If there’s one thing about being a managed service provider (MSP), it’s learning how to speak in acronyms! And at the top of every MSP’s list of important acronyms? MRR.

Monthly recurring revenue (MRR) is the lifeblood of any MSP and can indicate whether or not your MSP is poised to grow and scale. Having a steady stream of MRR can breed predictability, stability, and scalability. But as all MSPs know, MRR is not a guarantee. As clients churn, services get commoditized, and margins shrink, MRR starts to unravel.

There’s good news. Protecting MRR does not mean overburdening your team or frantically chasing down clients. Sustainable MRR growth comes from streamlining your operations, strengthening client relationships, and utilizing the resources you already have.
In this article, we’ll elaborate on five practical ways to protect and grow your MRR without causing your team to burn out.

1. Show value beyond meeting SLAs

At a minimum, your clients expect you to meet your SLAs. That’s a given. Consistently meeting SLAs is not enough - your clients agreed to pay you because they expect you to do that every time. So how can you make your value more visible? Shine a light on what happens behind the scenes.

Reinforce your value by:

• Sharing data. Use facts to show results. Track downtime prevented, tickets closed within SLA, cost savings from efficiency, and updates made. Package important metrics into a shareable dashboard or a monthly report.
• Connecting the dots for your clients. Don’t send a report or dashboard without any context. Paint a picture for your clients by being direct about your work. For example, you might say, “Our monitoring caught a hardware issue on your device before it failed, helping you avoid a four-hour outage.”
• Communicating on a regular basis. Schedule regular check-ins and QBRs with your client as an opportunity to give more context to your services and to position yourself as a partner, not just another vendor.

Clients who truly understand the impact you’re making are more likely to renew their contracts and expand their services with you.

2. Shut off revenue leaks

MRR typically bleeds away slowly versus in one big drop. MSPs need to be proactive about patching up leaks before they become unmanageable. Small, deliberate fixes can ensure you don’t fall short in important areas that impact MRR.

Here are some ideas:

• Inconsistent service? Tighten up by automating your processes and standardizing with playbooks.
• Outdated offerings? Audit your tech stack every quarter to spot opportunities to modernize and align with client needs.
• Being dulled by commoditization? Focus your messaging on client pain points and outcomes instead of standard features. Instead of “24/7 monitoring”, say “we protect your business from $X in downtime risk”.
• Tight margins? Dig deep into each client’s profitability to understand if any contracts are dragging margins down. If so, consider repricing or rescoping.

Consistent, internal audits every quarter can highlight MRR leaks that may have otherwise gone unnoticed. Do your due diligence to protect your MRR.

3. Build service packages that are recession-proof

Economic and market fluctuations are normal and to be expected, but should not put your MRR at risk. When budgets tighten, clients look for places to cut, so make sure you’re indispensable. Bundling services tied to outcomes makes you look valuable and will make clients want to stick around, versus providing à la carte services that are easier to drop.

Consider creating tiered packages (like Essential, Pro, and Premium) that offer varying degrees of high-impact services, such as:

• Security awareness training
• Automated onboarding and offboarding
• Endpoint detection and response (EDR)
• Mobile-device management (MDM)
• Compliance reporting

Bundled services can bring in predictable revenue and strengthen retention, both of which will benefit your MSP in any economic condition. And your clients will know exactly what they’re paying for and understand your pricing structure, driving the perceived value of your MSP up.

4. Maximize growth with your existing client base

Securing new logos is nice but doesn’t always drive meaningful growth. To unlock more revenue, many MSPs turn to their existing clients and focus on deepening their relationships.

A trusting and collaborative relationship with your clients can create opportunities to:

• Upsell with intention. By getting intimate with your client’s business and operations, you can look for natural fits to upsell, like offering compliance add-ons for clients required to meet regulatory demands.
• Cross-sell strategically. Because your clients already trust you, you can pair existing services with complementary ones, such as bundling vCIO services with security awareness training.
• Prevent churn using data. Track client health with surveys or health scores to flag at-risk accounts before it’s too late. Proactive outreach can lead to more revenue.

Part of a sustainable path to growth is being realistic about your limits. On average, a tech can manage around 200-300 endpoints, and knowing your capacity can help you plan for growth without overburdening your team.

5. Let data be your guide

The best MSPs don’t rely solely on their gut instincts or their training. They rely on data to tell them the full story and help guide their decisions. If you’re not diving deep into your metrics, your MRR might be at risk.

These metrics can help you keep your finger on the pulse of your MRR:

• Churn - is your churn rate too high? Are you losing clients faster than you’re replacing them?
• Customer lifetime value (CLTV) - does the total value of your client relationships make sense in relation to your acquisition costs and your pricing structure?
• Gross margin per client - are there clients who are pulling your overall margins down?

Know your numbers, review them often, and let them guide your decisions around price adjustments, bundled packages, and resource allocation.

Protecting MRR helps you scale

Growing your business and client base doesn’t always safeguard your MRR. Deepening client relationships, shining a light on your value, making your services sticky, and focusing on your data - this is how you protect your MRR, build meaningful recurring revenue, and reach a scalable level of MSP maturity.

Want to know how streamlining your operations can help you focus on your MRR?

Try a free 14-day trial of LogMeIn Resolve to see how the right technology can empower you to build a sustainable path to growth.