What Does Your Customer Base Say About Your MSP?

When assessing managed service providers (MSPs), you frequently hear the term “operational maturity” in our industry. In other words, how mature an MSP’s operations are. However, when I evaluate an MSP, I first look at its “customer base maturity.”

Here’s what you have to remember: All revenue dollars are not created equally.

Each quarter, you should be reviewing your customer base. Drawing near-fit customers behind you as you grow is why you’re not growing as quickly as you’d like. I’ve always looked closely at this, but I have a different view today than a few years ago because, in the past, the only tool we had in our holster to fix it was to sell to new customers at the right price and then replace them at the bottom. Today, we have a lot of tools that can impact the quality of our customer base.

So, what does quality mean? It means the average MRR and the percentage of customers above your minimum target, your all-in seat price, customer concentration, reactive tickets per seat, how much they utilize your stack and more.

You can categorize your customers and, each quarter, try to make some progress. This means getting all your customers on your latest offering price, adding new services and proposing projects that help with alignment.

The truth is this: Your customer base says more about your MSP than any other indicator.

So, what does your customer base say about your business?

TOPICS: MSP adviceMSP profitability
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