lists.
::Speaker 1
Or another scenario is the the you as a business owner go out. You hire a full cycle salesperson. So it's capable of going out and finding some some new deals, creating their own opportunities, running the discovery, running their proposal, closing those deals. So a great full cycle salesperson that's actually working out really, really well. And then a year goes by, two years goes by and you realize, oh shit.
::Speaker 1
Like I basically have created another key man risk. Meaning I now have somebody that is responsible for everything from lead generation to qualifying to discovery to proposal, and you feel kind of you're held hostage and that doesn't go well in the long run. It's like, I mean, just think about it on the op side or on the tech side of your business, if you had a single point of failure and you had one person that was running all of the tech and all of the support for all of your clients, that's not a place that you really want to be in.
::Speaker 1
The root cause of this is not hiring the right person for the right role at the right time. In other words, not clearly understanding what problem right trying to solve right now, hiring to solve that problem, solving that problem, and then moving on to the next problem. So if you're thinking about hiring, then what we really want to do is we want to take a step back and we want to ask, what problem are we trying to solve right now?
::Speaker 1
Right. And we want to hire the right role for that. Solve that problem, and then move on to the next problem in the sales process. And there's usually four problems that we're we're trying to solve. Like I've done enough of these these audits and evaluated enough in this piece to know that it's it typically comes down to four scenarios that we're looking at first is we've got no leads.
::Speaker 1
Right. Like and this is the most common one. We don't have enough leads. All of our current deals are coming from referrals. All of our deals are coming from random organic search that we don't seem to be able to replicate. So we have no consistent lead flow whatsoever. And here's the thing. If you're an mssp and you're not generating leads today, you don't need a full cycle salesperson.
::Speaker 1
You don't need somebody that's capable of closing these high ticket deals and running the proposal and running everything in the sales process. You need leads. You need somebody that's capable of generating demand for your business. And I know is a IT company within business disaster recovery. Does that have to do with this? No, BTR, you need a business development representative.
::Speaker 1
That is somebody that is going to go out and hunt for you. That is somebody who is focused completely on generating leads, going outbound through cold calls, through LinkedIn outreach, through email. They are putting themselves out there, and their sole job is to generate demand. Their sole job is to increase the awareness of your company. It is to generate some interest in.
::Speaker 1
It is to increase bookings. It is to get people from the marketing ecosystem or no ecosystem. If you're not even marketing and get them into your sales pipeline to book the initial call with somebody who's going to run that process, probably you now typically with the BTR, I'm going to start them with things like cold calls and LinkedIn outreach.
::Speaker 1
I'm going to put them on channels that I can see and that I can coach, and then I can train them on and we can like see these conversations. We can listen to the calls. We can, you know, modify those and optimize those. And as they get better, then we'll start some outreach like the cannabis thing. Then we'll start some networking events.
::Speaker 1
Then we'll start sending them to some chamber things or some benign things, whatever those are. And the other thing I'm looking at is do they have a good list to start with? Like, don't give them I'm old. So, you know, aging myself here, but like, don't give them the metaphorical yellow book, right. Like in the old days it was like, hey, you know, hire a new salesperson.
::Speaker 1
a BDR started, especially in: ::Speaker 1
The more targeted the list is, the more effective they're going to be. So who's an ideal hire for a leader like I'm you know, I'm looking for somebody that's done some outbound before. Like that'd be perfect. You know I've I've seen somebody that's made, you know, cold calls or I've seen somebody that's done real outbound social selling. If I've seen somebody that's done canvasing, like if there's a direct experience phenomenon and I want to look and see, like, is it really good at it?
::Speaker 1
Is it measurable? Can I prove it? If you don't find somebody that has direct experience looking for other forms of sales experience, not inbound experience, not, customer service experience like outbound sales experience. And if you can't find somebody that meets those criteria, look for somebody who has experience in a role that maybe is like kind of like either grunt work, like doing jobs at other people that didn't want to do because let's face it, doing outbound calling and prospecting isn't necessarily the job that everybody wants to do.
::Speaker 1
Very, very few people actually enjoy it. So who is somebody that's proven? Listen, I'll do the job, like show me what to do. I'll, I'll I'll do it more. We've actually found that people from different industries seem to have good experience here. Like, for example, we've had good luck in hiring people that were the bartenders or from the service industry, which, you know, in hindsight, we found it out accidentally.
::Speaker 1
But in hindsight, you go, okay, like there's pay for performance. There's it's kind of a sales job. It's talking to people with the intention of getting their money and providing a service in exchange. So there's some things that you look at. You go, why that kind of makes sense. So those are the things that we're, we're kind of looking for.
::Speaker 1
But if you don't have leads, then what you're looking for is somebody to go generate leads. You're not looking for somebody that's going to help you close deals. You need something. It's going to go outbound and prospect for you and create the demand that you need to get into the pipeline so that you can pull them through the rest of the pipeline, solve the problem that you've got right now.
::Speaker 1
Now, the second problem that we typically see is we have leads like we have different different channels of of traffic that are coming in, but we just don't have the bandwidth to actually follow up with them. And if you are an MSP and you have different sources of leads coming into your business and you simply don't have the bandwidth to effectively follow up with all them, then what you need is an SDR.
::Speaker 1
You need a sales development representative. You need somebody that's capable of grabbing these different sources of traffic and converting them into interest. Right. Like what you have is you have somebody that's kind of expressed some curiosity. Maybe you've got some opt ins to your a lead magnet, maybe you've got some people that are inbound connection requests. Maybe you've got some people that are subscribing or engaging with your newsletter, whatever those are.
::Speaker 1
If you've got different sources of traffic that are coming in and you simply don't have the time to follow up with them, meaning these things are just slipping through the cracks and you're just leaking money, then you need an SDR unit sales development representative, and it's very similar to like a BTR, except SDR typically aren't necessarily doing a whole bunch of outbound outreach.
::Speaker 1
Now in it, we actually kind of merge these terms, like the BTR that does outbound to the SDR that does inbound. We kind of merge them together, frankly, because a lot of people get confused by the acronym BTR and they're like, I don't understand what that has to do with sales. So we just call everybody like an SDR or a center or something like that.
::Speaker 1
But the ERS typically following up on the inbound traffic and they are converting that traffic into appointments. They are qualifying it. They are making sure that there's somebody that's in your market. They're making sure that there's even some idea or some semblance of intent so that they can get that booking. The value of that role is really important, because if you've got a lot of leads and you're not able to follow up on them, but you don't necessarily want to do is use all of your time to go follow up with all of these things because they may not be qualified, right?
::Speaker 1
Like just because somebody is engaging with your newsletter doesn't make them qualified. Just because somebody is hitting your website doesn't mean they have real intent. So just because somebody is hitting these different assets that you have out there doesn't necessarily make them a sales qualified lead, which doesn't mean that it merits your time to be following up on all of them.
::Speaker 1
So you need something that can help you do that, because if you don't, you're missing those opportunities and the thing isn't in it. One client is worth multiple, multiple six figures, maybe seven figures if you have really good retention and low churn. So if you miss just one of these deals, it's going to cost you a lot of money.
::Speaker 1
Okay. So if you've got no leads, go get a BTR. If you've got some leads and no time to follow up, get an SDR. Truth be told, most people who are below 10 million in revenue don't have a binary problem. They have a little bit of lead traffic, but they don't have enough to necessarily keep an SDR busy all day.
::Speaker 1
So most of the time you're going to hire something that's like an SDR, BTR hybrid, and they're going to be doing the inbound capture and conversion, and they're going to be doing the outbound. But the point is, if you've got a lead generation problem, you want to hire a lead generation role to solve that problem. Now, the third problem that you're usually trying to solve in your MSP, if it's not, don't have any leads or it's I have too many leads to actually follow up.
::Speaker 1
The third one is typically I have enough qualified opportunities and I can't keep up with them. As the business owner, I simply can't keep up with the sales activity that's coming into the pipeline. So I have somebody that's qualifying or a system that's qualifying, people that come into the pipeline, and I now just have too many opportunities. So I'm either not doing the the best that I can and these, these closes, I'm letting things slip through the cracks or I'm having these conversations and I'm not doing the follow up that's sufficient to, you know, get the conversion rate, the close rate that I know is actually possible.
::Speaker 1
So if you have too many qualified sales opportunities that are coming into your pipeline for you as the business owner to sufficiently follow up and get the conversion rates that you really need, then the higher that you need to make is a closer and a really good closer is somebody who specializes in taking sales, qualified opportunities and closing them.
::Speaker 1
They are capable of running an effective discovery. And what I mean by effective discovery is not, hey, can they ask the questions that are on a form? I mean, can they run discovery in the sense that they know exactly what questions to ask? They know how to leverage that information. They know where to dig and where to double click on answers, and they know where to move on past past things.
::Speaker 1
They know what symptoms to look for. They know keywords. They know how to figure out the buying process. Like they know how to run discovery intentionally. They know how to. If you're running assessment like get that through the assessment phase, they know how to create the proposal, and then they know how to bring that proposal in and close the deal.
::Speaker 1
A lot of people can ask standard questions or scripted questions in discovery. A lot of people can say, hey, I'm going to send you a link that you've got to click on or, you know, I need, you know, I'm going to send my engineer out to do a quick assessment or something like that. And a lot of people can present a templated proposal, but a true closure is going to run all of those things with a high degree of intention.
::Speaker 1
And their only focus is closing the deal. Now, if I'm looking for a really good closure as an MSP, I'm looking for somebody who has a lot of B2B experience selling services that have a two to, you know, six month, sales cycle. Like, I'm not looking for somebody that's come from the enterprise world where you've got, you know, 17 decision makers and three year sales cycles and all of that shit.
::Speaker 1
Like, I'm looking for somebody that knows I'm trying to compress the the timeline. I'm trying to increase sales velocity. I'm trying to get these deals closed as quickly as possible, not stretch them out, and have all of this shit end up in the follow up graveyard. Right? So somebody that's got experience doing that, I'm cautious of anybody who has sold B2B services behind a big brand.
::Speaker 1
Right. Like if you've got, experience and it's behind a big billion dollar brand, I'm not knocking your sales experience. You may be a phenomenal closer, but it is different. Closing when you've got $100 million marketing budget behind you. And when you are closing for a small business that doesn't. Right? So I'm looking for like key things that help me identify is this person actually capable of closing these deals now?
::Speaker 1
Will a good closer do some prospecting? Yeah, you bet your ass. Like, if I hire somebody into into a closing role, I'm going to tell them straight up. Listen, we're going to feed you as much as we can. We've got our marketing, we've got our our BTR, we've got our SDR, we've got our outreach. But I do not want to see you sitting around with your feet up and going, where are the leads?
::Speaker 1
If you don't have any any deals in the pipeline right now, you still have complete ownership of your pipeline. So yes, I'm going to ask them to go hunt. But here's the truth. Somebody that's a really good closer is unlikely to want to sit at a desk and make 100 phone calls a day like this. The reality like when we when we all started in sales, we said, you know what?
::Speaker 1
I will make 100 calls. I will do really good. I will get to the next stage. I will do really good, I will do, I'll get to the next stage. You really good. Once you've done that and you've proven that I can close high ticket services and I can close consultative sales and things with a, you know, four month sales cycle.
::Speaker 1
And I can, you know, run discovery. I can do proposal. I really probably don't want to sit and do prospecting. I probably don't want to go out to do canvasing door to door. I probably don't want to do those things anymore. Well, I say I won't do them. No, like you've got ownership of your pipeline line. It's just a mindset.
::Speaker 1
I've got plenty of videos on it. Like I don't want to talk to any salesperson that doesn't take complete ownership of their pipeline. So yes, I'll ask them to do some hunting. But between us, I'm not expecting a really good closure to spend all of their time prospecting, so don't hire a closer if you don't have demand to feed them.
::Speaker 1
Now, if you are looking for a closure and you want to make sure that it's a it's an actual closure, it's a good salesperson. It's not somebody that's just a professional networker that you're going to find out 18 months from now. Sounds good. And, you know, checks all the boxes you think but can't close a deal. I've got a video here that'll help you distinguish between the professional networkers and the closers.
::Speaker 1
Go ahead and dive into that if you're at that stage. Now, the fourth scenario that I see is there's sufficient deal flow getting into the pipeline. Right. And you, as the owner, are the person responsible for closing. So you've got enough deals coming in. You're not overwhelmed, right? Like it's it's not like shit's falling off the back of the truck and you're like, Holy crap, I can't keep up.
::Speaker 1
But your close rate sucks, right? So the deals that are coming into the pipeline, you're simply not closing. If you have deals coming into the pipeline and you are a founder, or you are the owner of an MSP, and the closed rate is not where you want it to be, instead of hiring a salesperson, I strongly, strongly encourage you to get sales training.
::Speaker 1
I highly recommend that you work on figuring out the sales fundamentals that are required to increase the close rate, and get it to a respectable amount before you go hire somebody for a couple of reasons. One is if you don't know how to close a deal, chances of you being able to spot somebody and interview them and bring them on board and train them and get them ready to close deals for you, pretty low.
::Speaker 1
Secondly, even if you do get somebody that can close deals and you can't, you basically have no idea what's going on in your sales pipeline. So when you look at the pipeline and you go, hey, man, I thought you were closing deals a few months ago. Now you're not closing deals. I can't figure out what's going on, and they can just basically give you any bullshit that they want.
::Speaker 1
So it is really imperative for for you. And I know a lot of you are technical. You don't like you're like, I really don't want to do sales. Like it's not rocket science. And I was not a born salesman. Like, I'm, I'm actually much more technical than than most people think. I'm an introvert. I was not naturally charismatic.
::Speaker 1
I was not born for sales, I promise you. But I learned the process. I learned the best practices. Sales is a science more than it is an art, and it can absolutely be learned. So I recommend getting some sales training. Learn the fundamentals, learn the best practices, learn what's needed to get that close rate from 10% to at least 30.
::Speaker 1
At least 40% if you're getting cold traffic. If you're if it's all coming from referrals, it should be higher anyway. But if you're getting leads from an SDR, from a BTR, from your marketing, you know, if you're closing 30 or 40%, that's respectable. If you're not closing that, then there are plenty of resources that can help you. In fact, like there's there's plenty of stuff in the toolbox.
::Speaker 1
There's a link below. I've got a free sales toolbox for MSPs that you can dive into. And there's like the objection handling playbook. I've got other resources in there. Or you can book a call with with me or my team. Right. Like, we can we can introduce you to some resource whether we can help or not.
::Speaker 1
But this is not about self-serving. It's not about me selling you stuff. This is about me legitimately saying, as an owner in your business, you want to be able to sell your own product. And frankly, I believe that you could half ass the process. You could half ass the best practices and probably sell as well as most closers, because you should have the highest amount of conviction in your business than anybody else there.
::Speaker 1
And conviction sells more than anything. If I believe in what I'm saying, you're going to see it. You're going to see it in my body language. You're going to see it in my tonality. You're going to see it in the questions that I ask. You're probably going to see it in my reaction when you tell me something like, oh, I can't really afford that.
::Speaker 1
And I'm looking at like a network assessment that says, Holy shit, but just as you're vulnerable as and I'm going to like if I, if I really believe that I can solve your problem, I'm going to say, listen, Sally, like your business and your network is not in a good position right now. Like, and if you if you don't fix it, the chances of a compromise or abnormally high.
::Speaker 1
Right. When you say that because you believe in your service. If you believe in your service, if you don't, completely different ballgame. But that's a completely different video, by the way. But if you if you believe in your services, you're always going to be able to sell better than a salesperson because you can't fake giving a shit, that is your advantage in the sales process.
::Speaker 1
So if the close rate isn't there, it means you've just got to tweak a few things, either in the process or in the execution. All of which absolutely can be done. So that's the rationale behind who to hire, at what stage, like which role is best for you. If you don't have any leads, go get a BTR. If you have leads and you can't keep up with them, hire an SDR.
::Speaker 1
If it's some combination of the two, hire them. Be SDR. Who gives a shit what it's called, but hire somebody to go and generate the leads and focus on the prospecting and getting the opportunities. Don't hire a full cycle salesperson. Don't hire closer. If you've got too many opportunities for you to follow up as the owner, go get yourself a closer.
::Speaker 1
If you're looking to simply improve the close rate because you've gotten the marketing and the prospecting down and the deals are coming in, but you're not able to close them. Get training. The deal here is if you are hiring the wrong role for the wrong stage of business, you are not only going to not get results even if you manage to get results.
::Speaker 1
It's the most inefficient way of getting results because you're going to be paying a inexperienced salesperson's salary rate to go do prospecting work. Are you going to hire an SDR BTR to do list cleaning work, like if the lists aren't clean, right. So it's about capital allocation to you want to make sure that you're investing the right amount of money to solve the right problem at the right time, and then that's going to get you the results that you want.
::Speaker 1
And again, I'm coming at this from the standpoint of how do you want to scale your sales, not how do I get a few more deals in the next six months. It is how do I actually want to scale sales in a sustainable, repeatable way so that we can grow without the chaos and hit maximum potential? So I hope this has been helpful.
::Speaker 1
If it has, feel free to subscribe to the channel. Also join my email. Every week I send out sales tips. The link to join that is below. And I've got the the MSP sales toolbox. If you want resources and templates and other things on how to grow sales, link for that is below as well. But you.
