How Agents, MSPs Can Benefit from Being Buddies

Experts have been predicting the merging of the IT and telecom channels for years, and recently the conversation has grown louder as the services from master agents and MSPs more and more overlap.

At Channel Partners Evolution in Philadelphia, Oct. 9-12, Mike Schmidtmann, who owns channel sales firm Trans4mers, will lead a panel to answer the question on everyone’s minds: What sales tips can agents and MSPs learn from each other?

Schmidtmann says that while the agent channel is exploding, the sales innovation is happening within the direct sales teams at managed service providers. Once upon a time, if you wanted to grow sales, you added salespeople. Today, the number of outside agent salespeople is declining, he says, but the ones that are staying are making more money than ever. What does that reveal about agent sales strategies that MSPs can learn from and where agents are falling short that IT providers are excelling?

Trans4mers’ Mike Schmidtmann

Quite a bit, says Schmidtmann. We sat down with him to pick his brain in advance of the event and his “5 Lessons MSP Sales Teams Can Learn From Agents — and Vice Versa,” panel, part of the marketing and technology conference track sponsored by Cyxtera. Here, he talks about the changing nature of channel sales, how applications are changing the game and why the role of trusted adviser is more important than ever.

The following transcript has been edited for length and clarity.

Channel Partners: Explain to our readers how the agent sales model and the MSP sales model play off one another in the market.

Mike Schmidtmann: One of the dynamics in the field is that when outside sales is declining, inside sales is expanding. [Inside sales teams like those at managed service practices] have a lot more appointment setters. You have marketing people that do lead nurturing. You have drip campaigns. So inside sales expanding and outside sales [are] declining. But the outside salespeople that are there are doing better than ever.

CP: How have the structure of channel sales departments changed over time?

MS: [There is] innovation [happening with] sales team construction. It used to be 10 people, 10 salespeople. 100 people, 100 salespeople. Then you might have major accounts and seniors. With the teams [you see among agent sales departments], it’s all for one, one for all. Every nickel that anybody sells goes into the bucket for the whole team. They have a senior consultant who’s the big dog, then they have a junior consultant who’s the rising star, then they have a new person, then they have an administrative person. And they each have defined roles.

What you see in direct sales organizations is if you have a top person get a low-level lead, they’re too greedy to give it up. That actually hurts their productivity because they’re chasing too small of a prospect. With a team, there’s incentive to push it downstairs, because they know they’ll get credit for it if the junior person sells it. Conversely, the junior person gets an opportunity. In the past, they’d never want to give it up because maybe they’d have a chance to sell it, but now they want to push it up because they want the best person with the best experience to push it up. So sales teams are really becoming …

… a thing with forward-looking organizations where you have entire sort of vertical teams with four or more people in the team all working together. That’s a cool concept.

CP: What about sales and marketing automation? Those applications have changed the game, right?

MS: [There] are all the sales tools in the Salesforce ecosystem. Salesforce is not just an application; it’s an ecosystem in which other products are layered in on top of that like management capabilities and qualification applications. There’s this whole range of applications that sit on Salesforce that allow direct sales people to be much more efficient and effective and save time and be more programmatic in their work.

CP: What’s happening to the agents then? What can MSPs learn from the agents and what can the agents learn from the direct sales teams in MSPs?

MS: [A few years ago, telecommunication companies] were finding that their top people were quitting because they could make double the money selling the same product as an agent than they could as a direct. And at first, these companies fought it because they didn’t want to lose their top talent. But then they said, “Let’s go ahead and do it; let’s encourage them but keep them in our ecosystem.” Their cost of sale is less. You don’t have the management overhead. You don’t have the office space. You don’t have the demo room, all that stuff. Marketing, employee benefits, vacation, sick, insurance — they don’t have any of that stuff, right? The best people became agents.

But what the agents don’t have — they don’t have all these sales available to them. They don’t have this sales force. They don’t have the marketing engine. They don’t have all that tech lead retrieval; they don’t have any of that stuff. So what you’re seeing is the new accounts, the new logos are being won by the direct sales organizations, and the agents are nurturing the customers better.

Direct sales is where the innovation is. That’s where the new ideas are coming, the new ways of attracting customers, the way to cross-sell, up-sell, expand your offers. Innovation is driving the direct side, but the money and the loyalty is on the agent side. It’s fascinating.