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MSPs Growth Strategies…When Referrals STOP

By 06.20.18May 10th, 2019No Comments

Most managed service provider businesses were founded on a need and a reputation. A friend or an associate needed a service and someone said,” Hey I worked with this guy that’s a genius with networks and computers. Let’s give him a call and see if he can help us out.” A relationship was formed and a new business was born. After that word of mouth and referrals added a few more clients, and before long a business became a reality.

Businessman Letting ...For most entrepreneurs this organic process is a springboard to growth, but not all. For MSPs the road can have a few more twists and turns. As MSPs begin to have success they are often confronted with a unique problem. Organic business growth spurs the need to build business infrastructure. Technical infrastructure is rarely a problem for MSPS. However, all the other functions of business can be daunting. It’s time to build a marketing and sales organization, accounting and finance department, HR, insurance, real estate, vendor relationships, customer service guidelines, management policies, and the list goes on.  As an engineering guru, you find yourself in unknown waters.

In many cases, MSPs push forward cobbling together various platforms and services that meet the needs of their clients. Their business infrastructure may not be perfect but it is keeping them afloat. Investments have been made in tools and resources to serve their clients, billing systems are in place, ticketing systems are working. There is enough revenue to break even. Life is good!

Then the reality of owning a business kicks in as competition and market conditions start to erode your client base. You lose a few clients. Then the big blow comes, your key client merges with another company and your main source of revenue goes with them. You have all of your people and infrastructure ready to work but you need more business. Since most of your clients were from referrals, you have not invested in marketing and sales. Now you realize that while referrals are the best sales leads you can have, they are not sustainable. Your business is in trouble.

This scenario is happening to MSPs every day. They have built profitable companies from word of mouth and referral but have not invested in the infrastructure, tools, and knowledge necessary generate sustainable business growth and organic customer acquisition opportunities. When your initial customers are generated by referral, it’s natural to think they are just going to keep coming. In reality, they don’t.

Generating new business and growing your client base requires patience and commitment. It is not an overnight fix. However, there some things you can do to start to get your business back on track. You must develop a short term and long-term strategy and stick to it.

5 Tips to help you find new customers and build short term revenue.

  1. Understand your differentiators. What sets you apart from your competition? Do you have a service that is unique? Is your messaging clear and concise? According to Theodore Levitt, a professor at Harvard Business School, “differentiation is one of the most important strategic and tactical activities in which companies must constantly engage.” Example: Is there a free tool that you can offer your clients both existing and potential that will offer them value. (Free scans of different types work well and everyone likes free knowledge and insights.)  It’s a foot in the door!
  2. Invite your existing clients to a breakfast or lunch and ask them to invite one of their clients. Twist the referral process to make it more proactive. Offer information at the event that has value and make sure you are recognized as the expert. Make sure everyone has a take-away. Then follow-up to begin to build a relationship. Send thank you notes to all. Enter them in your CRM system if you don’t have a CRM system, get one, and mark for weekly follow-ups. Be tenacious!
  1. Network Network Network… It’s time consuming and frustrating at times but today’s sales environment is about making connections at a personal level. Get out there and talk to people. Find out what they are doing and how you can help. Networking has more value than just finding a customer.  Many times, networking uncovers problems that need solutions. Listen and learn! “By growing your network, opportunities arise, business partners appear, connections are made and trust is garnered in the local community”, says Sharon Schweitzer, International Protocol Expert, Best Selling Author and Cross Cultural Consultant
  2. Pound those phones. The most hated and dreaded sales and marketing activity ever! Very few people are comfortable with making a cold call, but it is still a powerful and quick way to find customers. Overcome the objections and find out what pain points businesses in your area are having. Find solutions to the problems and take them to market. Just do it!
  3. Explore partnerships. Are there other companies in your area that are complimentary to your business? Example: Are there physical security companies in your area that you could partner with to share customers. Work out a finder’s fee and share sales efforts. Create a postcard for your services that your partner company can hand out. Do a joint webinar or event. Think strategically!

Get started with these short-term strategies and keep an eye out for my next blog: “5 Key strategies for building a long term sustainable sales and marketing strategy”.
It will cover the 5 most important long-term strategies to grow a sustainable, profitable, and scalable business model for the future.


Rick Miller is COO and Partner of The Tek, an MSSP specializing in risk assessment, risk mitigation, protection, and education to SMBs. Rick is a long-term veteran in the IT industry. His success has been founded in propelling start-ups and turnarounds to success and profitability. His experience has helped to grow multiple companies from start-up to profitability.

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