Who to Sell and Who Not to Sell

In this episode of MSP Founders Den, we talk about the delicate topic of how to choose which customers to sell to and which not to.

We also share important lessons we have learned through our years to improve your speech and pitch the idea to potential customers.

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"We believe if you do not measure what you're doing, you won't know if you're growing or slowly dying."

Hey guys and ladies, this is Jhovanny Rodriguez, co-founder of both an MSP and a VoIP services company that sells through the channel. We are here to talk about who to sell to and who not to sell to when it comes to selling MSP services. We talk to a lot of MSPs at events, over the phone, in webinars, and the topic is always the struggle of how to add revenue to their business, so that was gonna be our first topic about how to add revenue to your MSP, so this blog is meant to help you on this journey.

So what are the challenges that MSPs find? Well, getting into situations where they might have some customers that are not the ideal customer. So some of the things that happen is a lack of a good sales engine sometimes leads to you having to basically open the door to whoever comes through the door, and you're not really profiling these customers or being picky enough to be selective for the group of customers that you really wanna serve.

And turns out, these customers are usually the most demanding, the ones that might bring in the revenue, but they also use a lot of your resources, including you as a resource, as the founder or owner of the MSP. And at the end of the day, what you are left with is that you're probably working too hard.

Back in the days, I remember that we have many cases on the MSP side where we were very excited about taking on this particular customer, it was maybe bigger than any other customer we had, or it was a decent-sized customer or maybe we had the promise that if we took care of this one location, that we were going to basically get the kings to the castle and get all of their other businesses or all of the other locations.

But it was rough. And it was rough because maybe we took on a customer that didn't fit our model, and that was the first big red flag for us. You should always be able to ask yourself when you get in front of a new potential customer, do they require something that you don't necessarily do? And you're just willing to take on to basically win the account. Always be ready to evaluate pros and cons, be realistic when going over the list of the value you are acquiring vs the number of efforts involved.

I remember back in those days, this huge MSP we added, located in Manhattan; it was an impressive account, great location, it was right in the middle of Times Square, no doubt their office was impressive. And to make it better, it was a large team. However, their setup was very antiquated and it took four times as much just to keep things running.

The budget wasn't there to do replacements, and as a managed service provider that's contractually obligated to remediate anything that happens on that network, you're left very exposed. What happens if that very antiquated network all of a sudden went down and you have to spend countless hours doing remediation at that network? Yes, that's part of the service that we do, but we have to take preventive measures to make sure that doesn't happen.

I usually say that it's almost like you should underwrite the customer to make sure that this customer qualifies for your unlimited service, so that creates a big impact. So we are here to just share a few lessons that I think would be very helpful for you to look at in terms of how to be more selective, in terms of the customers. I would say look at some of the other videos about kick-starting your sales engine because if that sales engine is working, you're probably gonna get a little more picky or selective about who you let through the door.

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So we're going to show you two lessons that we learned over the years.

These are both while running an MSP and now as a voice provider through the channel.

Lesson #1

The first thing I would do is go through all of your customers and categorize them, take your A, B, C, and D customers, and then for a couple of reasons. You wanna know who those A customers are, what they look like so that way you can get more of them, how do you replicate those A customers.

And then once you know that you kick off that engine and start replicating those A customers, your D customers will be those that you want to potentially very nicely say that probably not a good fit, and we're not gonna be renewing that contract, so that is lesson number one.

Lesson #2

Lesson number two is to go back to that A category and make that a profile of your ideal customer look. If you find that you have a lot of law firms in that category A, then you start saying, "Alright, so my ideal customer, it's a law firm, it's a law firm that has more than 15 employees, it's a law firm that uses a case management system as an example, there's plenty of them out there, but needles are they over a million dollars?"

Maybe you find out and you might be able to get some of these details in your executive review meetings. A lot of people call them QBRs, I like to call them executive review meetings because it doesn't set a frequency, I think some customers meet quarterly, some customers meet semi-annually, and there are some customers that only wanna meet once a year.

So as long as you're doing a minimum of one or two a year where you're meeting with your customers, use that to get to know them, get that profile going and be very frank, say, "Hey look, I want to have more customers like you. Let me ask you some questions, are you okay with sharing?" Level of revenue, you know how many employees they have, then what you're gonna do is expand that to include all their characteristics on that profile.

So that might be doing like golf? Do they play golf? Are they whiskey drinkers? Do they like sports cars? Do they like to travel? What do they like to read? What kind of conferences do they like to attend? What music do they like? And if anything, that last one will make for some nice gifts. And this is all great stuff to help create that perfect partner profile, and it helps you focus your marketing efforts, 'cause now you know who you're talking to.

And then you turn around and everything you do from your social media, your marketing, your letters, your website, focus on speaking to that ideal profile. In our company, we even have a name for the A customer and the B customer. This is a great way to categorize, and that is just a foundation by which you're going to build your marketing efforts and your sales efforts.