Your customer base is like a garden. It needs to be pruned, watered and cared for regularly, or it becomes overgrown and overwhelming.
I recently had a conversation with an MSP struggling with profitability. They were profitable, but they weren’t profitable enough to grow and secure new customers. So, we spent some time on Micro Picanomics. And what did we learn? They needed to charge more. (No surprise there!)
We then talked through their customer base. What became clear was that they only had “feelings” about who was a good customer and who wasn’t — and they were pretty confident in those feelings. Hoping to change their mind, I asked them to watch the video ‘Not All MRR is Good MRR’ in our FormulaWon portal and fill out the MRR Evaluator included as best as they could.
This led to questions around what customers should be included and what MRR is. So, we went back to Micro and Macro Picanomics, and I explained why we look at the business through this lens. Once they had the first pass at the evaluator, it became clear that their feelings around who was a good customer did not align with the facts.
Within five minutes, they had a better idea of why they were feeling pain and noise in the business. It was not an easy or quick issue to solve, but we agreed on a list of priorities to focus on over the next quarter. They also agreed to review the evaluator every quarter and set new quarterly objectives, including raising prices, digging into the source of tickets for noisy customers, resetting edges, making project recommendations, or even firing a customer.
Every MSP has customers that they may not have sold today based on new standards, customers with old programs or pricing, and relationships that have drifted over time.
If you don’t attend to your customer garden, new customers suffer, employees feel overwhelmed, and, eventually, you get stuck.