Customer retention has always been a priority for managed service providers (MSPs), but IT vendors are now placing even greater emphasis on it—and backing that focus with financial incentives.
Doubling down on customer retention
Amazon Web Services (AWS), for example, is rolling out new partner program updates next year designed to reward MSPs that invest in customer success. The first, the MSP Incentive for Customer Management, recognizes partners that help customers adopt and actively use cloud solutions. The second, the MSP Incentive for Strategic Services, rewards MSPs for driving adoption of high‑value AWS offerings tied to specific strategic services.
While customer management incentives aren’t new, it’s easy for MSPs to become complacent over time. Clients don’t always voice dissatisfaction until contract renewal—and by then, they may have already evaluated alternative providers and discovered how far their budget could stretch elsewhere. These programs encourage MSPs to stay consistently engaged and prevent avoidable churn.
Employee incentives strengthen MSP performance
Employee engagement is another key piece of the puzzle. Most team members understand the link between revenue growth and job security, but tangible, well‑designed incentive structures are far more motivating. Programs that reward measurable achievements—such as customer satisfaction improvements, new client acquisition, or expanded sales within existing accounts—provide clarity and focus that benefits both employees and the business.
Some vendors even enable MSPs to earn commissions for referring customers to services they don’t directly offer. Others, including AWS, are funding Partner Greenfield Programs (PGPs) to accelerate development of new MSP offerings such as application modernization or cybersecurity services. These initiatives help MSPs diversify their portfolio without shouldering all the upfront investment themselves.
Vendor funding opens new paths for service expansion
Although it’s difficult to quantify how much IT vendors are investing in customer management incentives, MSPs should view these programs as meaningful opportunities for growth. In the past, expansion relied heavily on setting aside slim profits—an uphill battle for MSPs operating on tight margins. Today, vendor-backed incentives can help offset costs and reduce risk, particularly as demand grows for a broader range of services.
As MSPs look ahead to the New Year, now is the time to reassess and expand their services strategy. The reality is that the price clients are willing to pay for established offerings will continue to decline, putting pressure on profitability. Broadening the portfolio is essential to maintaining a healthy margin and staying competitive.
MSPs that make smart, forward‑looking investments in 2026 will be better positioned to navigate economic uncertainty and capitalize on new opportunities. The key challenge will be finding the right balance between returning profits to stakeholders and reinvesting enough to fuel sustainable, long‑term growth.
Photo: Andrii Yalanskyi / Shutterstock
This post originally appeared on Smarter MSP.