In my previous blog, “I know we could have done a better job than the company who won the business!” I explored the reasons why resellers and MSPs can lose out to a less technically competent competitor at the pitch stage, and what to do about this. In today’s blog I wanted to explore a problem that we often get asked about at meetings, and which occurs earlier in the sales cycle, and that is why marketing leads do not convert into customers, and how to remedy the situation.
I think one of the common problems here is that most MSPs and VARs have typically been used to growing their business through “organic” growth (i.e. referrals, word of mouth, existing contacts moving to a new company etc). Because this is the type of prospect that MSP and VAR owners have typically dealt with, they expect the sales cycle to work in the same way with new prospects who are generated from their marketing.
In reality nothing could be further from the truth. A referral already knows you and your business either from first-hand experience (because they have worked with you before) or from recommendation from a trusted third party. This means that they already have a level of knowledge about your business and a level of trust in your organisation. The other important factor is that they’ve asked for a recommendation or chosen to contact you now – which almost certainly means that they’ve got business to give you right now.
When it comes to leads generated from your marketing activity, the situation is very different. Marketing is designed to generate a lead with a basic interest in your company/your products and services. But this is very different from them being sales-ready in the way that a referral would be.
For one thing there is a question of timing – given they will almost always have an incumbent IT supplier in place - are they actually in a position where they wish to or contractually are able to shift to a different supplier? As we all know, a change of IT supplier tends to be crisis driven, when there’s been downtime, a security breach or ongoing problems that have led to dissatisfaction with the current supplier.
At any point in time, probably 95% of your target customers don’t actually have any business to give you as they are either happy with their current supplier or contractually locked into their current arrangement.
Of course effective marketing is all about building desire for your products and services, setting yourself up as a thought leader in the particular verticals in which you specialise, differentiating your business, building USPs of genuine value to your target customers and subtly undermining your competitors. But that’s a big topic in its own right and one for a separate blog another day.
The other issue with new prospects is that although your prospective customer has seen your marketing, this only gives them a basic knowledge of your organisation and services. There is still a massive job of work to build the trust that’s needed for them to sign on the dotted line with you, because IT support, cloud services, managed services and security services all require the customer to make a leap of faith. This is not a one-off purchase like buying a car – this is a long-term partnership where the customer is trusting your organisation with their administrator passwords, their cyber security and effectively giving you access to all their business data and IP. It’s the difference between buying a car and handing over the keys of the car they’ve spent their life’s savings on. And in the case of those of you providing cloud services, your prospective customers are also trusting you to store all their data, so should you go bust, suffer a data breach or otherwise not safeguard their data, then they are actually risking their business going under.
It’s little wonder then that there is a huge process of building trust, and a long sales cycle to sell these types of IT services into new customers who don’t have prior experience of your business. In fact, if we look at the entire sales cycle, from generating a marketing lead through to closing the deal being the journey from 0% to 100%, then I would estimate that referral business is starting that journey at around the 80% point. And that’s where most IT company owners are used to starting the journey. Which means when they are starting at 0% they are unfamiliar with the process, and often give up early in the process, or in some cases don’t even carry out any lead nurturing activities at all, because they are treating a new prospect like a referral. This can lead to frustration that marketing leads don’t appear to be converting into customers, or in some cases the perception that they are the “wrong sort” of leads.
The big issue here is that marketing is only designed to generate a lead with a basic interest - they are not sales ready, so there must be a lead nurture sequence in place to convert them into a ‘sales ready’ client. Without this you will have huge leakage of leads - JUST simply covering this problem alone results in a huge impact on your bottom line in the long term.
There’s no doubt that this lead nurturing process – the journey from 0% to 80% - is highly time consuming though. It is also highly skilled work that needs careful strategizing, methodical planning and relentless follow-up.
However help is at hand for time-poor MSP and VAR owners, as lead nurturing is one of the services that Virtuoso Consultancy provides on an outsourced basis. My fellow directors and I have over 40 years combined experience in growing businesses and can deliver sales, technical, operational, business development and marketing experience that is IT sector specific, straight to your door.
We know how to build new business development campaigns and to drive them towards successful outcomes; the initiatives involved are “current,” continually evolving and proven in the demanding trading conditions of today, not in the past. We know how to target and speak to the decision makers in your target markets, but most importantly, we know how to grow your business and make you money!
If this post has resonated with you and you would like to explore how we can help you achieve your growth aspirations, then please do not hesitate to contact myself or my colleague Andrew Banning on 0118 947 1010, or email us at andrewb@virtuosoconsultancy.co.uk or janeg@virtuosoconsultancy.co.uk
For more information about our services please visit www.virtuosoconsultancy.co.uk
To read more posts covering all aspects of sales, marketing and business development for MSP’s and VAR’s, please visit our blog; https://it-business-growth-strategies.blogspot.co.uk/
