Your Next Client Already Has an MSP. Sell Like It.

Ask a thousand MSPs where their new clients come from and the honest answer is: from each other. In Kaseya’s 2026 State of the MSP survey, 1,061 providers fielded in November 2025, only 12 percent say their new clients are mostly first-time MSP users. A third say new clients mostly switch from another provider. Half see a mix. The report’s own sentence carries the thesis: growth depends more on winning clients from competitors than on signing first-time users. The market is not minting customers anymore. It is circulating them.

Once that shape is visible, the rest of the survey reads differently.

Acquisition got harder because every deal has an incumbent

Acquiring new customers is the top business issue for MSPs at 71 percent, well ahead of cybersecurity at 53 and revenue growth at 49, in a survey where respondents pick exactly three concerns. Acquisition got harder for a structural reason: almost every deal now has an incumbent in it, and the incumbent holds the contract, the documentation, and the switching friction.

Incumbency is a real moat, and it is worth naming what sits inside it. The incumbent knows the renewal date; the challenger has to guess it. The incumbent holds the admin credentials, the network documentation, and the institutional memory of every exception the client ever asked for. Above all, the client remembers what the last transition cost in disruption, and prices that memory into every pitch a challenger makes. A displacement seller is not really selling against the competitor’s service quality. The seller is selling against the buyer’s memory of the last migration.

Deal economics confirm the squeeze. Clients spending $25,000 or more a year fell from 75 percent to 41 percent of the typical book, while sub-$25,000 clients more than doubled to 55 percent. A third of providers cite slower new client acquisition as a key economic drag, and a quarter report clients cutting IT budgets outright. And the share of MSPs struggling to demonstrate value to prospects quickly nearly doubled, from 10 to 19 percent, which is what selling against an incumbent feels like: the prospect already has a baseline, and vague value claims lose to a baseline every time.

Every book in the market is in play

The buyer side says the door is open. Barracuda’s MSP Customer Insight Report, a Vanson Bourne survey of 2,000 senior security decision-makers at organizations of 50 to 2,000 employees, fielded in spring 2025, asked buyers what would make them leave their MSP. Two percent said nothing would. Everyone else named a condition. The top deal-breaker is not price: 45 percent would leave an MSP that cannot back up its security skills and its 24/7 support setup with evidence. A cost increase on security services and a better security offer from a rival MSP tied at 38 percent.

WatchGuard’s 2026 survey of 842 IT and security decision-makers, fielded in April, points the same direction: 58 percent plan to switch providers within the next three years. Both figures are stated intent, and intent is softer than observed behavior. Read them as a seller anyway. The market’s entire installed base sits with its door unlocked, and that includes yours.

The same research shows the door swings on capability, not on rate cards. In the WatchGuard data, 47 percent of those decision-makers will pay a premium for 24/7 monitoring and faster response. Hold that against the deal-breaker list. Buyers leave over missing proof and pay extra for present proof. A displacement deal is a capability deal wearing price-deal clothing: the incumbent who believes it lost on price usually lost on evidence months earlier, and the price objection showed up after the decision was already made.

Offense and defense are one discipline

Barracuda’s cascade figure raises the stakes on the defensive side. Among departing customers who bundle IT services with security, 89 percent take the rest of the relationship with them, 46 percent at the same time and 42 percent later. Losing the security conversation forfeits the book.

The willingness-to-pay data cuts the other way, in the incumbent’s favor: 92 percent of those buyers are prepared to pay more for help integrating their security tools, and roughly 70 percent are prepared to pay 10 to 25 percent more. Loyalty in this market is conditional on proof, and buyers will fund the proof. The provider who keeps demonstrating skill gets paid a premium to stay; the provider who stops demonstrating it becomes the 45 percent statistic in someone else’s pipeline review.

In practice the proof is a one-page quarterly artifact, not a project: response times against the contract, incidents closed and time to close, the security posture changes since last quarter, and what the roadmap commits to next. That is an hour of assembly per client per quarter, priced against what the 45 percent statistic costs when it fires inside your own base.

Here is the strange part: the industry does not instrument the fight it is in. The flagship provider survey measures no churn, no retention, no client tenure, and no acquisition channel. No published benchmark separates win rates against incumbents from open-field deals, and no named study quantifies what share of new MSP clients arrive by referral. All of it was searched for this piece; the numbers do not exist in public. Operators are fighting a displacement war with acquisition-era instruments.

Sell like the market actually works

Map the triggers. In a displacement market, the productive question is which accounts just hit a switching condition: a renewal window, a price increase, a service failure at the incumbent, an ownership change on the client side. Most of these are buildable from public and near-public signals: an acquisition announcement, a leadership change on the buyer side, a competitor’s publicized outage, insurance renewal season in the client’s industry, and the oldest signal of all, a contract anniversary. Assign each named target account a trigger owner and a next-review date, the way delivery assigns a technician to a ticket. A trigger list per competitor beats a bigger cold list every quarter, because timing decides displacement deals and volume does not.

Lead with the evidence pack. The number one deal-breaker buyers name is an evidence failure. Certifications, the 24/7 roster, response-time receipts, escalation paths in writing: a proposal in a displacement deal is an audit the prospect runs on your claims, and the incumbent fails it by default if you make the audit easy. Build the pack once as a library and tailor it per deal in an hour: the roster page with real names and shifts, the response-time distribution pulled from the PSA, reference clients matched to the prospect’s industry, and a transition plan that answers the fear the buyer will not say out loud, which is that switching hurts more than staying.

Run the same evidence at renewal. The 2 percent figure means almost no client is structurally safe, so retention is a performance with a quarterly schedule. The same pack that wins a takeout deal, presented to your own base before anyone asks, is the cheapest defense available. The quarterly business review is the natural stage for it. Run the QBR as proof, and the renewal conversation stops being a negotiation about rate and becomes a review of receipts.

Guard the security line like it is the whole relationship. It is: 89 percent of bundle clients leave entirely when the security relationship breaks. Whatever gets monitored most closely in delivery, the security conversation deserves the same instrumentation in the revenue org.

Instrument the displacement. Track which competitor each new logo left and why, the win rate when an incumbent is present, and the save rate after a trigger fires inside your own base. Save rate means: of the accounts where a switching condition occurred, a price increase you initiated, an incident, a stakeholder change, what share renewed anyway. No benchmark exists to compare against, which is a gift. Your own trailing numbers become the standard, and most competitors have never looked at theirs.

One more reason to build the instruments, for operators who plan to face a buyer someday: a displacement-aware book reads differently in a process. Source-of-logo data tells a diligence team the growth is repeatable takeout rather than luck, and a documented save rate turns the retention story from a claim into a table. The same instruments that win quarters survive a data room.

The 12-33-49 shape is not a bad year. It is the structure of the market now. Selling like the market mints first-timers means waiting for buyers who mostly do not exist. Selling like it circulates means picking the moment, arriving with evidence, and holding your own base to the same standard you attack someone else’s with. And the math favors whoever moves first, because 98 percent of the buyers in every competitor’s book say something could make them switch.