MSPs that close 60% to 70% of their non-referral opportunities aren't more charismatic than everyone else. They have a repeatable sales process. To build one: become a sales-driven organization, document a sales playbook, hire experienced salespeople, add a sales manager once the team grows past a few reps, and give every rep a real quota backed by backwards math. At a 33% close rate, one new client a month takes about 3 first-time appointments, 6 qualified leads and 20 raw leads. Fixing the process alone can be worth $900,000 a year in new MRR, with no extra marketing spend.
The argument happened during a Rapid Implementation Workshop I was hosting.
In the room were about 50 MSP business owners, all there to learn how to implement a marketing plan to drive more inbound leads. Part of that workshop was the "secret shop" exercise. Unbeknownst to attendees, we would play prospect and secret shop them while they were at the conference, recording and grading how the inbound call was handled.
As you can imagine, most failed. Miserably.
But one guy wasn't having it.
We had called his office saying we had a server down. Our current IT company was unable to help us. Had they asked (and they didn't), they would have learned "Brandy" was calling from a 30-person law office a few miles from their location. She was the operations manager who was sick and tired of the lack of response from their current MSP. She wasn't in a contract and was getting break-fix services, but she WAS open to discussing a managed services agreement, only AFTER they helped with this urgent problem.
When she called this particular MSP, they told her, "The soonest we could get someone out there is two weeks from now." No discovery questions asked. No qualifying who she was and where she was calling from. No name collected. Just a "Sorry, we can't help you," and click.
When I played the call to the owner, he defended it. In a highly agitated tone, he said,
"We PRIORITIZE our managed customers! My team knows that and that's why we can't go running out there at the drop of a hat!"
My response was not what he expected. I said, "You've spent thousands of dollars to be here with me and have taken DAYS away from your office to figure out how to get more prospects to call your office. You are likely to spend even more time, money and talent on getting the strategies I'm giving you implemented to make that phone ring. If THIS is how you are going to respond to a call that marketing produces, pack up your laptop now and leave. I can't help you."
Harsh? Yep.
True? Absolutely.
Thankfully, he didn't leave. He understood and embraced what I was saying. Unfortunately, most MSPs never do.
They think "all" they have to do is "more marketing" to get more clients, but they don't think through the ENTIRE process that happens after marketing WORKS and delivers a prospect with potential to become a client.
They fall short because they think if they just set up a professional-looking website, post a little on social media, print out some good-looking brochures and business cards and maybe run some ads or attend some trade shows, somehow new clients will show up.
Most MSPs like marketing.
But sales?
Not so much.
"We're NOT salespeople…we're techs."
"We DO NOT believe in hard selling. We present the options and let the prospect choose."
"We don't sell anyone on anything. We just do a good job and let our reputation stand on its own."
Funny how I've only heard those kinds of phrases coming out of the mouths of small MSPs with no real growth for YEARS.
If you truly want more clients, you can't just do marketing. You must couple that with a strong, strategic sales process that is tightly managed, consistently delivered and highly effective at closing deals WITHOUT discounting or concessions.
Why Do MSPs Lose Deals And Compete On Price?
Why does a prospect buy from one MSP over another? Is it price? Trust? Credentials?
The reasons are varied, but most MSPs erroneously blame the prospect and take no ownership of the outcome. "They were tire kickers." Or, "They were cheap!" Or, "They didn't want to make a decision right now."
The truth is? YOU didn't SELL them.
Let's take price for a minute, since that's the most common objection I hear.
Given no other logical reason upon which to base their decision, prospects will often default to buying on price.
Read that again. It's important.
But the key is the "given no other logical reason." I'd add: given no other compelling reason.
When a prospect sits across from two MSPs who both seem competent, both have good reviews, and both offer roughly similar services, and one is substantially cheaper, they pick the cheaper one. Not because they're cheap. Because they have no other way to differentiate. No framework for deciding who is worth more. No reason to pay more.
YOU WOULD DO THE SAME.
Therefore, YOUR job in the sales process is to give that prospect the certainty that buying from you is the logical, correct decision regardless of price.
That means building enough trust, demonstrating enough expertise and communicating enough value that price becomes secondary. A prospect who genuinely trusts you does not shop on price. A prospect who barely knows you has nothing else to go on.
The 5 Things Most MSPs Get Wrong In Their Sales Process
Horrible handling of inbound leads. No live answer, broken webforms, no way of booking an appointment from your site, and leads that disappear into voicemail and never get called back for days, or even at all. This instantly creates a negative impression from the start. If you act this lackadaisical when I'm trying to give you money, how will you act once I sign the deal? The old adage, FIRST IMPRESSIONS LAST, is true for a reason.
ZERO structured sales process. They wing every meeting, and it shows. You can sense when someone lacks structure and confidence. You can sense when someone is just asking questions to prepare a quote, vs. someone who's asking smart, strategic questions to solve a problem. The latter takes structure and a lot of training. Sloppiness and randomness are obvious to prospects and give them hesitation. Remember, your SALES process is the first real example of what it will be like to work with you. Do NOT wing this!
Selling to the wrong people. Prospects who can't afford managed services, who are too small, too big, who aren't the decision-maker or who don't really fit your ICP (ideal client profile). MSPs often waste time and money marketing to people who were never going to buy in the first place, then decide the marketing is broken, the marketplace is "unwilling to spend money" or come to some other false conclusion.
Lowball prices. Some MSPs quote low hoping it will increase their chances of winning a deal, not realizing it actually decreases trust with prospects who are basing their decision on competence and quality, not price. Plus, I've seen DOZENS of MSPs lose on price even when they were only charging $50 per end user. Going low doesn't do anything but give the MSP a haircut on margins that are already too low. (Here's how to raise your prices without losing clients.)
No ability to differentiate, demonstrate value or defend your recommendations. Every MSP claims to be "proactive," "responsive" and "experienced." None of those claims mean anything. Why are you the safer, smarter choice over all the other MSPs out there making the same claims? How can you PROVE it? (Start with your answer to "why should we buy from you?")
"But I'm Not A Salesperson. I'm A Tech!"
Every day, babies are born. Doctors will tell the parents, "It's a boy!" or "It's a girl." I've never heard of a doctor saying, "Good news, momma! You just gave birth to a SALESPERSON!"
That's because GREAT salespeople aren't "born." They're developed. Selling is a skill that anyone can learn. Are some better at it than others? Of course. But that doesn't mean YOU can't learn the fundamentals and get "good enough" to close deals.
The MSPs who close 60% to even 70% of the non-referral opportunities they get in front of are not necessarily more charismatic or more aggressive than you. They simply have a repeatable process: a sequence of steps, conversations and materials that builds trust before, during and after the meeting. (I break down the meeting itself in the seven steps to close an MSP sale.)
But to do this, you have to get rid of your negative, disempowering beliefs about salespeople and selling in general, or you'll never put the time and effort into developing your sales playbook.
Let me be clear: Selling is not manipulation. It's not pressuring someone to buy. It's not convincing someone to buy something they don't need. Salespeople HAVE used manipulation, pressure and outright lies to get deals, but that doesn't mean selling consists of those things.
Here's my definition of selling: Helping a prospect make a buying decision that's actually GOOD for them.
You don't have to be a "salesperson" to do this well. You have to have three things:
- ETHICS and the willingness to tell a prospect the truth if you can't help them.
- DEEP expertise on the problem you solve and the solution you sell, so you can provide valuable advice and insights.
- A well-designed, well-practiced PROCESS that positions you as a TRUSTED AUTHORITY.
The 5 Core Components Of A Productive MSP Sales Department
If you're serious about growing your MSP, you need to develop more than a sales playbook and process. You need to develop a sales department.
Most MSPs are owner-led sales teams of one, where the CEO is still closing all the deals. In fact, we often see this up to $5 million in sales, sometimes beyond. That creates a significant bottleneck in growth, because the owner is doing sales part-time, and likely not doing it well at that.
So when should you start hiring a salesperson or team? Quite simply, when you're ready to grow AND you're committed to putting the time into building it. Otherwise, you'll be stuck doing owner-led sales for far too long, which slows growth and prevents you from being a true CEO.
To build that sales engine, here's what you need at a MINIMUM.
Component #1: Become A Sales-Driven Organization
Step one is making a serious commitment to improving your sales process and becoming a "sales-driven CEO," as Robert Herjavec, the Shark Tank star, once said to my audience of MSPs.
A "sales-driven" CEO does the following things differently:
- They look at every product or service they create through the lens of WHAT THE CUSTOMER WANTS TO BUY (what's called being "market driven") instead of through the lens of what they value or feel people should want to buy, but don't.
- They see sales as a critical department that's as important as the technical team delivering services, and they fund and staff it appropriately instead of ignoring it, hiring the cheapest talent possible and leaving it entirely unmanaged.
- They don't let the operational and technical team "tail" wag the sales "dog." Like our opening story, they make sure there are people and resources who can respond to qualified opportunities, even if it's inconvenient.
- They insist on having good systems and processes, leading and trailing metrics, and real accountability to quotas.
If you're an MSP owner and don't have a sales team yet, start with being a serious student of selling so YOU become at least competent. Read multiple books, watch videos and attend courses on sales, communication, negotiation and influence.
Every sales trainer under the sun has a slightly different approach: takeaway selling, question-based selling, SPIN selling, Gap selling, etc. I recommend you read and learn from them all, since it will deepen your understanding.
When I owned TMT, I mapped out an entire sales playbook and gave word-for-word questions, "sound bites" and a process specific to MSPs. I can happily report that members who employed this approach closed north of 70%, selling at prices higher than the competition. If you were or are a member still, you should look for that training. Today, that same approach is the foundation of my MSP sales training.
Becoming a "sales-driven" CEO will help you develop the second component: your sales playbook.
Component #2: Develop A Sales Playbook
A sales playbook is the documented, repeatable system for how your company acquires new clients.
It maps out the rules and the process: who we target, how we prospect, what we say, what questions we ask, how we run discovery, how we present value, how we handle objections, how we follow up, and how we close.
Most MSPs don't have a sales system.
They have random, untrained people running around like free-range chickens, doing and saying whatever they feel like doing or saying in the moment. Complete unpredictability and dysfunction, zero discipline and strategy.
One person says this. Another says that. One follows up five times. Another follows up once. One qualifies hard. Another chases anything with a pulse. That's not a sales process. That's a collection of idiots improvising every day, and it will not only bleed you dry of profits, it can hurt your company's reputation and do long-term damage.
A sales playbook changes this by documenting the MOST EFFECTIVE approaches and strategies and putting them into a proven process that can be taught, coached, measured and replicated again and again, shortening the learning curve and giving you the highest chance of closing deals without discounting or concessions.
Great MSPs who generate millions in net profits know you can't scale random in ANY part of your organization. They know salespeople don't show up pre-trained on how to sell their services. They don't give their salespeople the two-part training of "Good luck" and "Hang in there!"
They create a process, train it well and manage to it.
Component #3: Hire Experienced, Competent Salespeople
A sales department is only as good as the people in it.
If you hire poor performers, you'll get poor performance (yeah, I know…thank you, Captain Obvious). Yet I feel the need to say this because, over and over again, I see MSPs hiring salespeople because they're "good talkers" or because they're cheap (SDRs living in another country).
When I'm hiring a salesperson, I look for someone with a proven track record of success SELLING in a similar environment and product or service.
A top salesperson at the Verizon store might be awesome selling to consumers who walk in looking to buy, but may be totally out of their element talking to the CEO of a manufacturing plant about IT support. That account manager who treats you like gold may NOT be effective as an outside sales rep who has to open doors with new prospects, because they haven't had to do that in their current job.
Some of the best tools I've found for hiring a good salesperson (and anyone, really) are in the Topgrading process of hiring. The first tool I can't live without is the Career History Form (you can find it online). The second "tool" I swear by is their TORC process, or "threat of reference check."
That's where I ask a potential hire to arrange an introduction to talk to their previous managers and bosses. Not where they are currently working, of course, but in every other job they worked at. I want to talk directly to the person they reported to so I can fact-check everything they're telling me about their performance.
If they won't do that, I don't hire them.
The TORC process of talking to a previous boss gives me the real-real on their strengths and weaknesses. It confirms they're telling me the truth when they say they were a top performer and hit quota every month. It also gives me insights into what they are like to manage.
I'm still amazed at how many people DON'T do this for EVERY hire they make. I'm sure you, like me, have hired some real duds. I'm talking liars, cheaters and grossly unethical individuals. Yet they've gone on to work somewhere else after I fired them, and I've never heard from a single person looking for a reference check…and with LinkedIn and other social media, it's not hard to find me.
What about other personality tests, like Kolbe, Working Genius, etc.? I'm not opposed to them, but I wouldn't lean on them too much. I would, instead, use them as another data point and lean more on the TORC process and their actual track record.
If you hire the RIGHT person, everything gets easier, so slow down, interview well and never hire out of desperation.
Component #4: Hire A Mature, Competent Sales Manager
If you are a relatively competent sales-driven CEO, you can manage a single salesperson plus a couple of account managers for a while. But once you get to one or two SDRs, a couple of outside sales reps and two or more account managers, you need to hire a sales manager.
The sales manager's job is to grow salespeople in both quality (performance) and quantity (bodies). They are constantly monitoring, managing and coaching the sales team. They are constantly interviewing and looking for your next sales rockstar. And believe me, you want to be CONSTANTLY recruiting, so that when you find that unicorn that's actually available, you HIRE THEM.
Doing this job well is a FULL-TIME job.
You as the CEO should be heavily involved and in complete alignment with your sales manager, but you will not be able to do the work necessary to run a productive sales department because of the time involved. Your sales manager should be:
- Recruiting and hiring salespeople
- Onboarding new reps to get them productive fast
- Building and maintaining your sales playbook
- Setting quotas and helping each rep build a plan to achieve that quota with certainty
- Coaching, training and monitoring each salesperson's performance
- Listening to sales calls and providing direct coaching to the reps to improve
- Ensuring compliance with the sales playbook, preventing reps from going off script and saying (or selling) things you can't do, won't do or that are not good for the company
- Having team meetings, daily huddles and one-on-one meetings with each rep
- Assisting reps in closing deals
- Handling any obstacles, problems or issues the salespeople have that are getting in the way of closing deals or slowing them down
- Creating commission reports and ensuring the reps are paid correctly
- Managing the culture of the department, firing bad eggs and underperformers
The 4 roles your sales manager will need to hire and manage are:
- The SDR (sales development rep), who's responsible for prospecting to book appointments with new prospects, handling inbound leads and even assisting at events.
- The outside sales rep, or OSR, who's responsible for signing new clients.
- The account manager, who's responsible for managing your current clients and selling them on new services, handling price increases, projects and tech-stack alignment.
- The sales support person or team, who are responsible for setting up the CRM, dialers, lists, marketing materials, etc., that help the sales team do their job.
Component #5: Have Real Quotas, Tracking And Accountability
I'm amazed at how many MSPs hire their first salesperson and don't give them quotas (MRR, projects and total contract value, or TCV) and "backwards math" activities for prospecting (like dials, offices canvassed, networking events attended, referrals secured, etc.).
This needs to be STEP ONE before you hire a new sales rep, for several reasons:
- You want to be extremely clear about what the sales rep needs to produce in MRR, profits and sales in order to keep their job. That's what a quota is: a clear, achievable goal you expect them to produce in new sales. The rep needs to be fully aware of it, bought into it and confident they can achieve it.
- You want to give your sales rep a realistic plan, based on reasonable backwards math, to hit at least the minimum targets required to keep their job and, ideally, hit the OTE (on-target earnings) they want to make.
- It becomes very clear to you, early on, whether a salesperson is going to "make it" or not, so you don't have to burn through 3 months (or more!) of paying out thousands in salary and benefits with nothing to show for it. If your new sales rep refuses to follow the plan and put in the activity, there's no point in keeping them around for months.
Backwards Math: How To Set A Sales Quota Your Rep Can Actually Hit
"Backwards math" is simply a reverse-engineering process where you work backwards from a goal to map out the activities and exact metrics required to hit the goal. (I walk through the full framework in the backwards math framework.) For example, if you wanted to get 1 new managed client a month, your backwards math might look something like this:
| Step | Rate | What you need each month |
|---|---|---|
| Goal | 1 new managed services client | |
| First-time appointments (FTAs) held | 33% close rate | 3 FTAs held |
| FTAs scheduled | 75% actually sit | 4 FTAs scheduled |
| Marketing-qualified leads (MQLs) | 67% schedule an FTA | 6 MQLs |
| Raw leads | 30% are qualified | 20 raw leads |
At a 33% close rate, you need 3 FTAs (first-time appointments) per month with new prospects to close 1 new deal.
If 75% of your scheduled FTAs sit, that means you really need 4 appointments scheduled to ensure 3 "sit," or are held. Not all prospects will keep that initial sales appointment, for all kinds of reasons: they no-show, decide they aren't interested anymore, request to cancel, etc.
If about two-thirds (67%) of your MQLs (marketing-qualified leads) schedule an FTA, your marketing needs to produce 6 MQLs every month.
If only 30% of ALL raw leads are qualified (MQLs), you need to produce 20 RAW leads per month to get 6 MQLs.
Obviously, the above percentages vary from MSP to MSP, from one campaign to another and even from one rep to another. But YOUR job is to know YOUR percentages and map out the exact prospecting and marketing activities your sales reps need to conduct in order to achieve their quotas.
Next, you need to look at these metrics WEEKLY to make sure you're on track. If you tell your sales rep they need 4 FTAs scheduled for the month, every week in your sales and marketing meeting you're verifying they have 1 on the calendar for that week. If they don't, there's a discussion about what THEY are going to do to get one done.
This same accountability has to apply to the marketing team. They are responsible for getting inbound leads and providing the sales team with the support they need.
That's backwards math in a nutshell, and it's incredibly important to track these metrics over time so you can properly forecast growth, manage your team to hit the growth goals you're setting for your MSP, and troubleshoot your sales and marketing funnel with precision instead of a broad-brush "Well, THAT didn't work."
Nearly A Million Bucks Leaking Out Of Your MSP Every Year
Here's what the difference between a broken and a fixed sales process looks like when you manage and improve each funnel metric, because you're actually prospecting the right people, following up appropriately and closing deals at a price point that isn't discounted or "cheap" to win.
| Scenario | Raw leads per month | FTAs / opportunities per month | Close rate | Avg MRR per client | Annualized new MRR |
|---|---|---|---|---|---|
| Before (no process, no oversight, poor performers) | 8 (96 a year) | 2 | 25% | $1,500 | $108,000 |
| After (playbooks, management and trained pros) | 8 (96 a year) | 4 | 70% | $2,500 | $1,008,000 |
| Difference | Same | +2 a month | +45 points | +$1,000 | +$900,000 |
And by the way, these are very reasonable numbers. Most MSPs don't even know they're getting opportunities, because they're not doing proper inbound lead capture or phone handling. They're also not playing the long game of drip marketing and persistent follow-up, which can extract significantly more appointments over time. That IS what a pipeline is.
That's a $900,000 difference per year, simply by fixing the sales process.
No additional marketing spend. No additional outreach. Just a better process with the opportunities you already have coming in.
IMPORTANT NOTE: Some of you are looking at 4 opportunities a month and saying, "If ONLY I had 4 opportunities coming in, I'd be set!" The reality is that you might already have those coming to you, but because your sales radar is switched off and you have ZERO process for identifying and capturing those opportunities, you don't even perceive them as existing. This is a MAJOR point I'm trying to underscore, and it's why I listed "Become A Sales-Driven Organization" as the FIRST component of getting this right.
Where Are You Leaving Money On The Table? A Quick Self-Audit
Here are the most common places MSPs lose deals they should be winning:
- Do you have a documented sales process that covers how to handle an inbound lead all the way through to getting the check? Even if it's just you, the owner, doing sales, you should build this process, checklists and systems so that you can train it to your first rep.
- Do you (and your reps) FOLLOW that process? A process is only effective if followed.
- Do you, the owner, put a priority on sales and selling, or is it seen as a "dirty," unethical process you try to avoid? If the latter, your competition thanks you.
- Are your inbound calls answered live? Not routed to voicemail. Not answered by an automated system. Live, by a trained person who captures the caller's information and books an appointment or gets them to a decision-maker. If the answer is no, you are losing deals before they even start.
- Do you respond to web forms and inbound leads within 3 to 5 minutes? If not, you are statistically unlikely to ever qualify that lead. The window closes fast. Every hour you wait, the probability of making contact drops significantly.
- Do you have a CRM or marketing automation platform that helps you track, segment and follow up on leads and build a quality list of prospects? Do you have a strategic drip marketing system? Can you pull lists of previous prospects who sat an appointment but didn't buy? Or qualified leads that never turned into meetings? Do you have real intelligence on the prospects on your list, such as size of company, who the decision-maker is, who they're outsourcing to, when their contract is up, etc.? Or is your list nonexistent? Or a giant pile of mystery meat that you send a generic blog email to every once in a while? There's money in the list IF you manage it properly.
- Do you send a pre-meeting package (a shock-and-awe box) before every sales appointment? If you show up to meetings as a stranger and hope the prospect is impressed in real time, you are working against yourself. Build trust before you walk in the door by using marketing to differentiate, educate and position you as a trusted authority, not "just another" salesperson looking for a check. (Here's what else to do before the meeting.)
- Do you have someone dedicated to bringing in new clients who is NOT THE OWNER? You need to have people focused on new client acquisition if you want it to happen. You, the owner, doing it part-time when you're available is insufficient to actually grow. Build your "Money Team."
- Do you track and review your marketing and sales funnel numbers weekly? Do you have quotas? Have you done the backwards math to know how many opportunities you need to get a new client? Is that math reasonable and based on your current (or slightly improved) funnel metrics, or a complete fantasy?
Frequently Asked Questions
What is an MSP sales process?
An MSP sales process is the documented, repeatable system your company uses to turn leads into managed services clients: who you target, how you prospect, how you answer inbound leads, how you run discovery, present value, handle objections, follow up and close. MSPs with a real process close 60% to 70% of non-referral opportunities, without discounting.
Why do MSPs lose deals on price?
MSPs lose deals on price when the prospect has no other logical, compelling reason to choose them. If two MSPs seem equally competent and offer similar services, the prospect picks the cheaper one. The fix is a sales process that builds enough trust, shows enough expertise and proves enough value that price becomes secondary.
When should an MSP hire its first salesperson?
Hire your first salesperson when you're ready to grow and committed to building the sales function properly. Many MSPs stay owner-led in sales up to $5 million in revenue, which slows growth. Before you hire, set the rep's quota and the backwards math activity plan, so you'll know early whether they're going to make it.
What roles does an MSP sales team need?
A full MSP sales team has four roles: an SDR who books appointments and handles inbound leads, an outside sales rep who signs new clients, an account manager who grows revenue from current clients, and sales support who runs the CRM, dialers, lists and materials. Once the team grows past a few reps, a sales manager runs all four.
When does an MSP need a sales manager?
A sales-driven owner can manage one salesperson and a couple of account managers for a while. Once you have one or two SDRs, a couple of outside sales reps and two or more account managers, you need a full-time sales manager to recruit, onboard, coach, set quotas, enforce the playbook and run commission reporting.
What is backwards math in sales?
Backwards math works backwards from a sales goal to the activity needed to hit it. For one new client a month at a 33% close rate, you need 3 first-time appointments held, about 4 scheduled, 6 marketing-qualified leads and 20 raw leads. Your own percentages will differ, so track them weekly and set quotas from them.
How fast should an MSP respond to an inbound lead?
Respond to web forms and inbound leads within 3 to 5 minutes, and answer inbound calls live with a trained person who captures the caller's details and books an appointment. Every hour you wait, the chance of reaching that lead drops significantly. Slow responses also tell the prospect how you'll treat them as a client.
The Bottom Line On Your MSP Sales Process
More marketing won't fix a broken sales process. It just sends more prospects into it.
Answer the phone. Respond in minutes. Document the playbook. Hire people with a track record and check it. Give every rep a quota and the backwards math to hit it. Review the numbers every week.
The MSPs closing 70% aren't luckier than you. They have a process.
If you want help building your sales process and training your team to run it, that's exactly what my MSP sales training is built for.