An Effective Approach to MSP Sales – What the Data Tells Us

This is blog 2 out of 3 with some practical conclusions derived from the 2025 Service Leadership annual compensation report. Thanks again to SLI for allowing me to review the report and comment on it!

The MSP channel has spawned a lot of ‘industries within an industry.’ One of them is a lot of coaches and programs telling MSP owners how to sell effectively. On the surface, those firms have identified a need (many MSPs are desperate to increase sales) and are selling programs to meet that need. Some of what they offer is sound advice and helpful tools, but some of it may be pie in the sky.

Here's what the data tells us about building a sales team, from someone who has nothing to sell you!

Outside salespeople are expensive, and they often don’t work out.

The average compensation for an MSP outside salesperson is $115k, and they have a higher turnover rate than any other common MSP position. That’s a wordy way of saying that it’s not unusual for outside salespeople to wind up being very expensive mistakes for MSPs. What contributes to the degree of difficulty for these folks? Often, they are “just expected to sell.” There is a lack of fruitful marketing and lead generation, and there is no one effectively managing their activity. They are given a quota and sometimes a list, and then it’s ‘Push ‘em out of the nest and hope for the best.’

Inside salespeople are significantly less expensive, and they have a lower turnover rate.

Let’s set aside the fact that “Inside Salesperson” doesn’t exist as a position in most MSPs. They’re usually called Client Account Managers (CAMs), or Client Success Managers (CSMs), or Business Development Reps (BDRs), and their job descriptions can vary widely. When done correctly, these folks serve as a client advocate, a friendly point of contact, and someone who seeks out and picks up “low hanging fruit” sales. They should drive increased MRR and standardization at existing accounts.

Notably, when MSPs are small, it is common for the owner to handle both inside and outside sales. They are usually more focused on outside sales than inside sales, and most are proficient at closing new opportunities. Inside sales are more likely to get neglected, and it is easier and cheaper to hire someone to do them effectively than it is to hire an effective outside salesperson. While the cost of an inside salesperson can vary widely, on average they make about $76k in the US.

Marketing resources are relatively inexpensive, and they enable outside sales success.

A marketing resource costs less than half of what an outside salesperson costs. It seems to me that MSP sales efforts are trending away from outbound sales (cold calling and door knocking) to inbound sales (making the phone ring, prompting warm prospects to come to you). Marketing is a huge part of effective inbound sales.

The average marketing person makes about $55k annually, and many fractional resources and third-party services (of admittedly varying effectiveness) exist if you are not ready to commit to a full-time resource. Prior to hiring an outside salesperson, marketing can help create warm leads the owner can close. And with effective marketing in place, when an outside salesperson is hired, they will have a significantly better chance of succeeding. In the words of Service Leadership’s Compensation Report: “Without allocating marketing resources, the ROI required for highly paid hunters will not be achieved.”

Hybrid (inside/outside) salespeople are generally a bad idea.

Worst-in-Class MSPs are far more likely to employ hybrid (Inside/Outside) salespeople than Best-in-Class MSPs. Typically, the Hunter/Farmer hybrid is paid even more than a pure hunter – roughly $123k in the US. The likely scenario with many of these "hybrid" hires is that they will meet quotas primarily via inside sales, most of which could probably be closed by a resource that costs significantly less.

As with technical positions, you will always pay an employee for their highest-level skill, even if a significant percentage of their job is spent doing lower-level work. If you have an L3 engineer installing desktops, you will still be paying them an L3 salary to do so (when you could be paying an L1 resource 50-60% less to do so). If you hire an outside salesperson in a hybrid role, you will still need to pay them like an outside salesperson, when you could be paying an inside salesperson about 40% less to do the Inside Sales portion of their job. 

If someone is hired for a hybrid role, the commission structure for inside sales should be completely different than the commission structure for outside sales. MSPs should not pay outside salesperson compensation to someone doing marketing and inside sales.

The Bottom Line

The data certainly seems to say that if an owner is effective at outside sales, smaller (sub-$5M) MSPs should not rush to remove that role from the owner. Instead, they should shed tasks related to lead generation, marketing, and inside sales first, because others can do those tasks cheaper and more effectively than they can do outside sales. The cost of a marketing resource AND an inside salesperson is close to the cost of a single outside salesperson or a hybrid. If MSPs put the rest of the sales team structure in place prior to bringing on outside salespeople, the chances of them getting the ROI they desire every step of the way increase significantly.

And SLI didn’t say it, but I will: you must have someone managing the activities of outside salespeople. That can be the owner (if they know what to measure and truly commit the time), a sales manager, or an outsourced option. Don’t hire an outside salesperson without a plan to make them successful and hold them accountable on daily activities. Plan to win.

Our company (PeopleSharp) does outsourced recruiting for MSPs. We have a standard answer when asked about recruiting salespeople: "Show us your plan to make this your salesperson successful, and then we'll find you the right person. If you don't have a plan / structure in place, the person we find you will likely fail, and you'll blame us." We talk ourselves out of more salesperson recruiting opportunities than we talk ourselves into.

Hmmm... maybe we need a salesperson.