Your Ideal Client Profile Is a Revenue Strategy - Not a Description

The Ideal Client Profile Is a Revenue Model — Not a Customer Description

Most MSP owners, when pressed, will produce a description of their typical client and call it an ICP. They'll reference a seat count, an industry vertical, maybe a geography. That's a customer description, and it has almost nothing to do with whether that client can generate the revenue trajectory the business actually needs. The real function of an ideal client profile is to define the economic relationship your business requires with each client — what they'll spend on recurring services, what they'll produce in project and hourly revenue above that base, and whether their own growth trajectory will compound your revenue over time without requiring constant new client acquisition. When you confuse a description of who currently pays you with a strategy for who should pay you, every downstream decision — hiring, staffing, agreement structure, account management investment — gets built on a foundation that can't support the weight of your growth goals.

• The typical client profile (TCP) describes what already exists. The ideal client profile defines what your business needs to exist in order to grow at the rate you've committed to.
• An ICP that doesn't include expected pull-through rate, growth trajectory, and project capacity isn't a strategy — it's a description wearing the wrong label.
• Every MSP owner who says "we'll take anyone" has already made a strategic decision — they've just made one that removes the ability to plan around it.

Pull-Through Rate Is the Financial Story Hiding in Your Data

Pull-through rate — sometimes called drag-along rate — measures how much project, hourly, and product revenue your client base generates relative to your recurring managed services base. It is the single most revealing metric for determining whether your clients are growth-capable or maintenance-locked. An MSP operating with an unintentional 15% pull-through rate has a fundamentally different business than one targeting 35% and structuring agreements, staffing, and account management to reach it. The clients generating a $36,000 annual contract that also produce $20,000 in project work are telling you something with their dollars — they want to grow, and they want you to help. The clients generating $18,000 a year with zero project activity are telling you something equally clear. Both of those stories need to be heard, measured, and planned around. The most mature MSPs in the industry — the ones operating at $50 million and above — are targeting 100% or more on pull-through rate. That means for every dollar of recurring revenue, they're generating at least another dollar in project, hourly, and product revenue from the same client base.

• Target benchmarks: 30% or more from project work, 20% from hourly, and the remainder from resold cloud licenses and product. Total target: 100% pull-through rate at maturity.
• If 80% of your service revenue comes from recurring, there is almost certainly money being left on the table in hourly and project work — and your agreement gross profit is likely suffering as a result.
• The first step is diagnostic: break your service revenue P&L into recurring, project, and hourly. If those categories don't exist in your chart of accounts, that's the first problem to solve.

The $2 Million Ceiling Is a Client Quality Problem

The conventional wisdom is that MSPs get stuck at $2 million because of sales or operations. That's partially true, but there's a deeper structural issue: most $2 million MSPs have 35 to 40 clients, and those clients are predominantly small — $1,500 to $4,000 per month agreements with companies that aren't trying to grow aggressively. They don't produce meaningful project work. They don't add users at a rate that moves the needle. They are, by every economic measure, maintenance clients. Having 35 of them feels like a business, but it's actually a constraint disguised as a client base. Compare that to the $2 million MSP with 17 clients, which sounds like it should be stronger but actually reveals the same problem from a different angle: if those 17 clients have been stable for five or ten years, they aren't growing, and they aren't going to suddenly start. The number of clients is less important than the growth trajectory and spending behavior of each one. That's what an ICP is supposed to clarify — and it's why so many $2 million MSPs remain $2 million MSPs for years.

• A 10-person accounting firm that's been at 15 seats for a decade is not going to light the world on fire with technology investments. That's a valid client — just know the story it tells.
• If your pull-through rate with your existing base is 15% and you've put no intention behind it, you've learned something useful. If it's still 15% after 18 months of focused account management, you've confirmed that your client base has a structural ceiling.
• The next 17 clients — or 35, or whatever your model requires — need to be selected against a revenue strategy, not just an availability signal.

Honoring What Your Clients Are Already Telling You

There's a version of the ICP conversation that's about what the MSP wants. But the more important version is about what the client is already signaling. When a client submits project work — new user onboarding, infrastructure upgrades, cloud migrations, application deployments — they're making an investment decision. They're telling you they want to grow and they want you to be part of that growth. Failing to staff for that work, letting projects drag out because your support techs are overloaded, or never asking the client about their business plans isn't just a missed revenue opportunity — it's a breach of the advisory relationship most MSPs claim to have. The clients who want to grow are the ones most likely to leave when someone else shows up and asks the right questions. That competitor won't be better at helpdesk. They'll just be better at listening to what the client has been saying all along.

• Project backlog erosion — where project timelines stretch and scope gets ambiguous because you didn't hire for it — is one of the most common and least-measured problems in the MSP industry.
• If you haven't had the conversation with your clients about where their business is heading and how technology fits into that plan, you haven't earned the advisory title. That conversation is the prerequisite.
• The real risk of inaction: a competitor or a new category of technology provider shows up at your client's planning table because you never sat down at it.

AI Changes Who Your Ideal Client Should Be — Starting Now

The AI and automation wave isn't a future event to prepare for — it's a current force reshaping how MSP clients think about technology. Business owners who never had anything interesting to imagine in IT are now being exposed to automation, AI agents, and process optimization through their own peer networks and public platforms. They have something to talk about. They have something to want. And if their MSP can't be part of that conversation, someone else will be. The MSSP parallel from 2014-2015 is instructive: security wasn't optional, a new category of company emerged to serve it, and some of those companies are now $75 million operations that didn't exist a decade ago. The same structural opportunity exists now for MSPs willing to expand their offering into AI-enabled business technology — not as a buzzword, but as a product and service category that their clients are beginning to demand. The MSPs who define their ideal client to include companies that want both operational IT support and growth-oriented technology development will position themselves for the next decade. Everyone else will watch their share of the client's wallet shrink.

• The line between software development and IT support is dissolving. AI is giving MSPs the ability to build, integrate, and deliver systems that were previously the exclusive domain of development shops. The MSPs that embrace this will have an economic moat the others cannot replicate.
• Per-user billing models face a structural threat if client headcounts decline due to automation. MSPs that have already diversified into project-based and advisory revenue will be insulated. MSPs that haven't will watch their recurring base shrink without replacement.
• The ideal client of 2028 is a company that wants both its current IT maintained and its future operations built. Your ICP needs to reflect that shift now, not after the market has already moved.

Frequently Asked Questions

What is the difference between an ideal client profile and a typical client profile?

A typical client profile describes who you're currently serving — seat count, vertical, geography, monthly contract size. An ideal client profile defines the economic and behavioral characteristics a client must have to support your growth plan — including growth trajectory, spending behavior on projects and hourly work, and alignment with your service model. The TCP is descriptive. The ICP is strategic.

What is pull-through rate for an MSP?

Pull-through rate measures how much additional revenue (project, hourly, and product) your clients generate above and beyond their recurring managed services agreement. A client paying $3,000/month in recurring who also generates $1,000/month in project, hourly, and product work has roughly a 33% pull-through rate. Mature MSPs target 100% or more — meaning the total client value is at least double the recurring contract.

What should my pull-through rate targets be?

Bering McKinley recommends targeting at least 30% from project work, 20% from hourly work, and the remainder from resold cloud licenses and product. At full maturity, a 100% total pull-through rate is the benchmark used by MSPs operating at $50 million and above. If you're currently at 15% with no intention behind it, that's your baseline — not your ceiling.

Why do MSPs get stuck at $2 million in revenue?

Multiple factors contribute, but a primary structural cause is client quality. Most $2 million MSPs have 35-40 clients generating $1,500-$4,000/month with minimal project or hourly revenue. Those clients aren't growing aggressively, which means the MSP's growth has to come entirely from new client acquisition rather than organic expansion within the existing base. Redefining the ICP is the first step to breaking that ceiling.

Should I fire clients who don't fit my ideal client profile?

Not necessarily. The goal isn't to fire every non-ideal client — it's to understand what each client type contributes so you can plan accordingly. A client with a 15% pull-through rate who's stable and pays on time still has value. Just know the story: that client isn't going to drive your growth. Your growth will come from new clients who match the ICP. Plan your hiring, account management investment, and sales targets around that reality.

How does AI affect my ideal client profile?

AI is reshaping client expectations and creating new service categories. Clients who historically only needed helpdesk and infrastructure support are now asking about automation, AI agents, and process optimization. An ICP designed for 2020 may not serve you in 2028. Additionally, per-user billing models face risk if AI reduces client headcounts. MSPs that define their ICP to include companies wanting both operational support and technology development will capture a larger share of the client's wallet and be more resilient to billing model disruption.

Episode Highlights

• 00:36 — The critical difference between describing your current client base and defining the client your business actually needs to grow
• 02:05 — Pull-through rate as the hidden metric that determines whether your growth plan is viable or aspirational
• 07:53 — Why saying yes to every client creates a growth ceiling that no amount of sales effort can break through
• 10:18 — The $75M MSP that raised its minimum to $15,000/month — and why that decision was about maturity, not arrogance
• 14:44 — A $2M MSP with 17 clients that sounds strong on paper but reveals a structural growth problem underneath
• 17:39 — Knowing your story: how a 15% pull-through rate tells you exactly how to allocate resources and where growth will come from
• 24:15 — DRIP (Data Rich, Information Poor) — the phrase that describes why most MSPs have the answers they need but haven't mined them yet
• 29:33 — Why under-staffing for project work doesn't just leave money on the table — it erodes the client relationship and invites competitors in
• 34:35 — The obligation to honor what clients are signaling with their project dollars — and the risk of ignoring it
• 38:35 — The MSSP parallel: how a new category of $50M+ company emerged from the security wave, and why AI is creating the same opportunity now
• 44:23 — Information sharing and the MSP's seat at the client's planning table — why being absent is no longer a neutral position
• 53:04 — The weekend challenge: take an honest look at your ICP, your pull-through rate, and your strategic plan — and see if they actually connect

About the Co-Host: Gary Boyle

Gary Boyle is a Partner for Strategy & Business Development at Bering McKinley. With a background spanning network engineering, entrepreneurship, and strategic consulting, Gary brings real-world operator experience to helping MSP owners build stronger, more profitable businesses. His perspective combines hands-on technical knowledge with executive-level business strategy — exactly the combination MSP owners need when defining their ideal client and structuring their growth model.

Connect with Gary on LinkedIn →

About the Host: Josh Peterson

Josh Peterson is the CEO of Bering McKinley and host of The BMK Vision Podcast. Since 2004, Josh has worked with hundreds of MSP owners to build operationally sound, profitable businesses through consulting, peer teams, and direct coaching.

Connect with Josh Peterson on LinkedIn →

Related Resources from Bering McKinley

• Why MSPs Get Stuck at $2M — And What Actually Breaks the Ceiling
• Why You're Not Paying Enough Attention to Agreement Gross Profits
• Don't Get Hooked on Recurring Revenue
• Billing Your Clients Hourly Is Worth Your Time

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Your ideal client profile isn't a document to check off — it's the foundation of every growth decision you'll make. The BMK Vision Operating System helps MSP owners connect their ICP to their strategic plan, revenue targets, and operational structure so growth happens with intention, not accident.