During interviews of recent victims, we learned about how he ruins sales and marketing for MSPs and we’ve spotted a trend in his approach.
"Captain Miracles skips sales goals and goes straight to talking action, hoping that whatever he does creates, well... miracles!"
His infection causes MSPs to skip this simple yet crucial step in charting their growth plans and so the purpose of this is to alert you and to share how you can set smart goals yourself.
Why having Sales Goals Matters
If you already know why sales goals matter, just skip to the next section.
However, if you were infected by Captain Miracles, then please read on.
Okay, just imagine you opened your mail at home and in the envelope there was a running bib for a race that's to take place a year from now.
Buthere’s the catch, the distance of the race is a mystery.
It could be a full marathon of 26.2 miles, a 3k, a 100 meter sprint, or get this, an ultra-marathon!
If you’re competitive like me, then not knowing the distance would be disastrous.
You’d be frustrated because you would be clueless on how to train, what milestones to set for yourself, etc.
Unfortunately, this silly scenario is what Captain Miracles creates. It’s not so different from trying to grow an MSP without a clear sales goal.
How to Set Sales Goals
Okay, so we’ll do a short series of questions here and all you have to do is answer each in order to arrive at a sales goal for your MSP.
By how much do you want annual revenue to grow for your MSP in 3 years?
For example, maybe in 3 years you want to grow MRR by $2,000,000 or maybe $1,000,000 is more achievable given your size today.
Your goals are your goals! You can play with these figures, but just think about your business today and your life, and how growth would impact everything in business and life.
Next, we have to reverse engineer your aspirations into metrics that sales and marketing professionals can target.
What percentage of that revenue growth do you expect from new clients vs existing clients?
For example, if your growth goal is $1,000,000 in 3 years and 75% is expected from new clients, then 75% x $1,000,000 = $750,000 is what represents your sales goal from new clients and the $250,000 is from upgrading existing clients.
How many new clients do you need in order to achieve your sales goal?
For example, take the $750,000 and divide by the average annual revenue per new client. Below we’ll assume that a new client brings in $30,000 in annual revenue.
$750,000 ÷ $30,000 = 25 new clients are necessary to achieve your goal in 3 years.
How many sales-qualified leads do you need in order to achieve your goal?
This is where aspirations turn into logical expectations -- the building blocks of a real plan here.
Unfortunately, many MSPs pick a number out of the air but we all know who's fault this is (ahem, Mr. Miracles...).
First, we need to estimate the average closed-won ratio. What is the closed-won ratio? It refers to the percentage of the Sales Qualified Leads (SQLs) that converts into a new customer.
What's an SQL? Typically, they are defined as leads who agree to speak to you, be it over the phone at first or maybe through a video meeting, who meet your criteria in terms of industry, size and location.
MSPs that are new to proactive sales have never tracked their closed-won ratio before and the tendency is to assume that closing warm referrals is the same as closing a marketing-sourced lead, which they have zero practice or process for.
Do not make that mistake of matching close rates! Instead, be humble and assume that the close-rate for marketing sourced leads will be lower than what it is for warm referrals!
For example, if you assume your closed-won ratio for warm referrals is 25% then maybe assume a closed-won of 15% for cold leads is realistic.
Therefore, here’s how you can use that 15% conversion to arrive at how many SQLs you need.
25 new clients ÷ 15% close rate = Number of sales-qualified leads you would need!
This calculates out to 166.66, or let’s just keep this simple to put it at 167 over the next 3 years.
Sales Goals Enable Smart Planning
Having your sales goals in dollars, number of new clients, number of SQLs needed, and the timeline, means your MSP is setting itself up for success.
We all need to know what race we’re running in order to create a smart plan.
If developing a growth plan is something you need help with, do not hesitate to ask Simple Selling. We’ve got experience and a solid track-record.
And in the meantime, be on the lookout for Captain Miracles!