Why some MSPs grow and others stall

Why some MSPs grow and others stall rarely has anything to do with technology. Most of the ones that stall have perfectly good engineers and a tidy little stack. They just sell something you only experience once you have bought it, and behave as though that were a detail. That detail is exactly where the difference sits between an MSP adding ten per cent every year and one that has been on the same revenue for three years waiting for the market to pick up.

You probably recognise the situation. You have a good technical crew, satisfied existing clients, and still the revenue moves about the same every quarter. Not much new business comes in. When you go looking for the cause, everyone points somewhere else: marketing does too little, sales kicks no doors in, the propositions are too generic, the market is hard.

What sits underneath is nearly always the same pattern. You have no separate sales craft in house. Your engineers do the commercial work on the side, because they know the client and understand the technology. They are just not trained to hold a business-level conversation with a buying group of four people who want nothing to do with bits and bytes. The result is a weak cup of coffee, a lot of dissatisfaction on the way back, and a pipeline nobody dares steer on because the dates say nothing. And meanwhile you invent propositions that sit on the website as one-size-fits-all with a sector sticker on them, because that is what everyone does. That is where growth stops.

First get your own house in order, then grow MSPs

What works in practice is not selling harder. It is reversing the order. Before you bring in a sales professional or launch a campaign, there has to be a plan that says where you want to go, which proposition landscape fits that, and which clients you actually want. Without that foundation you put someone with half the means on a whole task, and that burns money.

In concrete terms that means three things. One: propositions that connect to the client, not to the vendor catalogue. Two: sales as a separate craft, split from technology, with someone who reads the news and digs into the client of the client. Three: a commercial process that is explicit, with clear steps, owners and tools per step. All three at once. If one is missing, you know in advance which conversation you will be having in six months.

Sales is a process, not a black box

Some MSP owners make sales into something magical, as though a good seller will score if you just let them loose. That is exactly why that seller is gone again after eight months. Sales is a process. At one MSP we saw working up close, the pipeline sits in twelve stages, of which the last is lost and the first five are pure marketing. Warming up, evaluating, sending different messages, seeing who comes out positive and who stays in the queue. Marketing does not end when sales begins. If sales gets no further for a while, the card goes back in the marketing tray until it is ready again.

A predictable pipeline has two ingredients nobody enjoys. The discipline to put everything in the CRM, and the honesty to use realistic closing dates instead of hopeful ones. Sales is positive by nature, so you have to allow for the bias of each person putting things in. Measure that consistently and at some point your system can say: there is 100k of projected annuity in the next three months, and on historical deviation 83,000 euros of that will come in. That is not magic. That is data you already have, just not used.

What belongs with that, and is often forgotten, is that you do not invent those stages in an afternoon. Every stage has an exit criterion: what has to be true before an opportunity moves on? With “first conversation held” that is not only “we talked”, but for example “we know the client three priorities for this year and who is in the buying group”. If that is not there, the card does not move. That feels slow at first, but it prevents you discussing a forecast in six months that nobody believes in any more.

What a niche really is, and what it is not

With growth the question inevitably comes: should we not niche down? The answer is more nuanced than the social media version. For a general MSP of up to 10 or 15 people, regional presence can work perfectly well, that is the reason many clients choose. For larger parties focus on verticals becomes more important. But a great many MSPs that put “we do healthcare” on the website simply deliver standard service with a sector sticker. There is no real healthcare context, no healthcare-specific process, no substantive difference. That is not a niche, that is marketing packaging. Volume can be a niche too, by the way, as long as you can really deliver and substantiate better, cheaper and more flexible. The question is never whether you claim a niche, but whether you understand how things really work at that client and whether security, compliance and operations are genuinely set up differently at that vertical level.

And then the order with existing clients. The acquisition cost of a new client keeps running. Someone in Dublin put it already: buying a one-person firm with ten clients is cheaper than acquiring ten clients. For most MSPs that want to grow, the first move is not cold calling, but increasing share of wallet at existing clients. Cross-sell and deep-sell on other lines. Then a serious referral strategy: everyone with commercial contact actively asks the question. Someone else mouth takes you further than your own elbows. Only once those two are running, and the house is in order, does dedicated new business belong. In that order.

The cost of the wrong order

What happens in practice when you reverse that order we have seen often enough to recognise the patterns. You hire an experienced sales manager on a solid salary. They walk in without propositions that connect, without a defined process, without a CRM containing anything usable. In month three they deliver their own plan that clashes with what the owner had in mind. In month six a few conversations have been held, no deals closed, and the doubt sets in. In month nine they leave, and you conclude that “sales does not work for us”. While the problem was never that person. It was that you put them in an empty kitchen and asked for a three-course menu.

You make the same mistake with marketing agencies. You hire one to deliver leads. They deliver leads. Those leads are not qualified for the profile that fits, because that profile is not sharp. Sales complains about the quality, marketing complains about the follow-up, and after a year everyone at the table says the agency has to be replaced. Here too: the agency was not the problem. The brief was empty. What you needed first is an ideal customer profile that goes further than “companies of 50 to 250 staff in the west of the country”, and a proposition that says something recognisable to them.

MSPs that want a role in the market over the coming years will not get away with engineers doing the commercial work on the side and a pipeline built on gut feeling. It asks for a plan, a proposition that connects, sales as a separate craft, and data you dare to steer on. Anyone who gets that in order grows predictably. Anyone who economises on one of those four stays stuck in good intentions. Want to know where your own outfit stands on those four points? Book a conversation and we will go through it together.