James Bergl wants MSPs to build compelling value propositions

IT channel stalwart James Bergl has returned to help the channel partner ecosystem – both MSPs and IT vendors – build proper sales teams that can grow the company.

After more than a decade in senior leadership roles at Datto, N-able and Pax8, Bergl is the managing director of Bluebird Talent, a recruitment agency specialising in the software-as-a-service (SaaS) sector.

The agency, founded by former SolarWinds Netherlands director Machiel Kunst, focuses on connecting top-tier talent with roles in sales, marketing, customer success, IT and development.

Recently, Bluebird’s service has officially expanded to cover the US, which Bergl said was a “major milestone” for the business as it continues to support high-growth SaaS vendors and IT channel partners around the world.

“The A/NZ [Australia and New Zealand] team, together with our colleagues over in Europe, have built a strong reputation by helping the tech ecosystem find and grow top talent and now we’re bringing that same energy, expertise and network stateside,” he said.

Bergl told ARN he worked with managed service providers (MSP), technology service providers (TSP) and SaaS businesses to build repeatable sales systems and enable the recruitment, onboarding and coaching of high-performance go-to-market teams.

“As I stepped away and started working with other businesses – MSPs/TSPs, resellers and cyber security SaaS vendors – and helping owners hire their first sales teams, I noticed some patterns,” he said.

He believed the Australian market dynamics in the channel had a “push and pull effect”; what is done on one side impacts the other.

“On one hand, you have the big players acquiring everyone to achieve economies of scale,” Bergl observed. “This makes them more competitive and puts pricing pressure on others.

“As these companies grow bigger, their brands and marketing engines get stronger. They must face bigger competition and more salespeople competing for customers.

“If they’re not actively playing in the sales game, they’ll probably get beaten.”

On the other hand, if they’re a small business and don’t innovate or build a more compelling value proposition, they’re likely to get pushed out.

“When I spoke to these companies about what their sales function should look like, how commission plans should be structured,” said Bergl. “I often find that when a salesperson isn’t successful, it’s about a 50/50 [split].

“Half the responsibility lies with the salesperson and half lies with the business.”

Before you hire

He believed there were times channel partners blamed poor sales performance solely on the person in the role.

“Sometimes MSPs say their salespeople aren’t performing,” he said. “While there are definitely ‘cowboy’ sales reps who take advantage, I believe that if the business had proper systems and mechanisms in place, they’d recognise it much sooner.”

That recognition could’ve been made within two months of the hire, as opposed to 12 months. Bergl said that was the importance of the business being responsible and laying the right foundation from the outset.

“I’ve started to break down the go-to-market function into different parts and I see MSPs struggling with those foundational pieces,” said Bergl.

For example, an MSP might hire a business development manager (BDM) to drive sales, even though the business isn’t yet prepared to support that hire properly.

“In the past I would’ve helped them spot a fraudster during interview and that skill is useful,” he said. “But now I ask deeper questions [about] leads coming into the business.”

If the IT service provider doesn’t have their own leads to begin with that’s a “clear sign the business isn’t ready for a salesperson”, explained Bergl.

“It might sound simple, but it’s true,” he said. “Sometimes people say [the] person is a 360-degree salesperson … they’ll generate their own leads.

“That’s great, but if your business isn’t generating any leads at all, you either have no marketing, no market awareness or no market validation.”

According to Bergl, if there’s no market validation and fit, there are opportunities to get business through referrals, website inquiries, or meeting prospects at sponsored events.

Go-to-market strategy

“Hiring a salesperson with no lead flow is basically hiring an expensive lead generator,” he said. “My recommendation is to first assess your lead flow and lead generation engine.

“I’m not saying you have to give all leads to the salesperson, but you need leads to validate your market fit.”

“I’d say if you don’t have leads coming in, you’re probably better off going to an SDR [sales development representative] agency, a marketing or lead generation agency, sponsoring events, or simply talking to your customers,” he said. “Ask them if they like your service and if they’d be willing to refer you to others.

“If they’re happy, they’ll refer you. If they’re not, they won’t. So, if you’re not getting referrals, that might be a sign your product or service needs improvement.”

As MSPs and TSPs bring on a new hire, the next stage is to create a 30- to 60-day plan with clear outcomes, key performance indicators (KPIs) and expectations.

“Often MSPs think the [hired] salesperson knows what they’re doing; … go out and sell,” observed Bergl. “It’s a 50/50 situation … yes, they should have the skills, but every business is different.

“You need an onboarding and enablement program. You should provide training materials or certifications they need to complete and have them do joint sales calls and meet the technical team.”

He advised service providers to have a detailed checklist of what they need to do to get properly set up with the right technical knowledge.

“This might seem obvious now, but many MSPs don’t get this granular,” Bergl explained. “Without it, you haven’t set your salesperson up for success.

“You have a valuable asset, but you haven’t given them the right fuel … [that’s] a grounding error.”

Building an enablement program costs relatively little compared to the cost of the salesperson. Even hiring someone for a month to build that program is a small investment with big potential returns.

“I always encourage tech businesses to prioritise this,” said Bergl. “Next is the commission plan [and] it should be simple to understand and achievable.

“I’ve seen comp plans so complicated you need a science degree to figure them out … that’s a problem.”

Bergl explained if the plan isn’t clear, the business won’t get the result it wants because it won’t drive the right behaviour.

“Also, I see plans that are completely unrealistic,” he said. “If the plan is unachievable, sales reps won’t make money and will feel like failures.

“Sales is a performance-based role and if reps feel they can’t succeed, they’ll either quit or cheat the system just to appear successful so they don’t lose their job.

“That’s the opposite of what you want, so getting the right commission plan is critical.”

Then there’s management who need to be able to lead the salesperson, Bergl said.

“I hear from many MSPs that they hire someone but don’t do one-on-ones, don’t ask for feedback, don’t review work or pipeline,” he said. “They just expect the salesperson to figure it out on their own.

Managing is a two-way street which requires weekly catchups create a feedback loop where you can check if they’re doing the job well and also invest in helping them succeed – something new hires appreciate.

“It also lets you spot problems early,” Bergl pointed out. “If you have proper management and track the right metrics, you’ll know within two or three months if someone is misleading you.

“If you don’t have the capacity to manage a BDM, consider hiring a fractional manager who can meet with them weekly.

“It’s an extra cost, but it’s a risk mitigation strategy that often increases revenue.”

Bergl often asks candidates and ask why they left a role, and they explain it’s because they weren’t set up for success. They had no clear plan, no training, or management.

Innovate and build value

Having these foundations for smaller MSPs and TSPs is fundamental at a time when they need to find new companies to expand the business, but also to look good to a potential buyer.

“If you’re owner-led and your sales depend solely on you, that’s a risk for buyers,” said Bergl. “When you leave after acquisition, customers may leave too because there’s no sales engine in place.

“Many companies are now focused on building a sales engine so the business can run independently of the owner.”

Bergl added if they achieve this, the business is worth more and becomes more attractive to buyers.

“You have two choices: fight against the big players or position yourself to sell to them for an exit,” he said. “It’s a race. If you don’t move quickly, your competitors will and you’ll get left behind.

“Over time, supply and demand will reduce valuations … multipliers start to drop.”

Bergl said that’s why there’s real urgency to build an owner-independent sales engine sooner rather than later.

“If your business is struggling, and you’ve always relied on referrals, now you need to do the hard work,” he said. “You need to find new customers, create a unique and compelling value proposition, and get out there and sell.

“That’s why it’s more important than ever for companies to build or hire a sales engine because many are going backwards right now.”