MSP Exec On Lessons Learned, Key To Growing The Business: ‘Define Your Sales Process’

‘There’s a sales process for hunting and there’s a sales process for account management. Those two are very different skills, similar but different, but it’s important to articulate how to do it,’ says Brent Morris, vice president of business development at Success Computer Consulting.

If MSPs want to incrementally scale their business to more than $20 million in annual recurring revenue, they must focus on a few key aspects: have dedicated account management and sales teams and create ideal client profiles and well-structured sales processes.

That’s the word from Brent Morris, vice president of business development at Success Computer Consulting, who spoke to other MSPs looking to grow their business at the XChange 2024 event this week in Orlando, Fla. XChange is hosted by CRN parent The Channel Company.

Minneapolis-based Success Computer Consulting is a $24 million organically grown MSP with about 110 employees. The MSP has a mix of 70 percent services and 30 percent hardware.

“I grew up in sales,” Morris said. “I’ve been in organizations where you had to say yes when you meant to say no, but you had to say yes to get the deal. I didn’t want to do that, and I didnt want to cultivate an organization that did those things either.”

In 2011 the MSP needed help with operations as it had oversold its capacity and wasn’t selling enough. It even had a customer that accounted for 25 percent of its revenue, knowing that if that business was lost “things would be bad,” he said.

Today, none of Success Computer Consulting’s customers represent more than 2.5 percent of its revenue.

The company also adopted a manufacturing practice called “Theory of Constraints,” where a business strives for 20 percent free capacity in all areas of the business. “We focus on the flow of work through the system,” Morris said.

Part of the focus on growth was to bring on two to three new customers a month. In fact, since January 2014, Success Computer Consulting has added a new customer each month except for five months. Today, the company generates $1 million to $1.5 million in monthly recurring revenue.

Morris said there are three reasons MSPs want to grow: de-risk, provide opportunities for staff, and “one day sell this thing.”

Sean Torres, co-founder and CEO of Slidell, La.-based MSP In-Telecom, agreed with Morris in that a lot of MSPs he talked about aren’t willing to make investments in a sales organization.

“I’ve made those mistakes, and I wish I would have done them earlier,” he told CRN. “I think a lot of people have trouble with making that investment to scale. That’s been the biggest thing that I’ve seen in MSP game.”

Morris broke down how Success Computer Consulting saw incremental growth in terms of annual and monthly recurring revenue, the challenges the company faced and what he would have done differently in hindsight.

$1 Million To $10 Million Approach

Morris said MSPs should hunt for new logos and then bring in more account managers who will handle those new logos.

“Account management is hard, and it takes up a lot of time,” he said.

To do that, MSPs must first hire a sales assistant to help with simple quotes and administrative work.

“I’m a service-minded individual,” he said. “I want to be able to respond to people quickly—I think that’s an important aspect of what we do. Oftentimes I’ve heard somebody say, ‘I haven’t heard from my salesperson in a month.’

As the company grew, Morris became more of a coach and that’s when he knew the company needed some help. “Our results were bumpy and led to an inconsistent pipeline,” he said.

The challenges during this growth period included a strain in free cash flow, frustrated staff and a constant tension with operations due to Success Computer Consulting needing technical help, assistance with designing solutions and support for account management.

“I just had too much to do ... and it led to really inconsistent results,” he said.

But if Morris could go back, he said he would hire for three different roles: account manager, account executive and sales assistant.

“It’s so critical to define your sales processes, it’s important to understand that there are two, in my estimation,” he said. “There’s a sales process for hunting and there’s a sales process for account management. Those two are very different skills, similar but different, but it’s important to articulate how to do it.”

$10 Million To $20 Million Approach

To get to the next phase of growth, Success Computer Consulting focused on hunting to get those two to three new customers a month.

The team also attended a lot of industry events and participated in associations and peer groups, which Morris said helped the company win a lot.

“Events to me are an important way to give organizations that opportunity to learn how to trust us,” he said.

Finally, the company implemented a co-managed model that led to bigger deals and more opportunity. It also developed a sophisticated marketing engine.

The challenges he faced, however, were too many accounts per account manager, which led to a “leaky bucket.”

“We were bringing in accounts and we were losing them right off the bat. That’s not a fun way to win,” he said.

The company also brought in some customers that were difficult to manage as Success Computer Consulting had yet to develop its ideal customer portfolio. In addition, the sales team didn’t have consistent or dedicated leadership of the respective functions and sales was also limited by the marketing support it needed.

If he could go back, he said he would segment the team into “hunters” and “farmers” as he said farming wasn’t given the seriousness it deserved and the potential it represented. He also said he would dedicate capacity to a development process and align compensation.

“It’s not just about relationship development,” he said. “There’s an opportunity to grab more of our clients’ IT spend if we spend time to get to know them and qualify their needs.”

$20 Million And Beyond

Today, Success Computer Consulting has formalized teams in hunting, farming, marketing and sales operations. It matured its marketing strategy through events, materials and a digital strategy and is going through constant refinements.

“We’re regularly looking at the things that we do at the foundation of the system, going back to the basics,” Morris said. “It’s important to go back to the basics and make sure we all understand that we’re executing well on this.”

But there are still challenges, such as finding the right people, adapting to the market and developing leadership.

“It’s really hard to find somebody who knows how to manage hunters. ... You can find a lot of good account managers, but you can’t find a lot of good hunters.”