MEDDIC Sales Framework for Managed Service Providers

By Gaidar Magdanurov | 30 August 2023

Technical people love frameworks. Frameworks make things easier — instead of sitting in front of a blank page and trying to put ideas on paper to develop a format, you follow the guidelines, fill in the blanks and get an actionable result. While MSPs quickly adopt cybersecurity frameworks like NIST, MITRE ATT&CK, and CKC, they are usually not as well-versed in sales frameworks, partially because of the natural tendency of technical people to stay away from sales and marketing and partially because there are multiple frameworks. It is unclear which one to apply to the sales of management services.

In this post, I would like to explore a simplified MEDDIC framework for lead qualification for MSPs.

The framework is designed to simplify the decision to allocate efforts to recruit a customer. Focusing on the “wrong” customer is the number one sales productivity killer. Instead of spending time with those who can become customers, MSPs tend to spend much time trying to convince those who will not be good customers. Given limited time and marketing resources, the wrong focus is an easy way to lose money on sales and marketing and get disappointed. Let’s avoid that by using MEDDIC.

The MEDDIC acronym stands for:

  • Metrics
  • Economic buyer
  • Decision criteria
  • Decision process
  • Identify pain
  • Champion

Let’s discuss each section and come up with relevant examples from different businesses that can be MSP customers.

Metrics

Most MSPs’ customers are driven by the goals they set for their businesses: revenue, cost, and profit margin. Thus, defining the impact of the services provided by MSPs in terms of the metrics valued by the customers makes much more sense than pitching vague benefits like “everything will work fine” or “you will be happy with our service.”

Let’s consider a business that requires salespeople to pitch a product and process orders. The company’s profitability directly depends on the productivity of salespeople — the number of orders they can pitch and place during the working day. Their productivity depends on the skills of the salespeople, their training, and the availability of the IT systems they use. Suppose they are on a call with a customer, and the system goes down or performs slowly. In that case, it may result in losing a customer or spending significantly more time with the customer, taking away the time from another customer. Therefore, an MSP can help with Uptime and Performance metrics that directly influence the business.

Imagine a salesperson being able to place 10% more orders by making the IT system work faster and with less downtime — that would lead to 10% more revenue for the business using the same resources. An MSP offering to increase sales productivity by 10% would be a much better suitor for a technology partner than an MSP offering to “keep things running.”

Therefore, it is crucial to define the types of customers, which metrics an MSP can influence, and what the sales pitch to the customers can be regarding business-specific metrics.

Economic buyer

The economic buyer is the person making the decision. For most SMB customers, it is the owner of the business. It is essential to understand which metrics and criteria the buyer uses to decide and appeal to that information, even if the conversation is with a person working for the buyer.

Understanding the buyers requires research, and the most valuable resource can be the existing customer base if an MSP already has it. Talking to existing customers allows us to understand the perspective of similar customers and improve the sales pitch.

For example, MSP serving dental practices can learn that one way to increase profits for their customers is to offer additional services like producing dental aligners, which may be a priority. From the IT perspective, they need a quick and easy way to place orders with labs making aligners. This requires IT infrastructure to be set up to allow data exchange while maintaining the healthcare industry’s necessary security and privacy standards. Conversing with the prospects while knowing their specific needs and offering them particular solutions goes a long way.

If an MSP is expanding to a new market segment or just starting the business, online research, a few visits to SMB meetups and asking prospects out for a coffee may be practical ways to collect the intelligence needed to better understand their needs.

Decision criteria

Knowing the metrics and the buyer is crucial to understand the decision criteria. Do they value lower cost, faster implementation speed or higher reliability? Understanding the factors implementing the decision-making process would help to build the most effective pitch.

For instance, a law firm partners when choosing an MSP looking for a quick onboarding with minimum downtime and a guarantee of protecting against a critical failure — like a ransomware attack or hackers accessing sensitive information. For that firm, specific details of the implementation and security measures in place are the best pitch from an MSP.

For most SMB customers, there are standard decision criteria:

  • Cost
  • Time for the implementation
  • Time for employee training
  • Risk mitigation
  • Return on investment

As cost is quite often the primary factor, MSPs frequently have to assume the existing infrastructure and licenses already purchased by the customer. That leads to the need to maintain a non-standard technology stack. Yet, pitching to other factors may shift customers’ decision-making to agree to higher costs for additional benefits. If adequately connected to the business metrics, it is possible to convince customers to change their technology stack while moving to a new MSP.

Decision process

A typical SMB owner makes decisions after consulting his trusted advisors (like a “classmate that became an IT guru”), looking at his peers in the local community, and relying on their gut feeling. It helps to understand who is impacting the decision and influence those actors as well.

A dental practice is considering a new MSP, looking for references from other dental practices, and asking about the metrics the MSP was able to improve for other dental procedures. A local retail chain considers how many engineers live in the vicinity and how long it takes them to get to the store locations. Some owners look for online reviews from businesses in the same industry or exact location, and some owners rely on the advice of their customers or suppliers.

Identify pain

MSPs offer a solution to a problem — running IT infrastructure with external IT staff, lowering the cost of managing IT infrastructure, improving reliability and performance, implementing innovation, and improving existing processes. This all sounds good, yet generic words rarely work well. Customers trust specific propositions more than promises of making things better. The successful MSPs can look at the current situation, identify the pain and offer a measurable improvement.

For instance, a small online store needs help with slow order processing and losing customers unwilling to wait for the order system to go online. The average order is $50, and the store sees ten customers not finishing daily purchases because of low system performance. Solving the issue will bring $500 a day in sales. A manufacturing company loses thousands each month in employee productivity because employees spend an enormous amount of time recovering accidentally deleted files that require creating tickets with a Helpdesk and offering self-service solutions to free up the time that can be used to produce more goods. A media production company loses hours daily on following up with their customers that have issues receiving large files because of an unreliable network and poor file sync and share solution — an MSP can solve the problem and calculate the improvements in actual costs of the hours saved.

A specific pitch increases a customer’s confidence in the partner. Knowing the language and the pains and providing clear guidance and recommendations is a strong competitive advantage for an MSP. Time spent researching the pain points pays over time, yet without it, winning deals from the competition becomes increasingly difficult.

Champion

The champion is the person inside the organization who will help the MSP land the customer by advocating for their services. It can be any employee whose voice will be heard by others and the company’s owners.

A salesperson struggling to hit their targets because of frequent network downtime can be an extremely active (and even aggressive) advocate of switching to an MSP offering a solution for that problem. An employee familiar with the quality of service the MSP delivers to another customer can be a strong reference for the MSP.

One of the best champions for MSPs is the former employees of their customers. When they change jobs and land in companies with less than efficient IT infrastructure, they are happy to advocate for the partner they used to be pleased with. Therefore, keeping a good CRM and tracking the contacts of people changing jobs is a strong sales channel for MSPs.

Now, how do I use it?

The MEDDIC framework forces an MSP to do two things — define segments of customers they want to go after and learn more about their customers and prospects.

Defining segments requires saying “no” to other types of customers, which may be hard to do. Yet it is a vast sales productivity booster. Going after “random” customers is expensive and rarely productive. The sooner an MSP defines a segment, the sooner they can work on sales productivity.

Collecting information about customers and prospects is time-consuming and an investment in itself, yet with defined segments and a good CRM to keep records, it becomes easier and faster over time. The more you sell to a particular feature, the more you learn about their customers—the more effective you become in their sales process.

A sales framework is an investment. You must practice, train our team, get your engineers to help you collect the information, and use every opportunity to learn more. However, if done well, it gives good ROI.