ScalePad Survey Shows How Top MSPs Set Themselves Apart

‘A strong client service strategy and highly productive staff can secure long-term contracts. Those with low customer churn also tend to track more service-focused metrics compared to the average of their peer group. So more metrics is typically indicative, in this case, of maybe having a holistic view into your client experience, allowing you to build customer relationships a little bit stronger,’ says Ray Mann, channel development manager at ScalePad.

Client retention rates, recurring revenue rates, and the ability to track business metrics are among the top factors impacting customer satisfaction scores for MSPs.

That’s the word from Ray Mann, channel development manager at Vancouver, British Columbia-based ScalePad, who took time at this week’s XChange March 2025 conference to discuss the top MSP trends that ScalePad identified in its annual MSP trends report based on a survey of over 1,300 MSPs from one-person shops to the largest companies.

XChange March 2025 was hosted by CRN parent The Channel Company.

The report highlighted the challenges and trends the report uncovered. The goal, Mann said, was to provide MSPs with information to help make better business decisions.

Of those surveyed, nearly half were IT managers or supervisors, 15 percent were CEOs or owners, 15 percent were technicians. 8 percent were senior leaders, and the rest focused on account management, virtual CIO, and sales. Most of the businesses were between three and 10 years old, with only 10 percent less than three years old.

Mann said the report showed that high-performance MSPs had a major overlap a major between recurring revenue and client retention, making that a great metric for tracking performance across a whole variety of different categories.

“Top earning MSPs, regardless of size, are more likely to have higher client retention and recurring revenue rates, and they're showing that they have long-term partnerships leading to their consistent growth,” he said. “However, nearly a third of respondents have customer retention rates below 50 percent, meaning they have to replace half of their clientele every single year.”

The survey found that MSPs with high client satisfaction scores also show higher client retention and higher recurring revenue, Mann said. Being able to track service-focused metrics such as ticket volume, average first response time, average resolution time, and service uptime, is also a key to growing the business, he said.

“It shows that a strong client service strategy and highly productive staff can secure long-term contracts,” he said. “Those with low customer churn also tend to track more service-focused metrics compared to the average of their peer group. So more metrics is typically indicative, in this case, of maybe having a holistic view into your client experience, allowing you to build customer relationships a little bit stronger.”

MSPs with best-in-class CSAT, or customer satisfaction, scores were more likely to have higher recurring revenue and higher annual revenue, Mann said.

“Of course, these CSAT high performers are also more likely to be approaching the client engagement with more of a strategic consultative approach,” he said. “Some of the details about this group include they have formal customer success programs, client-based technology roadmaps, and lifecycle paths and renewal strategies in place. They offer a broader range of services, including less common ones, to their clients. They conduct monthly reviews or check-ins rather than quarterly business reviews, and they regularly collect customer feedback. On top of that, they also share more metrics with their clients such as lifecycle data in order to showcase the value they provide.”

About 35 percent of MSPs report recurring revenue rates of 11 percent to 25 percent, 29 percent report rates of 25 percent to 50 percent, while 19 percent report rates of 51 percent to 80 percent, Mann said.

According to the survey, the majority of MSPs expect to grow in 2025, with about half planning to do so by acquiring new clients while the remaining by offering new services or expanding their core partnerships, Mann said.

That focus on finding new business also explains why just over a third of MSPs are prioritizing marketing investment this year and are prioritizing hiring sales and marketing roles, he said.

“While larger marketing budgets do tend to lead to higher recurring revenue and overall revenue, MSPs say other factors hinder increased profitability,” he said. “Many MSPs see increasing costs, increasing competition from other MSPs, and shrinking client budgets as some of the biggest reasons why they're losing out on a lot of business. Doing things to increase operational efficiency and scale the business may be ways to focus on improving and increasing its profitability.”

ScalePad’s survey found that only 18 percent of MSPs feel that improving their data tracking is going to give them an advantage in 2025, Mann said.

“But when we're looking at the data, those that have more reports, more metrics, are tracking more KPIs, are actually tending to be the ones that are more high performers in a variety of different areas,” he said. “Those folks are leaning on vendors or building tools internally that improve their data, metrics, and reporting. This may be an area for MSPs to remember when looking at how they can improve their own businesses.”

Dave Wilson, a network engineer with Invario Network Engineers, a Falls Church, Va.-based MSP, told CRN that he found it helpful to see how his own experience compared to that of his peers.

“What I found interesting is how many of my competitors have such a low MRR (monthly recurring revenue,” Wilson said. “I'm definitely in the 51 [percent] to 80 percent range. It’s nice to hear I'm in a good spot. And I’ve been tracking EBITDA since 2017.”

That was the year Wilson said his company had a ransomware incident with some customers. That incident, while painful, caused him to focus his company on cybersecurity, which in turn helped prepare his company for sale in the near future. He has already signed a letter of intent with a potential buyer.

“That incident was an eye opener for two reasons,” he said. “One, it's like, OK, I got to get serious about cybersecurity. And two, nobody wants to buy my problems, so I need to turn this thing around and make it something that somebody wants to buy. And it was a good thing.”