I hear it again and again. It goes something like this.
Daniel, we need you to find us a Business Development Manager. I want to grow our Managed Services Provider. We need more clients in order to grow so we need someone to go out and get more clients for us. That’s a Business Development Manager isn’t it?
Before I answer that question I ask a few of my own.
How do you get new clients currently?
Common answer – word of mouth, referrals from clients, contacts of the business owner.
Have you hired a BDM before?
Common answer – yes but they didn’t work out. After 4 months they had hardly generated any sales at all and we had to let them go.
How do you go about generating leads currently? Do you know how many leads would come in each month and from what sources?
Common answer – all leads are word of mouth currently. We’ve done some email blasts a couple of times but nothing much came of them.
What regular marketing activities do you have in place?
Common answer – none, we’re hoping the BDM can help us with that and we’ll support him/her with some marketing budget to do that. We’ve got some brochures and flyers too.
So here’s the problem. A BDM is not a lead generation machine at least not for MSPs. I have met very few in my time that are effective in this and if they are it’s not a quick process. Here’s a few reasons why:
- The BDM is not the business owner. SMB’s like dealing direct with the business owner.
- The BDM doesn’t know the MSP and their uniqueness as well as the owner, it’s hard to sell someone else’s vision at this level of business.
- MSPs are not a known name to potential target businesses. It’s not like working for Apple or IBM where the name itself opens doors.
- Some non-technical BDM’s can be good at generating leads but the process falls down when they try to close a deal (lack of technical credibility) or when they have to hand over to another more technical engineer, business owner or account manager. Typically either the technical person can’t maintain the relationship or doesn’t put the time into it or the BDM due to lack of technical knowledge didn’t qualify the lead properly making the whole exercise a waste of time.
Business owners are often surprised to find that a BDM will generate less business than the owner, even though the owner isn’t a dedicated sales person, is often untrained in sales and balances many other priorities in their week as well. Points 1 and 2 above explain why. Couple this with the lack of any cohesive marketing strategy, presence and collateral and you can see why the business owner becomes the default sales department for MSP’s and smaller IT companies.
So let’s say you prove me wrong and you know of the perfect lead generating BDM for an MSP. What they won’t be is a marketer, lead generator, one to one salesperson, proposal writer and closer for solution sales and managed service contracts. They may do one or two of those functions well but not all of them or at least not in their first 4 months.
So when it comes to recruiting any type of sales or business development resource, be clear about what you expect from them and make sure it’s possible. Particularly as often BDM’s won’t know or at least won’t let on about the parts of sales and marketing that they can’t do or aren’t strong at. They’re sales people after all.
If you’re an MSP business owner and you’re in this position you are not alone. I have this conversation very regularly and I believe it is the biggest problem MSPs face. Not only that, I’ve blown thousands of dollars myself in my previous IT company (Lindentech) hiring and firing BDM’s because I wanted to grow and needed leads and I thought BDM’s could do that.
So how do you grow your MSP business at a rate faster than organic growth from word of mouth?
That’s a discussion I’d love to have with you, because I’m passionate about helping MSP’s avoid spending in many cases thousands of dollars on a BDM that will be let go somewhere between months 3 and 12 because they’re ineffective in the role they were hired for. Get in touch and buy me a coffee and other than that, the consult is free. Book your appointment here.
If you’re outside of WA then let’s make it a phone chat and I’ll make my own coffee. I am only a phone call away at 1300 70 40 55
Weirdly, to fix your lead generation problem you may not need to recruit anyone at all. But if you do at least you’ll know what’s possible and what outcomes can be reasonably expected from the type of marketing or sales person you hire. In my experience rarely does a BDM alone equal an effective lead generator.