Generating Leads for IT Consulting. Outsource or no?

[Calebx]

Greetings, everyone,

I'm currently employed full-time in IT and run a side business specializing in IT consulting. My services encompass cloud development and management, both physical and cloud-based network management, and IT auditing. So far, my clientele has been limited, primarily acquired through word-of-mouth and personal connections. My most significant client contributes between $1,000 to $3,000 a month, but I've noticed a slowdown in their demand.

Recently, a sales agency approached me, offering to generate 1,000 leads per month based on my criteria. They also propose to engage these leads through cold calling and emailing, filtering them through a sales funnel until they're deemed ready for direct meetings with me. The promise is 5 to 10 high-quality meetings per month with potential clients. This service is priced at $750 monthly, locked in a 12-month contract, totaling $9,000. While I can afford this personally, I anticipate covering the cost through my business income. The prospect of elevating my business to the next level is exciting, and the agency's offer sounds promising.

However, some fellow business owners from various industries have suggested that investing in digital marketing, SEO, and Google Ads might yield better-quality clients. I'm not seeking an absolute answer but rather insights, opinions, and alternative perspectives on this matter.

What do you think? Would the sales agency's approach be a wise investment for scaling my business, or should I consider redirecting funds towards digital marketing strategies?

Looking forward to your thoughts and suggestions.

 

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[Andy Black]

Greetings, everyone,

I'm currently employed full-time in IT and run a side business specializing in IT consulting. My services encompass cloud development and management, both physical and cloud-based network management, and IT auditing. So far, my clientele has been limited, primarily acquired through word-of-mouth and personal connections. My most significant client contributes between $1,000 to $3,000 a month, but I've noticed a slowdown in their demand.

Recently, a sales agency approached me, offering to generate 1,000 leads per month based on my criteria. They also propose to engage these leads through cold calling and emailing, filtering them through a sales funnel until they're deemed ready for direct meetings with me. The promise is 5 to 10 high-quality meetings per month with potential clients. This service is priced at $750 monthly, locked in a 12-month contract, totaling $9,000. While I can afford this personally, I anticipate covering the cost through my business income. The prospect of elevating my business to the next level is exciting, and the agency's offer sounds promising.

However, some fellow business owners from various industries have suggested that investing in digital marketing, SEO, and Google Ads might yield better-quality clients. I'm not seeking an absolute answer but rather insights, opinions, and alternative perspectives on this matter.

What do you think? Would the sales agency's approach be a wise investment for scaling my business, or should I consider redirecting funds towards digital marketing strategies?

Looking forward to your thoughts and suggestions.

How do businesses find someone with your skills? Do they go through recruitment agencies?

What other businesses would benefit from introducing you to their clients? I was a contract Oracle DBA and a few UNIX consultancies would sub-contract me in or refer business to me.

What's your LinkedIn profile like? Are any of your ideal market on LinkedIn? How would you start building relationships with people who could bring your more business?

 

[Bounce Back]

The lock-in tells you everything you need to know in my opinion. Tell them get you just one meeting that ends up being a qualified/quality lead for $750 first then go from there. Shouldn't be a problem for them based off their claims.

 

[Andy Black]

The lock-in tells you everything you need to know in my opinion. Tell them get you just one meeting that ends up being a qualified/quality lead for $750 first then go from there. Shouldn't be a problem for them based off their claims.

My gut says the same.

Personally, I think it's well worth getting out there, building relationships, figuring out how to get more business, and even adapting your offer to match what businesses need help with. Maybe you get help figuring that out, but I don't think it's something you outsource completely.

One of your biggest advantages as a consultant is your personal brand. Some agency scraping 1,000 leads a month, cold emailing/calling them and arranging meetings for you doesn't seem the best way to build your personal brand.

I'm biased though as I don't do or like cold emailing/calling, so take what I say with a pinch of salt.

Here's a couple of threads that might help you:

GOLD! - HOT! - MARKETING - Andy's Inbound/Sales Braindump

I was asked this a while ago: If you were to start your business from scratch, how would you approach prospecting? Given that you don't cold call. And you don't know many people in the business world to "spend your money on diesel and coffee" with. And you've already reached out to your friends...

www.thefastlaneforum.com

HOT! - 10+ Years IT Contracting at €300-900/day (Learnings)

I was an IT contractor for over 10 years, earning €300-600/day (with the occasional €900/day short-term gigs). I've had a few AdWords jobs and contracts since 2009 (and am currently still in one long running one). In that time, I've learnt how to: Build relationships with recruitment agents...

www.thefastlaneforum.com

 

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[Calebx]

My gut says the same.

Personally, I think it's well worth getting out there, building relationships, figuring out how to get more business, and even adapting your offer to match what businesses need help with. Maybe you get help figuring that out, but I don't think it's something you outsource completely.

One of your biggest advantages as a consultant is your personal brand. Some agency scraping 1,000 leads a month, cold emailing/calling them and arranging meetings for you doesn't seem the best way to build your personal brand.

I'm biased though as I don't do or like cold emailing/calling, so take what I say with a pinch of salt.

Here's a couple of threads that might help you:

GOLD! - HOT! - MARKETING - Andy's Inbound/Sales Braindump

I was asked this a while ago: If you were to start your business from scratch, how would you approach prospecting? Given that you don't cold call. And you don't know many people in the business world to "spend your money on diesel and coffee" with. And you've already reached out to your friends...

www.thefastlaneforum.com

HOT! - 10+ Years IT Contracting at €300-900/day (Learnings)

I was an IT contractor for over 10 years, earning €300-600/day (with the occasional €900/day short-term gigs). I've had a few AdWords jobs and contracts since 2009 (and am currently still in one long running one). In that time, I've learnt how to: Build relationships with recruitment agents...

www.thefastlaneforum.com

Andy,

Thanks for the feedback. My biggest issue right now is my LinkedIn is awesome and I have so many good contacts on there. However if my employer saw my promoting my own business even though it is unrelated to what we currently do I know it would cause issues. I've seen it happen to others in the pass.

 

[Andy Black]

Andy,

Thanks for the feedback. My biggest issue right now is my LinkedIn is awesome and I have so many good contacts on there. However if my employer saw my promoting my own business even though it is unrelated to what we currently do I know it would cause issues. I've seen it happen to others in the pass.

What if you post helpful tips and advice in such a way it *helps* your employer get more business, while positioning you as an expert in your field?

Can you talk up the company you work for? Can you explain how they help their clients? Be so good it brings clients to your employer, and your employer shares your posts?

What can you post that has your employer calling you into their office to commend you on the work you're doing to help their business?

 

[Tiago]

Man, most lead agencies are a complete bust. They might provide you with leads, but they can be extremely cold and if you don't convert them it's because "you're bad at sales".

 

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[Calebx]

What if you post helpful tips and advice in such a way it *helps* your employer get more business, while positioning you as an expert in your field?

Can you talk up the company you work for? Can you explain how they help their clients? Be so good it brings clients to your employer, and your employer shares your posts?

What can you post that has your employer calling you into their office to commend you on the work you're doing to help their business?

I like this thought process. It legitimizes my LinkedIn so when I am searched up personally I look credible without directly advertising for my website. Is that what you are getting at?

 

[BigRomeDawg]

So many agencies like that are all smoke and mirrors. I owned an MSP so I've worked with a lot of them. They do 12 month contracts because they know it's low quality. Or else they'd do month-to-month with a money back guarantee.

You're way better off cold calling for referral partners. Think of high-trust businesses (lawyers, accountants, etc.) who work with your ideal clients. Tell them you have a similar clientelle, and ask what their criteria is, so you can send refer business to them.

9 times out of 10 they'll reciprocate the question. Nurture these connections just like you would a sales prospect. Keep up with them every month and find ways to help them. Because each referral partner is worth 100x what a bare sales prospect would be.

This is best ROI you can get on cold-calling as a founder with limited time. Instead of making 100 cold calls to get 1 customer, you can make 100 cold calls to get 5 referral partners (because it's an easier pitch) and each referral partner might send you 5 clients over the next 12 months.

 

[Andy Black]

I like this thought process. It legitimizes my LinkedIn so when I am searched up personally I look credible without directly advertising for my website. Is that what you are getting at?

Exactly.

 

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[Andy Black]

So many agencies like that are all smoke and mirrors. I owned an MSP so I've worked with a lot of them. They do 12 month contracts because they know it's low quality. Or else they'd do month-to-month with a money back guarantee.

You're way better off cold calling for referral partners. Think of high-trust businesses (lawyers, accountants, etc.) who work with your ideal clients. Tell them you have a similar clientelle, and ask what their criteria is, so you can send refer business to them.

9 times out of 10 they'll reciprocate the question. Nurture these connections just like you would a sales prospect. Keep up with them every month and find ways to help them. Because each referral partner is worth 100x what a bare sales prospect would be.

This is best ROI you can get on cold-calling as a founder with limited time. Instead of making 100 cold calls to get 1 customer, you can make 100 cold calls to get 5 referral partners (because it's an easier pitch) and each referral partner might send you 5 clients over the next 12 months.

"Who already has your clients?" (Jay Abraham)

This works really well. I didn't cold call but posted in forums, Facebook groups, LinkedIn, etc and agency owners would reach out o either subcontract to me or refer their clients to me.

Reaching out saying you've similar clients and asking what their ideal client is is really smart. I'll mull this over. Thanks.

 

[Black_Dragon43]

I owned an MSP so I've worked with a lot of them. They do 12 month contracts because they know it's low quality. Or else they'd do month-to-month with a money back guarantee.

I also worked with one of the largest agencies specializing in lead gen for MSPs (they hired us to get them more clients). One of the things I’ve learned is that most MSP leads esp the most profitable in the long run come from solid SEO.

SEO takes time — so why would you accept someone to sign up to your services with a month-by-month contract with a money back guarantee? Clueless businesspeople would waste your time and get their money back, not understanding that it’s not possible to get results that fast, and feeling like your service is a bad fit.

And maybe this is a philosophical difference between us — I’m not personally a big fan of the Hormozi style, “grand slam” offer. Because quite often those offers lead to acquiring a ton of clients quickly and then seeing them all churn as it becomes either (1) uneconomical to continue down that path or (2) too expensive to keep up with soaring expectations.

I could give a 2-week free trial on my offer. It would get me 10x more clients. But do I want 10x more clients if I’ll be left with just 2 at the end of the day? Am I not better NOT doing that and just getting the 2 directly lol?

I mean there is a reason why they have 12-month contracts. Sure, service sucks is a possible reason. But it being uneconomical to hold a client for one or two months so they “try it” or results simply taking longer is another one.

I remember with your MSP you did have a grand slam offer — you even gave them 5 computers they could keep if I remember correctly from one of your shorts. Just out of curiosity, how did that work out? What was the time to profitability from acquisition? Even if you have a high lifetime value if you keep the client, if that lifetime value takes 4 years to actualize, there is a very high risk of being cash flow negative for quite a long time and depending on a very fast client acquisition rate to be able to fulfil and keep the operation going. The grow or die phenomenon.

 

[BigRomeDawg]

I also worked with one of the largest agencies specializing in lead gen for MSPs (they hired us to get them more clients). One of the things I’ve learned is that most MSP leads esp the most profitable in the long run come from solid SEO.

SEO takes time — so why would you accept someone to sign up to your services with a month-by-month contract with a money back guarantee? Clueless businesspeople would waste your time and get their money back, not understanding that it’s not possible to get results that fast, and feeling like your service is a bad fit.

And maybe this is a philosophical difference between us — I’m not personally a big fan of the Hormozi style, “grand slam” offer. Because quite often those offers lead to acquiring a ton of clients quickly and then seeing them all churn as it becomes either (1) uneconomical to continue down that path or (2) too expensive to keep up with soaring expectations.

I could give a 2-week free trial on my offer. It would get me 10x more clients. But do I want 10x more clients if I’ll be left with just 2 at the end of the day? Am I not better NOT doing that and just getting the 2 directly lol?

I mean there is a reason why they have 12-month contracts. Sure, service sucks is a possible reason. But it being uneconomical to hold a client for one or two months so they “try it” or results simply taking longer is another one.

I remember with your MSP you did have a grand slam offer — you even gave them 5 computers they could keep if I remember correctly from one of your shorts. Just out of curiosity, how did that work out? What was the time to profitability from acquisition? Even if you have a high lifetime value if you keep the client, if that lifetime value takes 4 years to actualize, there is a very high risk of being cash flow negative for quite a long time and depending on a very fast client acquisition rate to be able to fulfil and keep the operation going. The grow or die phenomenon.

I agree with SEO, once we hit top of Google we started getting a good amount of calls. And it didn't even take much, maybe 20 or 30 Google Reviews and we were in the map box.

I bit the bullet with a couple of those agencies, just my personal experience, it was a lot of money on ad spend with no return. "It just takes time!". So I shouldn't say they all don't know what they're doing. And they don't necessarily need a "grand slam offer". But I think every contract should at least have some type of performance tied to it. Every contract I sold was 1-3 years but with a satisfaction clause so if we totally drop the ball they have a way out, or vice versa. So it was really a month-to-month contract, while setting the expectation that we are aiming for a long-term relationship.

I won't name names but there was one well known marketing agency who told me its a 12 month contract with no way to get out no matter what happens, even if they don't set a single appointment. I understand they need to mitigate their risk but so do I, and that's just unreasonable.

Regarding our offer. I had to have a clever offer because we had lots of competition. And everyone's service was basically the same on paper. Ours wasn't necessarily performance based, I knew from experience that my team can win over a company in just a few weeks of working together. I hired the friendliest most outgoing people. We had customer service on lock. So I knew if they got a taste they would stay. Its a sticky service regardless because there's huge pain and cost to switching IT companies. 1 month of free service plus 5 free computers cost us ~$5,000 so we would be profitable month 2. That offer instantly shuts down the objection "I'm looking at a couple other companies, let me get back to you".

I was also picky who I offered it to. Cause yeah it could quickly backfire with too much churn.

 

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[Black_Dragon43]

Every contract I sold was 1-3 years but with a satisfaction clause so if we totally drop the ball they have a way out, or vice versa. So it was really a month-to-month contract, while setting the expectation that we are aiming for a long-term relationship.

Hey thanks for your answer. That’s super interesting, can you walk me through the idea of the satisfaction clause? What does “totally drop the ball” mean and how did you make that clause transparent so it would be easy to determine if you really dropped the ball objectively vs them simply claiming you did so on a whim?

I was also picky who I offered it to. Cause yeah it could quickly backfire with too much churn

That’s also very interesting, I’m curious to dig deeper into this. What criteria would you use to basically “determine” if they qualified for it? I’m interested in this because I think this same sort of logic can apply cross-domain and it would certainly be valuable to a lot of people. One of the biggest problems with offering things freely is attracting the wrong crowd, that’s why I’ve always held back on it. I’m thinking to even make our main lead magnet paid — small price, say $9, but enough of a barrier to eliminate time wasters and brokies

 

[BigRomeDawg]

Hey thanks for your answer. That’s super interesting, can you walk me through the idea of the satisfaction clause? What does “totally drop the ball” mean and how did you make that clause transparent so it would be easy to determine if you really dropped the ball objectively vs them simply claiming you did so on a whim?


That’s also very interesting, I’m curious to dig deeper into this. What criteria would you use to basically “determine” if they qualified for it? I’m interested in this because I think this same sort of logic can apply cross-domain and it would certainly be valuable to a lot of people. One of the biggest problems with offering things freely is attracting the wrong crowd, that’s why I’ve always held back on it. I’m thinking to even make our main lead magnet paid — small price, say $9, but enough of a barrier to eliminate time wasters and brokies

I can't remember exactly. The thing about contracts is they're only as good as your willingness to uphold them in court. I never had any issues. If a client really wants to leave, I don't have any interest in using legalese to try and keep them, anyway. Bad karma. Sometimes we were reselling annual software subscriptions so we always made sure the contract said they were on the hook for those if they cancelled. But besides that we were pretty flexible.

The criteria was my spidey senses. Lol. The offer wasn't available to every person who wanted to claim it. We weren't doing high volume sales by any means. If I had to logically break it down, it's just accurately judging their needs and how important it was to solve these problems. It fits with the way I sell, which is, I don't really sell at all. I diagnose and prescribe. If I used high pressure sales tactics we probably would've had more buyer's remorse, higher churn, and the offer wouldn't have been profitable.

I like that idea of charging a small price for a lead magnet. I've never sold one but I sure buy a lot of them.