Getting your Trinity Audio player ready...

Account Manager vs. Salesperson

I was recently talking to an MSP Owner who was re-evaluating a hiring decision they had made just a few months prior. The hire was their first full-time Salesperson. While the original plan was to have this individual hunt down net-new contracts in exchange for a performance-based compensation, the length and the difficulty of the MSP sales-cycle started to take its toll. The individual was frustrated, starting to lose hope and considering quitting. Thankfully, given some personal history, they were open about this and thus the MSP Owner was able to work with them on a solution. 

While this may not be the case in every one of these situations, the goal in this situation was to retain the employee. They had proven to be a great cultural fit and were very personable with prospects. The compromise that the MSP made was to re-position this individual as an ‘Account Manager’ with a higher base pay and performance bonus on retention, upsells, and the occasional net-new deal. While the employee was happy with this transition, it left the MSP wondering if they had made the right decision. Their ultimate goal was to get more net-new contracts, and while this individual will likely be able to cover their compensation (and take work off the Owner’s plate) as an Account Manager, it’s not what they signed up for. Despite the net-new compensation still in place, the employee has essentially given up on this effort entirely. 

Hybrid Challenges

This behavior often contributes to MSPs struggling with implementing hybrid sales roles in their organization. People will naturally focus their time and energy on whatever produces the most instantaneous results. This is an instinct that humans have that is incredibly difficult to tether. Net-new sales presents a much longer feedback loop than account management, and thus trying to accomplish both simultaneously in a balanced way is an incredibly difficult feat. Are there people that are disciplined enough to execute this? For sure. However, these people are not that easy to come by and to be honest, there are often far more lucrative opportunities available to them in other industries (primarily SaaS). 

Many of these MSPs come to the conclusion that Sales and Account Management should be separate roles, even at the early stage of the business. Pulling an Account Manager into net-new deals as a way to cross-train them, or smooth out the onboarding process, makes sense but otherwise they prefer clear lines of accountability and compensation models to suit. When a Salesperson is forced to own both, expectations get skewed and the tug-of-war that I described above starts to occur. There are ways to implement guardrails via a more sophisticated compensation structure to force the behavior that you want, but this can become difficult to manage and produce higher employee turnover. 

The First Hire

Assuming that the hybrid option is off the table, I wanted to get an understanding of which role MSPs would prefer to hire first. This would help me better understand their mindset and overall growth trajectory. While the evidence up until this point has been largely anecdotal, I thought it would be interesting to put up a poll and see what type of data I could collect. While the results were not necessarily surprising, they did confirm my suspicions. 

Of the 81 MSPs that participated, 64% say they would hire an Account Manager before a Salesperson (if they only had the option to hire one at a time, which is commonly the case). This reinforces the learnings from our conversations which indicate that MSPs largely struggle with hiring Salespeople early on in their journey. This sentiment was also reflected by a few Sales & Marketing experts in the IT Channel. For example, Derek Marin, of Simple Selling chose Account Manager, indicating that it is “lower hanging fruit for upselling and improves retention.” Taher Hamid,  of MSP Camp also agreed, as he recognizes that it “frees up the Owners time to actually sell.” 

CEO Capacity

This leads me to my next observation, which was that many of the MSPs and Consultants that I talked to mentioned that the capacity of the CEO should be the primary catalyst for this hire. For example, Rhondre Giscombe of MSP Revenue Secrets commented,“[You should hire an] Account Manager if you have over 50+ Managed Services clients and see the opportunity for MRR increase by another $5-15K over the next 12 months. Hire for this especially if the CEO/President is at 80-100% capacity. Then, you can hire a Salesperson in the future with the revenue that covers their compensation.”

While Giscombe was precise when describing the size at which this hiring was necessary, others described a certain phase of the business’ maturation process. Ian Groves, Managing Director of Start Tech says “I wouldn’t say it happens on a set number of clients or endpoints. It is more to do with the growing maturity of the MSP. Typically, the Owner will reach a point where they need to stop being the Account Manager (at least for new clients). At this point you need to bring someone [on.]” No matter how you put it, it seems as though it’s on the Owner/CEO to determine at what point they are becoming overwhelmed by the attention demands of new and existing clients and leverage this hire to solve that problem. 

Owner-Led Sales 

After having these conversations, the logic behind hiring an Account Manager first started to really come into focus. It’s not necessarily because “Account Management” in itself is a more important role. If anything, it’s the opposite. Hiring an Account Manager is a lower-friction  way to establish a buffer between the existing client-base and the Owner / CEO so that they can spend more time fulfilling the primary Sales role (to generate net-new business). 

I asked Robert Gillette, Owner of MSP Dojo, what he thought of this strategy. As he put it, “It usually makes sense for the MSP owner to stay in New Client sales. A hired hand is unlikely to care more, or try harder, or be as effective in the role. An Account Executive (New Client sales) will [also] be much more expensive than an Account Manager. Getting it wrong is more embarrassing and takes longer to correct.” Given that first impressions mean a lot, keeping the Owner / CEO as the face of the business during the sales process is no doubt a more foolproof solution. 

Promoting Within

The good news is that most MSPs may not need to look very far to fulfill an Account Manager role. As Brian Gillette, Founder of Feel-Good MSP explains, “MSPs looking to increase revenue should build their strategy around their people, rather than around a hypothetical. If there are Techs who are looking to make more money and don’t mind interacting with clients, consider converting them to an Account Manager. This role can be a natural transition for a Tech, who can start viewing any impending necessities in a client’s network as projects, upsells, and reasons for contract renewal.”

To recap the shuffling of resources that we’ve described thus far; the CEO/Owner transitions fully to Salesperson (Account Executive), the Technician transitions to Account Manager, and therefore the only external hire required is to fill the Technician role (which shouldn’t be difficult for an MSP). In this scenario, I wouldn’t choose to promote your most knowledgeable or specialized technical resource to Account Management. That will likely just create another bottleneck somewhere else in the organization and complicate the hiring process even more. Instead, look to promote someone that has great customer service skills, is well-liked by the customers, but maybe doesn’t have the technical drive required to climb the ladder within your service org (level 1, 2, 3, etc.). Most MSPs of the appropriate size have at least one person who may fall into this category. 

Counter Arguments

It’s important to note that not everyone agreed with the idea of spending money on an Account Manager so early on, or the fact that hybrid roles were not a viable solution. For example, Craig Pearson of Your IT Department stated, “As with anything like this it’s a ‘it depends’ but I went Salesperson as you’re talking first hire, and on the basis that (in old school terms) a hunter will generally be able to farm, so can become a hybrid until you’re big enough to split the roles again, but a farmer can rarely hunt.” This is a valid point in that someone well suited for the Salesperson role is capable of fulfilling Account Management duties, but the same cannot be said for the other way around. For that reason, a Salesperson would be a more versatile hire, as long as they don’t fall into the trap we described early on. 

Another great counterpoint was made by Mike Herrington, VP of Sales & Marketing at i.t.NOW. He said, “Salesperson is the only correct answer to this question. Having somebody in your organization focused on growth will make a lasting impact and give you the resources you need to make additional hires faster.” He is right, as someone has to be focused on driving net-new sales at all times in order to drive momentum and a steady pipeline. In situations where the Owner/CEO would prefer to focus more on the Technical aspects of the business and remove themselves from the sale process, then hiring a Salesperson is probably a more urgent requirement. 

Conclusion 

While every MSP has their own unique path that contributes to their decision-making, I found it very interesting to learn how many of these paths converged on this one point. While many MSPs that contributed have already made their first Sales or Account Management hire, it is interesting to learn how they would handle it, given the chance to do it over again. This also makes me think about my time as an MSP and whether or not we played it the right way. As many have pointed out, it’s not easy to get these hires right the first time around, however, I am hopeful that the learnings from this article can help tilt the odds in your favor.