Managed Services: What’s A Good Customer Retention Rate?

How do managed services providers (MSPs) measure success? Popular metrics include profit margins, monthly recurring revenues (MRR), revenue per employee, and overall business growth rates. But MDL Technology, an MSP in Kansas City, is bragging about another statistic: Customer retention rates. Maybe you should be bragging, too.

MDL Technology claims its has maintained a 98 percent customer retention rate over the past five years. That’s pretty amazing considering all the economic turbulence since 2007. Even if your customer base includes a bunch of healthy businesses, chances are you’re tempted to fire a few of the more difficult customers from time to time.

Yet there’s MDL Technology pointing to the 98 percent retention rate. While MDL provides remote support services, the company also focuses on “optimal response time” to any customer location in the Kansas City. So far, the company claims, it’s supporting more than 100 customer locations across Kansas City.

As the old saying goes: The easiest customer to sell to is an existing customer. I don’t have a feel for MDL Technologies’ profit margins or overall growth rates. But the customer retention stat certainly caught my attention.