Regardless of the industry, great sales rainmakers are a rare, but valuable breed. These top producers, typically the founders, owners, or head executives at small to mid-sized business, are pros at pitching their company’s value, building rapport with prospects and cementing new relationships, and ultimately closing the sales deal to acquire new customers. For MSPs, the “Rainmaker Sales Model” involves some rewards — and some risks. Here’s an overview.
No doubt, the Rainmaker Sales Model is becoming more popular in the IT channel — particularly in the SMB managed services space. A number of leading coaches and consultants in the IT industry are promoting the advantages of the Rainmaker Model and are teaching MSPs how to employ this sales methodology within their company. A number of my buddies who have a managed services business are having great success adding a few new clients a month using the Rainmaker Model. They can’t stop talking to me about how well this simple, process-driven sales approach is working for them.
Getting Started
For those who are not familiar with the model, a brief overview may be helpful. A company typically employs some “junior” telesales reps at a very low base salary, plus commissions based on the number of appointments set. (This function can be outsourced to a third-party).
The reps are tasked with making a high volume of outbound dials, which produces a good number of conversations with prospects, which then leads to onsite appointments for the Rainmaker who is tasked with closing the sale (through one or a series of meetings) and ultimately securing new contracts. It’s purely a numbers game and is easy for a company to measure and continually improve its production.
Financial Drought?
However, there are both advantages and disadvantages to this model…
- Can a rainmaker be everywhere, all the time?
- Will this model prevent an organization from developing a much larger, more sophisticated sales organization?
- Does it stunt internal talent development and career path?
- Does the model have a positive or negative impact on the business valuation and the appeal to a potential buyer?
- Is there a limit to growth rates and company size when the Rainmaker Model is used exclusively?
I’d invite you to share your thoughts, experiences, and insights on the Rainmaker Sales Model. Where and when is this model best employed?Please share your war stories, your sales success stories, and your opinions and advice.
Jason Beal is Director, Services Sales, Ingram Micro North America. He plays a key role in Ingram Micro Seismic. Monthly guest blog entries such as this one are part of MSPmentor’s annual Platinum sponsorship. Read all of Jason’s guest blog entries here.
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Tags: Ingram Micro Seismic | Jason Beal | Managed services sales | Rainmaker Sales Model
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Great post, I believe the rainmaker model will continue to exist and also continue to evolve as the market changes. Today’s rainmaker must also understand how they can leverage online services with traditional salesmanship.
Keep up the good work
Stuart Crawford
MSP Marketing Consultant
403.775.2205
Stuart: I think Jason has a point. Initially the model works. But as an MSP grows the Rainmaker model has to evolve. With a single Rainmaker in place, MSPs also have a single point of failure in place. Somebody on the telemarketing sales team has to be nurtured for a mid-level sales post…
In my mind: Grow all your talent, or replace it…
Of course, I’m not an MSP. But MSPmentor’s parent (Nine Lives Media Inc.) essentially is an SMB facing those same growth-minded decisions. In our case, we blend seasoned talent with Gen Y youth and hopefully deliver the best of both worlds (or die trying…).
-jp
Jason,there’s no arguing the success of the Rainmaker model if you’re a small VAR or MSP. It only makes sense to have your best sales person parachute in when it really counts. My firm has used it and built our business with it. But it can’t be your long term strategy. As the old saying goes, you can’t keep feeding your team fish, you need to teach them how to fish so your firm can scale. But it’s a great way to lead by example.
Greg Onoprijenko
http://www.e-ternity.ca
Great blog article Jason! The following is some of my thoughts in response to the questions you asked.
The world would be a better place if a rainmaker could be everywhere, all the time, but until cloning becomes mainstream this won’t be possible….or could it in fact be possible…? Regardless, just as some of your rainmaker buddies who have a managed services business add a few new clients each month so long as this can continue their business will continue to grow – slow and steady wins the race…..although so does fast and furious!
The rainmaker model should not prevent an organization from developing a much larger, more sophisticated sales organization. Rather, if this is working and is generating sales then reinvest back into the business and higher talent that has a passion and can join the rainmaker on appointments. In hopes that one day the new hire can learn the way of the rainmaker and eventually go out on appointments themselves reaping more reward. One day a time should come when the rainmaker must….and Yoda says it best, “train yourself to let go of everything you fear to lose”…..but be sure to support, manage and don’t be afraid to fire and rehire should your passionate hire jeopardize your company’s reputation and or customer relationships in any way….scale baby scale!
The model should not stunt internal talent development. If the telesales reps are not outsourced the rainmaker will obviously have more control at which point the rainmaker should be wise enough to recognize good reps that have a passion for what they are doing. If this passion is coupled with a thirst for knowledge and smarts then it is up to the rainmaker to promote from within giving the telesales rep the opportunity to grow and advance their career path.
The bottom line is if the business is making money, has a contracted customer base, and is scaling appropriately then the business valuation and appeal to a potential buyer should be apparent.
I think there would have to be a limit to growth rates and company size when the Rainmaker Model is used exclusively by the simple fact that the rainmaker cannot be everywhere, all the time….or could the rainmaker be everywhere, all the time???….depending on the technology utilized by the rainmaker I think the rainmaker could in fact be everywhere, all the time whereby not limiting growth rates and company size whatsoever!
Enjoy the weekend everyone and thanks again Jason!
Cheers,
Zak
Great blog Jason.
In conversations with MSP’s we too are seeing investments into sales and marketing efforts as a growing trend. We are finding that those that implement a sales plan – like the “rainmaker” technique are having great success as the MSP market continues to grow and emerges from the recession. One key performance indicator (KPI) we are finding is that our best in class MSP partners have already made this investment. The “rainmaker” approach is quick, easy and relatively affordable to deploy. The scalability comes from another KPI we are also finding – investing in your people. Step 2 – Find the right people and invest in creating an army of “rainmakers”.
Rob T. Rae
Director of Partner Development
Level Platforms
rrae@levelplatforms.com
Thanks for the solid responses and input on this one so far. I agree with the threads from both Zak’s and Rob’s comments in that the Rainmaker model is a relatively simple way to implement a process-driven sales approach to organizations that otherwise lack rigor and mature sales processes. It brings a structure and a cadence to organizations that may not be so ‘mechanical’ and disciplined in their sales and marketing efforts. It can ignite sales, grow the business, and bring profits that can (and should!)then be reinvested into talent and broader sales organization within the company. Small business that do not grow beyond a single-person rainmaker model may be bound to say small businesses.
Are there any VARs and MSPs out there reading this who are willing to share their experiences with this model?
I am with Zak. Very important to keep it moving.
Whether you call it a Rainmaker model, or a smart and efficient way to start building your sales engine, starting with a jr. ISR (inside rep), joined at the hip with a more sr (not too sr) OSR (outside rep) is the aged old tried and true way to get going. The ISR dials for appts (is not comped on appts, is comped on sales) and the OSR follows a proven f2f sales process. The trick is making this a predictable revenue producing low COS (cost of sales) engine. You get there by measuring every single aspect of the process (# calls it takes to get an appt, % of appts that go to mthe pipe, types of clients that go to the pipe, pipe growth/week, pipe close rates etc etc etc)and refining as required. As soon as you feel comfortable (with data) that this team is efficent/producing/low COS you should consider another OSR (I believe 1 ISR for every 2 OSRs). But then you must have a great on-boarding process that ensures the OSR is successful.
best,
Hi all,
Joe brings up a great point – with the Rainmaker model you have a single point of failure. In our early days, Tigerpaw was certainly based on a Rainmaker model; (my father (our founder) was the Rainmaker. As you grow, you have to move away from this model to achieve any sort of scalability and security. Even if you hope to stay small, if you have dreams of leaving your business for weeks at a time or enjoying some sort of retirement or semi-retirement, you cannot be such a critical cog in your company’s mechanics.
If the Rainmaker isn’t the owner, you have a different set of issues. You can find yourself beholden to the Rainmaker, creating compensation packages and sales procedures around this one person (we’ve been here too). At Tigerpaw, we’ve identified the Four Pillars of Success that a business must focus on to grow and prosper. The fourth pillar is Creating Excellence. Creating excellence requires that you move away from managing personalities and instead manage processes. This can be difficult or impossible to do when you rely on a Rainmaker.
James
The rainmaker is great for SMB focused MSP’s because its highly relational. It makes all the “we partner with our customers” talk feel much more genuine because its owner-led sales. Without a doubt its a great way to build a business.
However, any entrepreneur building a business should also consider their exit though. If the desired exit is a sale of the business, the sales process has to moved away from rainmaker/owner-led sales into a team and process that has its own value separate from the people.
It is already hard enough to value a services business accurately, but without a solid sales methodology that becomes even more difficult.
Brendan Cosgrove
Kaseya
@cozthegrov
This is very interesting to me. As a small business owner, I must admit I wasn’t even aware that there where sales models like this. I mean I know there are different ways to approach these things, but I wasn’t aware that there where named models. I came to this site looking for service management software and learned something new. Thanks for that. Can anyone here recommend a service management software product? And by service management product I mean a software product that helps small service based companies like plumbers and pest control companies manage all aspects of there business from marketing to sales to finances. Sorry if this hijacked the thread.
James
No doubt, the Rainmaker Sales Model is becoming more popular in the IT channel