How many times have you looked at your business, guessing where the next growth wave is coming from? We remember looking at our MSP performance every year and dreaming about where we wanted it to be the following year, yet not having a clue how the heck we were going to pull it off.
Then we received a simple and straightforward suggestion from a mentor – "Sell more of what you already have to the clients you already have." It's something that's always under our nose but so often ignored since we are too focused on more complex strategies. Sometimes we need a gentle reminder.
The statistics behind the concept are valid enough. The success rate of selling to an existing client is 60-70%, yet only a 5-20% success rate of closing on a new client. Remember, it also costs 5-7 times more to acquire a new client than to retain an existing one.
There are two significant numbers to consider, revenue and profit, when it comes to finding opportunities within your existing client base and evaluating where to focus.
It's easy to get lost in the allure of high revenue numbers, but rub your eyes and remember revenue doesn't do you any good if it's not at a profit. The right margins will always leave more money in your pocket at the end of the month, quarter, or year. Sometimes you might have more profit opportunity on the smallest revenue growth options when considering margin, soft-cost burdens, and the likelihood of adoption.
A simple strategy we call the 'Hidden Gem Report' will help highlight where to focus next in your business for maximum growth impact.
The concept is simple. In a spreadsheet, list all of your product or service offerings in the first column. Then list all of your clients along the top row. Begin by filling in the matrix with a teal color in each cell that matches a client with a product/service that they are not paying for.
Once you've completed that, you should have uncovered many gems of opportunity. Remember, not all opportunities are created equal. The next step takes a bit more work. Now calculate the anticipated revenue and profit for each of those cells based on the client's size with your average selling price and profit margin on the same offering across the clients that currently consume it.
With this put together, you can look across individual clients to see the existing opportunity across your entire stack. Then compare that against the individual offerings to see the opportunity for your existing client base. Now you can determine if a client by client approach is best to increase adoption of your entire stack, or if you are better suited to focus on a single offering across all clients. Don't forget to consider that offerings with previously successful adoption rates are a strong indicator of the likelihood of other clients' interest. It will also offer the ability to use testimonials and case studies to prove value to your other clients.
We hope this helps simplify how you can find the best growth paths for your MSP.