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Identify Your Most Profitable Customers, Business Practices


Oct, 14


Identify Your Most Profitable Customers, Business Practices

After years of helping customers solve various IT and business problems, it’s easy to become an IT “jack of all trades.” This was the situation break-fix VAR turned MSP Onsupport found itself in 2008 when the recession hit. As new business opportunities became harder to come by, the service provider knew it had to make some difficult choices.

risk_profitDespite the loss of some large clients during the recession, many of Onsupport’s SMB clients still needed its consulting expertise. “Unlike the 1,000-plus employee companies that occasionally needed outside IT support for specific projects, the 25-to-250-employee SMBs needed ongoing IT and consulting support,” says Randy Steinle, voice president of Onsupport. “Also, with SMB clients we worked directly with the business owners and other top executives, which made it possible to develop closer relationships and have higher-level business discussions, which is what we do best.”

The next step in Onsupport’s evolution entailed identifying its most profitable technology solutions and services. “When we began this exercise six years ago, we had 30 IT specialties, and today we have five,” says Steinle. “It’s been a gradual process, but consistent profit growth has followed every decision.”

The litmus test Onsupport uses to determine which technologies/ specialties to keep includes three criteria:“We look for IT solutions and services that require proactive management, fixed contracts, and recurring revenue,” says Steinle. In other words, Onsupport made a firm decision to turn away from one-off IT projects and to focus instead on building a managed services and IT consulting practice. For existing lines of business that were deemed to be not part of the MSP’s core business, it figured out a successful strategy for discontinuing those services and practices, too.

The result of Onsupport’s business decision has been year-over-year profitability growth of 100%. You can read more about this MSP’s business transformation by reading “Create Stability, Profitability With Managed Services” in this month’s issue of Business Solutions magazine.

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