Magazine Article | November 12, 2014

Say "No!" To Unprofitable Customers

By The Business Solutions Network

This $7 million MSP walked away from 90% of its prospects while still growing revenue 9%.

In 2013, Eric Gray’s company acquired only four new customers. Not 40, not 14, just four. Before you surmise this to be a story about an MSP (managed services provider) falling on hard times and coming up with a plan to quadruple new business growth in 2014, there are a few more details you must know.

First, there was no lack of leads acquired by Gray’s company, Convergence Networks, last year — in fact, there were nearly 40. Second, nearly 80 percent of those leads were “warm” leads acquired through customer referrals. And third, when this MSP presents a prospective customer with a contract, it closes the sale 50 percent of the time. All of that means that in 2013 Convergence Networks intentionally KO’d more than 30 prospects. Despite acquiring such a small number of new clients, the MSP experienced 9 percent revenue growth over 2012, and it maintained double-digit profit margins per customer.

VIEW THE MAGAZINE ARTICLE!
Signing up provides unlimited access to:
Signing up provides unlimited access to:
  • Trend and Leadership Articles
  • Case Studies
  • Extensive Product Database
  • Premium Content
HELLO. PLEASE LOG IN. X

Not yet a member of VAR Insights? Register today.

ACCOUNT SIGN UP X
Please fill in your account details
Login Information
I'm interested in newsletter subscriptions.
ACCOUNT SIGN UP

Subscriptions

Sign up for the newsletter that brings you the industry's latest news, technologies, trends and products.