Everyone wants more sales.
The first step in getting more customers is to think about how many more you want this year - and how many you can actually handle.
Are you looking for 1 or 2 new clients or are you looking 10 or 12 new ones – or more? It's important to set a monthly quota to reach your targets because otherwise you have this random, fuzzy concept of growth, not something concrete.
I was speaking with an MSP recently who said they would like to get 20 new clients, each paying an average of $3000/month. This was a one-person company who signed just two new clients last year. While aiming for 20 new clients to get an extra $750,000 in recurring revenue sounds great, the company would collapse under its own weight trying to achieve that growth given their recent 12 month history.
Your Sales Quota Has to Make Sense
If you’re not sure how calculate what your quota should be, or how many new clients you want - or how many you can handle - which is really why I posed the question, here’s how to figure it out.
Let’s say on average every new client you get is worth $500 a month. Yours may be more, I know many MSP’s whose average client is $2000 dollars or more per month.
At $500 per month, that means $6000 dollars per year. Let’s say you have a 3 year contract, and the average client renews it and stays with you for 6 years, that’s means you’ll earn $36,000 dollars customer lifetime value for every new client you get. Simple math.
How many clients of this size (or your average monthly billing rate) can you handle right now?
When would you have to add staff to support the additional work? Take into account when you have to meet payroll compared to when you actually get paid by clients.
Calculating How Many Leads You Need
If you got three new clients, that’s almost $100,000 in customer lifetime value. If your average customer spend is $1000 a month instead of $500, that number now goes to about $200,000. Adding 10 new clients, that’s almost ¾ of a million dollars for your business.
That’s some pretty serious cash to take home. So you first have to decide how many new clients you can ramp up without degrading the quality of work as you hire more staff.
Doing this very simple exercise allows you to think realistically about how many new clients you want to add, which gives you insight into how many leads you need to get.
Calculating your monthly quota is not a one-size-fits-all exercise. It will be different for each company. Using these numbers, you can backtrack your way into calculating what your monthly quota would be.
You’ll have a target: 1 new client every 2 months, or 1 every 3 weeks. Then, you can adjust your marketing and sales efforts based on this realistic target.
Based on your prior sales closing rates, you can calculate how many leads you need to add to your pipeline each month to meet your goals and then create an appropriate marketing strategy to find those leads.
Use a Marketing Plan to Define Monthly Activities
Word of mouth isn't a scalable marketing strategy. Predictable growth won’t happen by itself. You need a plan. It doesn’t have to be complicated. I personally like using checklists because they make life so much easier.
When you set up a new customer, you probably have a list of onboarding tasks for new clients. Your marketing plan checklist is similar.
If you would like a free sample MSP marketing plan template to help you meet your sales goals, download it using this link:
It will provide you with a monthly plan that you can tweak to get the right number of leads into your pipeline based on your realistic sales quota.
Stay in Touch with Older Leads
When a prospect doesn't seem ready to buy, most MSPs stop trying to make a sale. That doesn't mean that the prospect won't eventually buy. It simply means that they need some nurturing first.
Stay in touch with them, even if you don't close the sale right away. You can do this easily with a monthly email newsletter, like Curated Newsletters, which automates the nurturing process. This allows you to focus on other activities while keeping top-of-mind with people who may eventually hire you. When they have an IT issue, they'll think of you first.