The MSP Change Study - Why Businesses Change Providers

Let’s be real—being an MSP is cutthroat. You’re not just holding on to clients but constantly working to gain new ones. But what really dictates a client’s decision to stay or switch IT service providers? Our Change Study provides that answer. By understanding the reasons why clients leave, how they find new providers, and what they value most, your MSP can preemptively address concerns, retain clients, and establish itself as the best choice for prospective customers.

Let's look at this more.

TLDR: Download the Cheat Sheet Infographic Here!

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Why Ask the Question?

Why are clients leaving their MSPs? How are they choosing new ones? These questions are not trivial. MSPs lose clients for various reasons, and unless you understand the "why," you can’t improve retention or refine your approach to gaining new customers. This study serves as a blueprint for solving these retention and acquisition puzzles by highlighting patterns in client behavior that you might not have considered before.

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Who Did We Poll?

We kept it real, we conducted a focused survey across decision-makers who actively use MSP services. Here are the demographics of the respondents:

• Age: Majority aged between 35-44 (36%), followed by those aged 25-34 (22%) and 45-54 (20%).
• Roles: Key decision-makers such as presidents, CEOs, owners, and C-level executives.
• Industry Representation: Sectors spanned from construction to finance and healthcare.
• Company Size: Businesses with 11-100 employees.
• Location: All respondents were based in the United States.

These demographics ensure diverse perspectives, reflecting the realities of different industries and organizational sizes while offering an accurate snapshot of client decision-making processes.

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So... Why Do Clients Leave Their Current MSPs?

The reasons clients leave boil down to dissatisfaction, unmet expectations, or a better alternative. Here are the top drivers for switching MSPs:

• High Costs (46%): Clients constantly evaluate if the services they're paying for align with the value they’re receiving.
• Desire for Improved Technology or Innovation (41%): Clients seek forward-thinking MSPs who offer cutting-edge tech and proactive solutions.
• Concerns Over Data Security or Compliance (40%): Many businesses are unwilling to risk vulnerabilities or outdated IT protocols.
• Poor Technical Support (38%): When the service doesn't meet expectations, clients reevaluate their provider.
• Lack of Industry Knowledge (31%): Specialization matters. Clients want providers who deeply understand their industry needs.
• Better Reputation Elsewhere (30%): Word-of-mouth and a good track record are powerful motivators.
• Relationship or Communication Issues (27%): A lack of clear communication can quickly erode trust.

Understanding these pain points highlights areas where your MSP can fine-tune processes, deepen expertise, or improve transparency to address dissatisfaction before it escalates into client churn.

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Where Do Clients Find New MSPs?

When clients decide to switch MSPs, how do they find replacements? Here’s what our data revealed:

• Online Research (34%): A strong digital presence (including reviews) is critical.
• Referrals (19%): Recommendations from colleagues or partners hold weight in decision-making.
• Google Searches (7%): SEO matters! Ensure your site is optimized for relevant search terms like “IT support for [industry].”
• Industry Associations and Directories (6%): Participating in industry-specific networks boosts your visibility.
• Word of Mouth (8%): Positive experiences shared between peers drive awareness.

• Wait! That’s not entirely 100% - Some of our responses included one-off answers that needed to be summarized—see the details below:

  • Online 54% Combined
  • Word of Mouth/Referral 32% Combined
  • Download the cheat sheet here for more combined data

Having a robust and diverse digital strategy ensures you are visible where decision-makers are looking, whether through organic search, paid ads, or being listed on trusted platforms in your niche.

Are you ready to tackle that 54% online? Check your Marketing Maturity Score

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Additional Takeaways from the Study

Here are some other points that can help you align your strategy to better meet client expectations:

• Clients Evaluate Regularly: 31% of respondents evaluate their MSP every year, and 21% every 2-3 years. This means clients are constantly assessing their options, whether you realize it or not.
• Switching Windows: Dissatisfaction or contract renewals are common triggers for reevaluation. Be proactive in addressing potential concerns before these milestones.
• Tech Lovers Unite: Many clients are drawn to MSPs who prioritize innovation and proactive IT strategies. A stagnant offering is a surefire way to lose relevance.

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How to Ensure You Retain Your Clients

Armed with this data, here’s how your MSP can increase retention rates:

1. Deliver Outstanding Support: Your service desk is the heart of your client’s experience. Fast response times and clear resolutions go a long way. (Seems like a no brainer, but we had to say it)
2. Be Transparent About Costs: Offer regular value assessments to ensure your pricing aligns with the deliverables. Clearly articulate what clients gain from your services.
3. Focus on Innovation: Continuously explore and implement emerging tech. Keep clients updated on how these innovations benefit their business.
4. Prioritize Security: Regularly review and fortify client systems to protect against growing cyberthreats. Ensure compliance with data laws and meet industry standards.
5. Build Strong Relationships: Schedule regular check-ins, provide proactive solutions, and address client concerns before they grow. Communication is a major trust-builder. (not just QBR's but real relationships here folks)

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How to Gain New Clients

To gain traction in the MSP marketplace, your acquisition strategies should focus on visibility and credibility:

1. Strengthen Your Online Presence - Starty by using the grading your website for free!

2. Leverage Referrals

3. Showcase Expertise

4. Tailored Communication - Does a CRM like Website work for you? Checkout the ROI Calculator

Answer questions before they are asked. Remember, you're not having conversations with people anymore; they are having those conversations with your digital assets without you. Make sure you are answering what they are thinking.

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What Every MSP Should Know About Why Clients Switch

This study reveals that understanding your clients’ expectations and leveraging this knowledge is key to staying competitive. Engage consistently, provide clear value, and differentiate your MSP with impeccable service and innovation.

Download our cheat sheet for this study here and hang it in your breakroom as a reminder to everyone that, if executed correctly, there is a great opportunity to get new clients. However, the chance to lose a client is a daily struggle that you need to keep top of mind.