Article | August 21, 2019

The #1 Thing You Can Do Right Now To Increase Profits

Source: IT Glue

By Joshua Oakes, IT Glue

Ingredient Optimization Unlocks Profitability & Savings

IT Glue’s 2019 Global MSP Benchmark Report is jam packed with insights, but as with any research, there are always points where you want to dig a little bit deeper. The purpose of the Report is to determine what the key success factors genuinely are in the MSP space—what matters and what doesn’t—according to hard data. Based on this, it’s pretty clear what one of the fastest ways to move the needle on your revenue and profit growth is: eliminate churn.

Churn is Evil

Churn is simply the percentage of your revenue that you lose each year—customers who for whatever reason leave. Obviously, you can’t control if a customer goes out of business, so eliminating all churn entirely isn’t realistic, but MSPs who hold churn under 5% of annual revenue are far more likely to see revenue growth than MSPs who have a churn rate over 10%. So as far as our data shows, the single most important thing you can do for the health of your business is to reduce churn.

The math on this is remarkably simple. For every dollar you churn, you need to replace that much with revenue growth, just to break even. In a world where most MSPs struggle with lead generation and sales, anything you can do to reduce the need for sales & marketing expertise matters.