Terrible buying process for Managed Services

Posted by Denes Purnhauser on Jun 10, 2016 5:07:38 AM

In Sales, MSP best practices, MSP, consultative sales

terrible MSP sales process
People are talking about MSP sales processes when it comes to discussion of new client acquisition. I believe we should see the process from the customer's perspective and realize that the buying process for them is terrible. Given the current typical buying process, a working future strategic relationship is becoming less and less likely. Let's take a look why the process is broken and see if we can figure a fix.

There are three major underlying issues causing this trouble:

  1. Unknown criteria of the decision
  2. Vague decision making processes
  3. No compelling differentiation among choices

 

Issue 1. Would you buy a car for your spouse through an RFP?

A request for proposal (RFP) is a solicitation, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals. (Wikipedia)

RFPs are useful tools for firms who can precisely define a request, the services involved, that is innovative and isn’t yet mainstream. Some, however, are just fishing, and end up selecting by price. They don’t know how to make the best decision on the provider, so it comes down at the cost.

The problem for us of course is that if they’re not looking at the other (non-price) properties of the decision, we’ll have a hard time to winning the deal at a rate that will let us provide excellent service.

RFP does not permit the two parties to get to know each other, which hinders the ability to align on a strategic relationship which will lead to the maximized value creation.

Quickfix 1. Actively define the criteria of the decision

If we’re able to precisely nail down the criteria of a decision, our job would be easy. Unfortunately like the car choice for our spouse, most decision making is not logical but emotional, and the criteria seem to be endless. A car can be sold or left in the lot based on its colour alone, or entirely on its reported performance in crash tests.
Our truly superior approach, that actually does help our clients streamline, isn’t getting the chance. We have to use an emotional metric to sway an emotional decision - that you are the genius of technology and have the relevant attributes and skills to assuage any doubts they made the right choice - even at double the price.

We’ve been using the ITCq - IT Competitiveness Quotient to measure how competitive a client is with their technology. These have 56-165 criteria respecting customer size, all logically related to long-term success through better adoption of technology, but at the end of the day when they have a score like 35 out of 100, there will be an emotional aspect to the decision. This is something that needs attention... and we know how to make it better, and can show measurable results.

 

Issue 2. Would you teach a farmer how to sell potato?

Prospects will always try to second guess the pros on how to buy Managed Services Provider services. They don’t want to be involved in the discovery process (just gimme a price), want shorter meetings (I’m busy), try not to make business decisions on IT (moving to the cloud is a technical issue) and so on.

Every client is different - their circumstances, legacy systems, people, management maturity and so on. For an Managed Services Provider to be in a position to offer anything substantial takes time. The client may see this as a sign you’re not moving forward.

If they don’t see any specific process of engagement they start trying to control the situation and sidetrack you even with a process in your mind.

Quickfix 1. Show them your process and stick to it.

One awesome member showed me a laminated card the other day. It showed a process of how to create an excellent IT Service provider relationship in 7 steps.

It started with a first meeting to check the potential fit. Then it went to an IT Strategy discovery workshop (used the ITCq process) to understand the business related problems and how the IT needs to align with it. Then it moved to data gathering on systems, documentation and infrastructure followed by a technical audit. The next step was the first instance of any talk about price and a contract.

Visible steps were required for a great relationship and none of them was redundant. Our member showed their client that this is how it works. The Managed Service Provider was able to drive and lead the process.

Again the process was visual on a laminated card...I wish I could share it...drop me an email and I’ll get you in contact with the author.

 

Issue 3. Are you selling a freaking winter tire?

When looking for commodities, there’s a few criteria, and there’s price. But MSP isn’t a winter tire, is it. You need to make the distinction.

Before you go relying on your track record of fast and professional service, consider this: everybody makes the same claim.

Quickfix 3. Eliminate competition with consultative approach

One: let the client be understood. We have to understand their priorities, realities, goals, personality and then only then can we differentiate ourself.

Two: let the client find out what makes us different rather than telling them yourself. Let them make the decision unconsciously that we are the right fit for them.

Both of these are a natural result of a perfectly conducted consultative sales process. This process focuses on probing questions, listening, summarizing the findings, and expressing the solution and the results.

Probing questions on typical pain points (again an example for that is an IT Competitiveness Quotient questionnaire and report) gives you the talking points to explore the different IT related opportunities and dig deeper only where needed. The questions help drive the conversation and will tell way more about you, your company and your thinking than you can get across by yourself.

After getting deep, summarize the issue and get an understanding about priority. Hint to a solution with a client story to give them the confidence that you’re on the top of the game.

As the process unfolds we cover all their pain points, and differentiate ourselves. They’re confident we’ve already solved these problems (priorities for them) and are a great partner to consult.

Conclusion:

We can blame our clients, the markets or the competition because we are facing price pressure and commoditization, or we can embark on many proactive solutions. Let's apply these three quick fixes and rock your next sales meeting.

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