Steve:
00:00:00
Today, we're going to talk about the lead to appointment conversion rate.
Steve:
00:00:04
And this is a way to measure the effectiveness of your
Steve:
00:00:08
sales team at converting leads into scheduled appointments.
Steve:
00:00:11
I've found that typically it's calculated by dividing the number
Steve:
00:00:15
of new sales appointments by the number of new leads generated.
Steve:
00:00:18
Is this how you would also calculate it?
Paul:
00:00:21
Yeah, pretty much, uh, you know, we don't need to make things
Paul:
00:00:24
more complicated than they already are, especially not in tech.
Paul:
00:00:26
The tech world is the most complicated world ever.
Paul:
00:00:29
Um, but yeah, you would do something like that and you would say, right,
Paul:
00:00:32
how many, what we want to establish is how many leads do we need to
Paul:
00:00:35
generate in order to get a sale?
Paul:
00:00:37
That's the, that's the goal, uh, or, or in order to get an appointment.
Paul:
00:00:41
Um, so it, it, and.
Paul:
00:00:43
I know, um, everyone wants a figure, so whenever I talk about this with anyone,
Paul:
00:00:48
everyone says, give me the figure.
Paul:
00:00:49
What's a good conversion rate?
Paul:
00:00:50
What can we benchmark ourselves against?
Paul:
00:00:52
And, and I'm not going to give a figure, because any figure I give is not going to
Paul:
00:00:56
be the right figure for you in your MSP.
Paul:
00:00:58
See, every business is different, every area is different.
Paul:
00:01:01
You could, you could be an MSP in...
Paul:
00:01:04
You know, in a very quiet state where there aren't many businesses,
Paul:
00:01:08
but people are super loyal and they'll stay with you for 100 years.
Paul:
00:01:11
And, and your lead to appointment conversion rate
Paul:
00:01:16
might be really, really low.
Paul:
00:01:18
You might need lots and lots of leads, but then once you get
Paul:
00:01:21
someone, you keep them forever.
Paul:
00:01:22
Versus you're in New York City.
Paul:
00:01:24
where, you know, everyone's angry all the time and everyone's
Paul:
00:01:26
switching MSP all the time.
Paul:
00:01:28
I don't know if that's the case.
Paul:
00:01:28
I'm just, I'm just guessing.
Paul:
00:01:29
Everyone always seems angry in New York City.
Paul:
00:01:32
And, and actually your, your lead to convert to appointment
Paul:
00:01:35
rate might be really high, but you don't keep people for long.
Paul:
00:01:38
Although, although the average revenue isn't long.
Paul:
00:01:40
So I'm not going to give a, give a figure.
Paul:
00:01:42
What I think you have to do though, is establish exactly as you said, take the
Paul:
00:01:46
number of leads, divide it by the number of appointments, and that's your rate.
Paul:
00:01:50
And the trick is to watch that.
Paul:
00:01:52
And just watch it over the long term, because you're looking for
Paul:
00:01:55
a consistency in the long term.
Paul:
00:01:57
If it's going up, uh, dramatically, or it's going down, or worse, it's doing
Paul:
00:02:01
this, it's fluctuating, then you know you've got some problem and you've got
Paul:
00:02:05
to do something about it somewhere.
Steve:
00:02:07
Well, first of all, on behalf of RocketMSP and Paul
Steve:
00:02:10
Green's marketing, I would like to sincerely apologize to New York City.
Paul:
00:02:14
I love New York City.
Paul:
00:02:16
It's one of my favorite places to go, but you know, I've been, I've been
Paul:
00:02:19
to LA, I've been to New York City.
Paul:
00:02:21
One of them's laid back, one of them's less laid back.
Paul:
00:02:23
And let's be honest, every single person who's visited those places knows that.
Paul:
00:02:27
But yeah, there we go.
Steve:
00:02:29
And, and thankfully, I've never visited either.
Paul:
00:02:32
Really?
Steve:
00:02:33
You know, I don't think I could hang in New York City, because
Steve:
00:02:37
it's all just so fast paced, and I'm not a fast paced guy, I mean,
Steve:
00:02:42
look at me, I'm a big dude, I move slow, I talk slow, I think slow,
Paul:
00:02:50
In which
Steve:
00:02:50
I don't belong there.
Paul:
00:02:52
LA.
Paul:
00:02:52
LA is the place for you, my friend.
Steve:
00:02:54
Let's get back on the KPIs.
Steve:
00:02:56
So you mentioned that, uh, if, if your conversion rate is, is looking good,
Steve:
00:03:02
looking bad, or even if it's wavering.
Steve:
00:03:05
So, so let's talk about this for a moment.
Steve:
00:03:07
Uh, our conversion rate.
Steve:
00:03:09
So, so let's talk about the calculation one more time.
Steve:
00:03:13
So if you had 50 new leads, 10 of them scheduled an appointment, then
Steve:
00:03:17
your lead to conversion rate is 20%.
Steve:
00:03:20
Because it's like...
Steve:
00:03:21
10 divided by 50, right?
Steve:
00:03:24
And that's, that's your percentage.
Steve:
00:03:26
So...
Steve:
00:03:28
This is not talking about closing the sale.
Steve:
00:03:32
This is just talking about getting the sales appointment, the first appointment.
Steve:
00:03:37
So, this, this number is one that, maybe seasonally, but
Steve:
00:03:43
overall, it shouldn't be wavering.
Steve:
00:03:45
It shouldn't be going up and down, because you should have
Steve:
00:03:49
a system or a process in place.
Steve:
00:03:52
And by having a process in place, You'll be able to make, uh, tiny microscopic
Steve:
00:03:57
changes, you know, one month at a time, or, you know, every, every week at a time,
Steve:
00:04:02
however you choose to do these things.
Steve:
00:04:05
But I think you need to give at least a month for a change in order to be able
Steve:
00:04:09
to see how things are trending, right?
Paul:
00:04:12
Yeah, exactly that.
Paul:
00:04:13
And , the thing with MSPs is, the conversion rate is actually going
Paul:
00:04:16
to be like under 1%, just to, just to set some expectations.
Paul:
00:04:20
So as much as I'm, as much as two minutes ago, I was saying, I'm not
Paul:
00:04:23
going to say figures, you know, the MSP sales cycle is so long, I'm And
Paul:
00:04:28
the prospects and the clients out there are so unwilling to shift.
Paul:
00:04:31
They're so scared of technology and getting it wrong that they
Paul:
00:04:35
will stick with their incumbents way longer than they should.
Paul:
00:04:39
And as we all know, it just takes a long time, a lot of marketing
Paul:
00:04:42
to get new clients to sign up.
Paul:
00:04:44
So actually, if you can get a 1 percent conversion rate, as in for every 100
Paul:
00:04:49
leads you generate, one of those books a sales meeting, I think that's good.
Paul:
00:04:53
Good.
Paul:
00:04:53
And I say that, um, because yes, you want to track that over a period of
Paul:
00:04:57
time, but we're, we're, we're going to, unlike any other sales operation, almost
Paul:
00:05:01
anywhere in the world where you might get a 20 percent appointment rate, in
Paul:
00:05:05
MSPs, it's going to be very, very low.
Paul:
00:05:07
So we are, we are going to be talking in the, you know, the 0.
Paul:
00:05:09
8s, the 1.
Paul:
00:05:10
2s, that's the kind of conversion we're going to be tracking.
Steve:
00:05:14
Now, thankfully, uh, you have the luxury of working with, uh,
Steve:
00:05:21
hundreds or thousands of MSPs with your marketing subscription service.
Steve:
00:05:26
So, have you found that, uh, 1 percent is about average across the board
Steve:
00:05:32
for all of those clients of yours?
Steve:
00:05:34
Well,
Paul:
00:05:34
So you're trying to trick me now into giving a figure, uh,
Paul:
00:05:36
which is what I said I wouldn't do.
Paul:
00:05:38
Um, and,
Paul:
00:05:39
uh,
Steve:
00:05:39
already did, so I'm
Paul:
00:05:41
well, no, no, here's the thing is the answer is no,
Paul:
00:05:44
no, I don't know that figure.
Paul:
00:05:46
We don't actually have this conversation.
Paul:
00:05:48
So I work with 700 MSPs in the MSP marketing edge.
Paul:
00:05:52
Everything that we do is about getting leads in and getting
Paul:
00:05:55
up to that sales appointment.
Paul:
00:05:57
But we don't universally have conversations about, uh,
Paul:
00:06:00
about, um, conversion rates.
Paul:
00:06:02
I'm going to re, I'm going to refer you back to the answer I gave at the
Paul:
00:06:04
beginning, which is it, it depends.
Paul:
00:06:06
You know, it depends on your geography, depends on your niche, your vertical.
Paul:
00:06:10
It depends on you, depends on your sales.
Paul:
00:06:12
Things, if you are, if, if, if you, the MSP owner are the marketing
Paul:
00:06:15
and sales department, this is almost not worth you tracking.
Paul:
00:06:19
'cause the, the KPIs are only useful if, if you're doing
Paul:
00:06:21
activity on a regular basis.
Paul:
00:06:23
Whereas if you've got two salespeople out there and you've got a telephone
Paul:
00:06:26
operation, you've got, uh, HubSpot and you've got Mentum and you've got all the
Paul:
00:06:30
tools and activity, that's when something like this is, is worth looking at.
Paul:
00:06:34
But yeah, it's gonna be very, very low.
Paul:
00:06:35
It's gonna be, be really, really super low just because.
Paul:
00:06:40
It's with MSP sales.
Paul:
00:06:41
It's all it just takes time.
Paul:
00:06:43
Someone that joins your LinkedIn connects to your LinkedIn today, which is a lead.
Paul:
00:06:48
Someone connecting to your LinkedIn is a lead.
Paul:
00:06:51
Uh, that person might not be ready, willing and able to
Paul:
00:06:54
buy for five years, right?
Paul:
00:06:56
They might.
Paul:
00:06:56
It might be in their head today that they're not very happy
Paul:
00:06:58
with their incumbent They wish they could get a better level of
Paul:
00:07:02
service or something like that.
Paul:
00:07:04
But if they're not ready today and they're not ready next year or the year after,
Paul:
00:07:07
the year after that, then, you know, that's going to have a negative effect on
Paul:
00:07:11
your, on this KPI that you're tracking.
Paul:
00:07:14
But saying that, the weird thing about marketing is that...
Paul:
00:07:18
So, typically results are consistent over time.
Paul:
00:07:21
So even though you're dealing with hundreds or thousands of different
Paul:
00:07:24
people, and lots of different parts of a moving machine, if, let's just say
Paul:
00:07:28
for example, you establish that your lead to sales appointment conversion
Paul:
00:07:32
rate is 1%, let's just say that.
Paul:
00:07:34
If you keep doing what you were doing, you should maintain that
Paul:
00:07:39
conversion rate at approximately 1%.
Paul:
00:07:41
So it might dip a little bit up or dip a little bit down.
Paul:
00:07:44
But if you don't change anything for much of the time, that will stay consistent.
Paul:
00:07:48
It's when you start to see it go down, you know that something has changed.
Paul:
00:07:51
And either the marketplace has changed, or one of the cogs in your machine isn't
Paul:
00:07:56
working properly, or someone somewhere is pulling the wool over your eyes.
Paul:
00:08:00
Or something like that.
Paul:
00:08:01
So, yeah, it's, it's, uh, you know, you, it's an important one to, to look
Paul:
00:08:05
at if you've got lots of cogs in the, in, in the process and if, particularly
Paul:
00:08:09
if you're using other people to make that marketing happen and to make
Paul:
00:08:12
those sales appointments be booked.
Steve:
00:08:13
When reviewing this metric, the lead to appointment conversion rate,
Steve:
00:08:19
are there other metrics that you would say, go hand in hand with this one?
Paul:
00:08:25
Yeah, I think quality, um, is, is one that we've talked about
Paul:
00:08:28
on a previous, um, a previous KPI.
Paul:
00:08:31
So not all sales appointments are desirable.
Paul:
00:08:34
In fact, what we want to do is we want to qualify that someone, before we ever
Paul:
00:08:37
sit down for a sales appointment with them, there's no point sitting down with
Paul:
00:08:41
someone who's a one man band, uh, uh, you know, or even three or four users, unless
Paul:
00:08:46
you're, you're, you're You're desperate for any monthly recurring revenue.
Paul:
00:08:48
Most MSPs have a minimum five or 10 user.
Paul:
00:08:51
And so we've got to, we've got to make sure that we're sitting
Paul:
00:08:54
down with the right people.
Paul:
00:08:55
Better for you to do one quality sales appointment a month than to do
Paul:
00:08:59
five non quality sales appointments.
Paul:
00:09:02
You just become a busy fool otherwise.
Paul:
00:09:04
So I do think getting that number, establishing that number and then
Paul:
00:09:07
establishing a quality score.
Paul:
00:09:08
And do you know the simplest way to do that, Steve?
Paul:
00:09:10
Traffic like them.
Paul:
00:09:11
Right, give them, give them, based on a set of criteria, and this can take
Paul:
00:09:15
30 seconds to do, you can look at how many staff have they got, what kind of
Paul:
00:09:19
revenue do they do, uh, do they have a budget, um, and that's probably,
Paul:
00:09:23
actually those are probably the main ones, maybe, maybe what kind of industry
Paul:
00:09:26
they're in, what, what do they do.
Paul:
00:09:27
Perhaps geographically, where are they based?
Paul:
00:09:29
Because I know we can do clients anywhere, but for the sales process,
Paul:
00:09:32
it helps, and the account management process, it helps if they're close.
Paul:
00:09:35
Based on those five criteria, you can give someone a traffic light.
Paul:
00:09:39
Red, no, not good prospects.
Paul:
00:09:40
No, we're not having a sales appointment.
Paul:
00:09:42
I'm terribly sorry.
Paul:
00:09:43
Here's the number of my competitor down the road.
Paul:
00:09:46
My competitor I don't like down the road, go and see them.
Paul:
00:09:48
Amber, yellow, yep, they could be a good prospect, but we're going to have to
Paul:
00:09:53
make them meet a minimum revenue level.
Paul:
00:09:56
And there's nothing wrong with that, by the way.
Paul:
00:09:57
If you have a minimum, let's say you will not work with someone if it's below 1,
Paul:
00:10:01
000 a month, and someone comes in and it's going to be 700, and you say to them right
Paul:
00:10:05
from the get go, look, you're a little bit smaller than our basic, our lowest
Paul:
00:10:09
client threshold, just so you know it's going to be a minimum of 1, 000 a month.
Paul:
00:10:14
And there's no you wouldn't say it in those exact words, but there's
Paul:
00:10:17
nothing wrong with saying that.
Paul:
00:10:18
So that might be your amber, and then green, of course, is go, go, go!
Paul:
00:10:21
This is exactly the kind of prospect you want.
Paul:
00:10:24
Go out there, reel them in, turn them into a new Porsche, or a pension pot,
Paul:
00:10:29
whichever those interest you right now.
Steve:
00:10:34
when reviewing this metric, how often do you review the metric
Steve:
00:10:39
with your sales or marketing teams?
Steve:
00:10:42
And, how often do you make changes to affect these numbers?
Paul:
00:10:47
Great questions, and the answers to both of those are, it depends.
Paul:
00:10:50
So, again, if you're a big MSP, lots of activity, lots of people doing lots
Paul:
00:10:54
of things, you want regular reporting.
Paul:
00:10:56
Right down to, you might go for weekly reporting.
Paul:
00:10:58
I mean, weekly might be overkill.
Paul:
00:11:00
Um, but, but definitely monthly reporting.
Paul:
00:11:03
And, and then that means that...
Paul:
00:11:05
As you make a change, you can then see exactly how that change has affected,
Paul:
00:11:09
uh, that the COGS has affected the machine that you've put together.
Paul:
00:11:13
Um, I think if you're a smaller MSP, you're doing less activity,
Paul:
00:11:17
and this is going to be the, you know, 80 percent of all MSPs, then
Paul:
00:11:20
even monthly might be overkill.
Paul:
00:11:22
You might, you might do it monthly just because any regular thing you can
Paul:
00:11:26
get into a habit to is a good thing.
Paul:
00:11:28
But if not, quarterly, uh, would be a case.
Paul:
00:11:31
It depends how much you're changing.
Paul:
00:11:33
If you, if you are on it and you're like, right, we're going to get this up.
Paul:
00:11:36
We're going to make this better.
Paul:
00:11:37
We're going to fix it.
Paul:
00:11:38
We're going to put in place a system.
Paul:
00:11:39
We're going to have lots of sales appointments.
Paul:
00:11:41
Then of course you want more regular reporting.
Paul:
00:11:44
It's, it's kind of the same as your, uh, as, as with your CPA, isn't it?
Paul:
00:11:47
In the, you know, when you're growing the business and you're.
Paul:
00:11:50
Doing lots of things and you're investing, you want monthly
Paul:
00:11:53
management accounts from your CPA.
Paul:
00:11:55
Whereas actually, when you're kind of coasting, and we do all of us have years,
Paul:
00:11:58
certainly once we've grown a business, we have years where we're just coasting.
Paul:
00:12:01
We're not reinvesting this year, we're not taking a lot of profit out.
Paul:
00:12:04
Do we need those monthly management or those cash flow forecasts?
Paul:
00:12:08
Perhaps not, because we're not doing so much activity.
Paul:
00:12:10
So it is very much a case of it depends on what you're doing.
Steve:
00:12:14
Paul, this has been wonderful.
Steve:
00:12:16
I appreciate you coming on here, man.
Steve:
00:12:17
Thank you.
Paul:
00:12:18
It's an absolute pleasure and I'll be delighted to come back on again.
Paul:
00:12:21
Thank you very much.
Paul:
00:12:22
Cheers, Steve
00:00:00
Today, we're going to talk about the lead to appointment conversion rate.
Steve:
00:00:04
And this is a way to measure the effectiveness of your
Steve:
00:00:08
sales team at converting leads into scheduled appointments.
Steve:
00:00:11
I've found that typically it's calculated by dividing the number
Steve:
00:00:15
of new sales appointments by the number of new leads generated.
Steve:
00:00:18
Is this how you would also calculate it?
Paul:
00:00:21
Yeah, pretty much, uh, you know, we don't need to make things
Paul:
00:00:24
more complicated than they already are, especially not in tech.
Paul:
00:00:26
The tech world is the most complicated world ever.
Paul:
00:00:29
Um, but yeah, you would do something like that and you would say, right,
Paul:
00:00:32
how many, what we want to establish is how many leads do we need to
Paul:
00:00:35
generate in order to get a sale?
Paul:
00:00:37
That's the, that's the goal, uh, or, or in order to get an appointment.
Paul:
00:00:41
Um, so it, it, and.
Paul:
00:00:43
I know, um, everyone wants a figure, so whenever I talk about this with anyone,
Paul:
00:00:48
everyone says, give me the figure.
Paul:
00:00:49
What's a good conversion rate?
Paul:
00:00:50
What can we benchmark ourselves against?
Paul:
00:00:52
And, and I'm not going to give a figure, because any figure I give is not going to
Paul:
00:00:56
be the right figure for you in your MSP.
Paul:
00:00:58
See, every business is different, every area is different.
Paul:
00:01:01
You could, you could be an MSP in...
Paul:
00:01:04
You know, in a very quiet state where there aren't many businesses,
Paul:
00:01:08
but people are super loyal and they'll stay with you for 100 years.
Paul:
00:01:11
And, and your lead to appointment conversion rate
Paul:
00:01:16
might be really, really low.
Paul:
00:01:18
You might need lots and lots of leads, but then once you get
Paul:
00:01:21
someone, you keep them forever.
Paul:
00:01:22
Versus you're in New York City.
Paul:
00:01:24
where, you know, everyone's angry all the time and everyone's
Paul:
00:01:26
switching MSP all the time.
Paul:
00:01:28
I don't know if that's the case.
Paul:
00:01:28
I'm just, I'm just guessing.
Paul:
00:01:29
Everyone always seems angry in New York City.
Paul:
00:01:32
And, and actually your, your lead to convert to appointment
Paul:
00:01:35
rate might be really high, but you don't keep people for long.
Paul:
00:01:38
Although, although the average revenue isn't long.
Paul:
00:01:40
So I'm not going to give a, give a figure.
Paul:
00:01:42
What I think you have to do though, is establish exactly as you said, take the
Paul:
00:01:46
number of leads, divide it by the number of appointments, and that's your rate.
Paul:
00:01:50
And the trick is to watch that.
Paul:
00:01:52
And just watch it over the long term, because you're looking for
Paul:
00:01:55
a consistency in the long term.
Paul:
00:01:57
If it's going up, uh, dramatically, or it's going down, or worse, it's doing
Paul:
00:02:01
this, it's fluctuating, then you know you've got some problem and you've got
Paul:
00:02:05
to do something about it somewhere.
Steve:
00:02:07
Well, first of all, on behalf of RocketMSP and Paul
Steve:
00:02:10
Green's marketing, I would like to sincerely apologize to New York City.
Paul:
00:02:14
I love New York City.
Paul:
00:02:16
It's one of my favorite places to go, but you know, I've been, I've been
Paul:
00:02:19
to LA, I've been to New York City.
Paul:
00:02:21
One of them's laid back, one of them's less laid back.
Paul:
00:02:23
And let's be honest, every single person who's visited those places knows that.
Paul:
00:02:27
But yeah, there we go.
Steve:
00:02:29
And, and thankfully, I've never visited either.
Paul:
00:02:32
Really?
Steve:
00:02:33
You know, I don't think I could hang in New York City, because
Steve:
00:02:37
it's all just so fast paced, and I'm not a fast paced guy, I mean,
Steve:
00:02:42
look at me, I'm a big dude, I move slow, I talk slow, I think slow,
Paul:
00:02:50
In which
Steve:
00:02:50
I don't belong there.
Paul:
00:02:52
LA.
Paul:
00:02:52
LA is the place for you, my friend.
Steve:
00:02:54
Let's get back on the KPIs.
Steve:
00:02:56
So you mentioned that, uh, if, if your conversion rate is, is looking good,
Steve:
00:03:02
looking bad, or even if it's wavering.
Steve:
00:03:05
So, so let's talk about this for a moment.
Steve:
00:03:07
Uh, our conversion rate.
Steve:
00:03:09
So, so let's talk about the calculation one more time.
Steve:
00:03:13
So if you had 50 new leads, 10 of them scheduled an appointment, then
Steve:
00:03:17
your lead to conversion rate is 20%.
Steve:
00:03:20
Because it's like...
Steve:
00:03:21
10 divided by 50, right?
Steve:
00:03:24
And that's, that's your percentage.
Steve:
00:03:26
So...
Steve:
00:03:28
This is not talking about closing the sale.
Steve:
00:03:32
This is just talking about getting the sales appointment, the first appointment.
Steve:
00:03:37
So, this, this number is one that, maybe seasonally, but
Steve:
00:03:43
overall, it shouldn't be wavering.
Steve:
00:03:45
It shouldn't be going up and down, because you should have
Steve:
00:03:49
a system or a process in place.
Steve:
00:03:52
And by having a process in place, You'll be able to make, uh, tiny microscopic
Steve:
00:03:57
changes, you know, one month at a time, or, you know, every, every week at a time,
Steve:
00:04:02
however you choose to do these things.
Steve:
00:04:05
But I think you need to give at least a month for a change in order to be able
Steve:
00:04:09
to see how things are trending, right?
Paul:
00:04:12
Yeah, exactly that.
Paul:
00:04:13
And , the thing with MSPs is, the conversion rate is actually going
Paul:
00:04:16
to be like under 1%, just to, just to set some expectations.
Paul:
00:04:20
So as much as I'm, as much as two minutes ago, I was saying, I'm not
Paul:
00:04:23
going to say figures, you know, the MSP sales cycle is so long, I'm And
Paul:
00:04:28
the prospects and the clients out there are so unwilling to shift.
Paul:
00:04:31
They're so scared of technology and getting it wrong that they
Paul:
00:04:35
will stick with their incumbents way longer than they should.
Paul:
00:04:39
And as we all know, it just takes a long time, a lot of marketing
Paul:
00:04:42
to get new clients to sign up.
Paul:
00:04:44
So actually, if you can get a 1 percent conversion rate, as in for every 100
Paul:
00:04:49
leads you generate, one of those books a sales meeting, I think that's good.
Paul:
00:04:53
Good.
Paul:
00:04:53
And I say that, um, because yes, you want to track that over a period of
Paul:
00:04:57
time, but we're, we're, we're going to, unlike any other sales operation, almost
Paul:
00:05:01
anywhere in the world where you might get a 20 percent appointment rate, in
Paul:
00:05:05
MSPs, it's going to be very, very low.
Paul:
00:05:07
So we are, we are going to be talking in the, you know, the 0.
Paul:
00:05:09
8s, the 1.
Paul:
00:05:10
2s, that's the kind of conversion we're going to be tracking.
Steve:
00:05:14
Now, thankfully, uh, you have the luxury of working with, uh,
Steve:
00:05:21
hundreds or thousands of MSPs with your marketing subscription service.
Steve:
00:05:26
So, have you found that, uh, 1 percent is about average across the board
Steve:
00:05:32
for all of those clients of yours?
Steve:
00:05:34
Well,
Paul:
00:05:34
So you're trying to trick me now into giving a figure, uh,
Paul:
00:05:36
which is what I said I wouldn't do.
Paul:
00:05:38
Um, and,
Paul:
00:05:39
uh,
Steve:
00:05:39
already did, so I'm
Paul:
00:05:41
well, no, no, here's the thing is the answer is no,
Paul:
00:05:44
no, I don't know that figure.
Paul:
00:05:46
We don't actually have this conversation.
Paul:
00:05:48
So I work with 700 MSPs in the MSP marketing edge.
Paul:
00:05:52
Everything that we do is about getting leads in and getting
Paul:
00:05:55
up to that sales appointment.
Paul:
00:05:57
But we don't universally have conversations about, uh,
Paul:
00:06:00
about, um, conversion rates.
Paul:
00:06:02
I'm going to re, I'm going to refer you back to the answer I gave at the
Paul:
00:06:04
beginning, which is it, it depends.
Paul:
00:06:06
You know, it depends on your geography, depends on your niche, your vertical.
Paul:
00:06:10
It depends on you, depends on your sales.
Paul:
00:06:12
Things, if you are, if, if, if you, the MSP owner are the marketing
Paul:
00:06:15
and sales department, this is almost not worth you tracking.
Paul:
00:06:19
'cause the, the KPIs are only useful if, if you're doing
Paul:
00:06:21
activity on a regular basis.
Paul:
00:06:23
Whereas if you've got two salespeople out there and you've got a telephone
Paul:
00:06:26
operation, you've got, uh, HubSpot and you've got Mentum and you've got all the
Paul:
00:06:30
tools and activity, that's when something like this is, is worth looking at.
Paul:
00:06:34
But yeah, it's gonna be very, very low.
Paul:
00:06:35
It's gonna be, be really, really super low just because.
Paul:
00:06:40
It's with MSP sales.
Paul:
00:06:41
It's all it just takes time.
Paul:
00:06:43
Someone that joins your LinkedIn connects to your LinkedIn today, which is a lead.
Paul:
00:06:48
Someone connecting to your LinkedIn is a lead.
Paul:
00:06:51
Uh, that person might not be ready, willing and able to
Paul:
00:06:54
buy for five years, right?
Paul:
00:06:56
They might.
Paul:
00:06:56
It might be in their head today that they're not very happy
Paul:
00:06:58
with their incumbent They wish they could get a better level of
Paul:
00:07:02
service or something like that.
Paul:
00:07:04
But if they're not ready today and they're not ready next year or the year after,
Paul:
00:07:07
the year after that, then, you know, that's going to have a negative effect on
Paul:
00:07:11
your, on this KPI that you're tracking.
Paul:
00:07:14
But saying that, the weird thing about marketing is that...
Paul:
00:07:18
So, typically results are consistent over time.
Paul:
00:07:21
So even though you're dealing with hundreds or thousands of different
Paul:
00:07:24
people, and lots of different parts of a moving machine, if, let's just say
Paul:
00:07:28
for example, you establish that your lead to sales appointment conversion
Paul:
00:07:32
rate is 1%, let's just say that.
Paul:
00:07:34
If you keep doing what you were doing, you should maintain that
Paul:
00:07:39
conversion rate at approximately 1%.
Paul:
00:07:41
So it might dip a little bit up or dip a little bit down.
Paul:
00:07:44
But if you don't change anything for much of the time, that will stay consistent.
Paul:
00:07:48
It's when you start to see it go down, you know that something has changed.
Paul:
00:07:51
And either the marketplace has changed, or one of the cogs in your machine isn't
Paul:
00:07:56
working properly, or someone somewhere is pulling the wool over your eyes.
Paul:
00:08:00
Or something like that.
Paul:
00:08:01
So, yeah, it's, it's, uh, you know, you, it's an important one to, to look
Paul:
00:08:05
at if you've got lots of cogs in the, in, in the process and if, particularly
Paul:
00:08:09
if you're using other people to make that marketing happen and to make
Paul:
00:08:12
those sales appointments be booked.
Steve:
00:08:13
When reviewing this metric, the lead to appointment conversion rate,
Steve:
00:08:19
are there other metrics that you would say, go hand in hand with this one?
Paul:
00:08:25
Yeah, I think quality, um, is, is one that we've talked about
Paul:
00:08:28
on a previous, um, a previous KPI.
Paul:
00:08:31
So not all sales appointments are desirable.
Paul:
00:08:34
In fact, what we want to do is we want to qualify that someone, before we ever
Paul:
00:08:37
sit down for a sales appointment with them, there's no point sitting down with
Paul:
00:08:41
someone who's a one man band, uh, uh, you know, or even three or four users, unless
Paul:
00:08:46
you're, you're, you're You're desperate for any monthly recurring revenue.
Paul:
00:08:48
Most MSPs have a minimum five or 10 user.
Paul:
00:08:51
And so we've got to, we've got to make sure that we're sitting
Paul:
00:08:54
down with the right people.
Paul:
00:08:55
Better for you to do one quality sales appointment a month than to do
Paul:
00:08:59
five non quality sales appointments.
Paul:
00:09:02
You just become a busy fool otherwise.
Paul:
00:09:04
So I do think getting that number, establishing that number and then
Paul:
00:09:07
establishing a quality score.
Paul:
00:09:08
And do you know the simplest way to do that, Steve?
Paul:
00:09:10
Traffic like them.
Paul:
00:09:11
Right, give them, give them, based on a set of criteria, and this can take
Paul:
00:09:15
30 seconds to do, you can look at how many staff have they got, what kind of
Paul:
00:09:19
revenue do they do, uh, do they have a budget, um, and that's probably,
Paul:
00:09:23
actually those are probably the main ones, maybe, maybe what kind of industry
Paul:
00:09:26
they're in, what, what do they do.
Paul:
00:09:27
Perhaps geographically, where are they based?
Paul:
00:09:29
Because I know we can do clients anywhere, but for the sales process,
Paul:
00:09:32
it helps, and the account management process, it helps if they're close.
Paul:
00:09:35
Based on those five criteria, you can give someone a traffic light.
Paul:
00:09:39
Red, no, not good prospects.
Paul:
00:09:40
No, we're not having a sales appointment.
Paul:
00:09:42
I'm terribly sorry.
Paul:
00:09:43
Here's the number of my competitor down the road.
Paul:
00:09:46
My competitor I don't like down the road, go and see them.
Paul:
00:09:48
Amber, yellow, yep, they could be a good prospect, but we're going to have to
Paul:
00:09:53
make them meet a minimum revenue level.
Paul:
00:09:56
And there's nothing wrong with that, by the way.
Paul:
00:09:57
If you have a minimum, let's say you will not work with someone if it's below 1,
Paul:
00:10:01
000 a month, and someone comes in and it's going to be 700, and you say to them right
Paul:
00:10:05
from the get go, look, you're a little bit smaller than our basic, our lowest
Paul:
00:10:09
client threshold, just so you know it's going to be a minimum of 1, 000 a month.
Paul:
00:10:14
And there's no you wouldn't say it in those exact words, but there's
Paul:
00:10:17
nothing wrong with saying that.
Paul:
00:10:18
So that might be your amber, and then green, of course, is go, go, go!
Paul:
00:10:21
This is exactly the kind of prospect you want.
Paul:
00:10:24
Go out there, reel them in, turn them into a new Porsche, or a pension pot,
Paul:
00:10:29
whichever those interest you right now.
Steve:
00:10:34
when reviewing this metric, how often do you review the metric
Steve:
00:10:39
with your sales or marketing teams?
Steve:
00:10:42
And, how often do you make changes to affect these numbers?
Paul:
00:10:47
Great questions, and the answers to both of those are, it depends.
Paul:
00:10:50
So, again, if you're a big MSP, lots of activity, lots of people doing lots
Paul:
00:10:54
of things, you want regular reporting.
Paul:
00:10:56
Right down to, you might go for weekly reporting.
Paul:
00:10:58
I mean, weekly might be overkill.
Paul:
00:11:00
Um, but, but definitely monthly reporting.
Paul:
00:11:03
And, and then that means that...
Paul:
00:11:05
As you make a change, you can then see exactly how that change has affected,
Paul:
00:11:09
uh, that the COGS has affected the machine that you've put together.
Paul:
00:11:13
Um, I think if you're a smaller MSP, you're doing less activity,
Paul:
00:11:17
and this is going to be the, you know, 80 percent of all MSPs, then
Paul:
00:11:20
even monthly might be overkill.
Paul:
00:11:22
You might, you might do it monthly just because any regular thing you can
Paul:
00:11:26
get into a habit to is a good thing.
Paul:
00:11:28
But if not, quarterly, uh, would be a case.
Paul:
00:11:31
It depends how much you're changing.
Paul:
00:11:33
If you, if you are on it and you're like, right, we're going to get this up.
Paul:
00:11:36
We're going to make this better.
Paul:
00:11:37
We're going to fix it.
Paul:
00:11:38
We're going to put in place a system.
Paul:
00:11:39
We're going to have lots of sales appointments.
Paul:
00:11:41
Then of course you want more regular reporting.
Paul:
00:11:44
It's, it's kind of the same as your, uh, as, as with your CPA, isn't it?
Paul:
00:11:47
In the, you know, when you're growing the business and you're.
Paul:
00:11:50
Doing lots of things and you're investing, you want monthly
Paul:
00:11:53
management accounts from your CPA.
Paul:
00:11:55
Whereas actually, when you're kind of coasting, and we do all of us have years,
Paul:
00:11:58
certainly once we've grown a business, we have years where we're just coasting.
Paul:
00:12:01
We're not reinvesting this year, we're not taking a lot of profit out.
Paul:
00:12:04
Do we need those monthly management or those cash flow forecasts?
Paul:
00:12:08
Perhaps not, because we're not doing so much activity.
Paul:
00:12:10
So it is very much a case of it depends on what you're doing.
Steve:
00:12:14
Paul, this has been wonderful.
Steve:
00:12:16
I appreciate you coming on here, man.
Steve:
00:12:17
Thank you.
Paul:
00:12:18
It's an absolute pleasure and I'll be delighted to come back on again.
Paul:
00:12:21
Thank you very much.
Paul:
00:12:22
Cheers, Steve
