10 KPIs All MSPs Should Be Tracking
We all know business analytics provide important insights that allow companies to adapt and change for the better. However, there are a variety of theories on which metrics should matter most to your business, often varying based on business type and industry. As a managed service provider (MSP), you may be asking yourself, “How can I use data to make smart decisions about my business in particular?”
Below are 10 key performance indicators (KPIs) that we suggest MSPs track. These 10 KPIs will help any MSP and have a positive impact on continuous business growth and profitability.
- Profitability: First, you need to know exactly where you are making money and where you are losing it. Start by identifying your current revenue stream, possible losses and underlying costs. Consider looking at profitability by end clients, contracts and offerings to gain an even more accurate understanding of the impact these items have on your monthly recurring revenue (MRR).
- Customer Satisfaction Score: Customer satisfaction, also known as CSAT, can be your greatest resource to gain insight into what’s working and what needs improvement. You can gather information to know if the client is happy, neutral or unhappy, at the click of a button.
- First Call Resolution: When it comes to providing support to clients, the ability to meet your promised service-level agreements (SLAs) is crucial. SLAs, however, may only scratch the surface when measuring performance. We recommend measuring your first call response (FCR) rates along with SLA performance. FCR is the percentage of tickets where the first call solved the problem and also measures the speed of resolution for your clients.
- Escalated Tickets: If you know the percentage of tickets that become escalated before they are resolved, then you can track help desk efficiency. Improving help desk efficiency means fewer touches by different resources before an issue is resolved, which equates to time and money saved on every incident. You will also want to review how much it costs when a ticket is escalated in addition to trending issues with ticket escalations, such as escalations by issue type.
- Resource Utilization: There are three main aspects to look at when measuring resource utilization: performance vs. projections, resource scheduling, and visibility into underlying costs. Having a general understanding of how much time it will take to complete common services will help you make service delivery time projections each month and determine how many resources are needed for those tasks.
- Newly Discovered Devices: Whether billing by device or per user, MSPs can use newly discovered devices to understand the current client IT estate and which devices should be covered under contract. Having an accurate view of all the devices in a customer’s network allows the MSP to ensure that the environment is secure.
- Contract Renewal: To help prevent churn, ensure you’re keeping track of when your customers are up for renewal. Having this information helps MSPs stay ahead on documentation that needs to be worked out for renewals and leaves time for potential negotiation. On average, it costs MSPs 5X more to acquire a new customer than it does to retain a current customer, so staying on top of renewals is a must.
- Project Status: Properly tracking projects will help you avoid spending excess time on projects that can result in losses. If tracked correctly at the onset, projects can be one of the most profitable areas of an MSP’s business.
- Sales Pipeline: A lot of MSPs do not have a dedicated sales team but rather a team that wears many hats. A PSA tool helps simplify the sales role with the CRM component providing forecasting and pipeline information. Be sure to aim for 4X pipeline for each dollar you spend to be profitable in your forecast.
- Sales Conversions: The last metric goes beyond the pipeline and into closed versus lost deals. This is your sales conversion rate. Every opportunity – won or lost – provides valuable insights into your sales process. This will help you to answer questions such as, “Are we targeting the right types of leads?” With those answers, you can refine the sales approach and build a repeatable process.
Start by determining which KPIs are most critical to your business. Think about the things that contribute directly to your business goals: revenue, customer retention, labor cost, efficiency, service-level compliance, etc. Be sure to measure these monthly and hold stakeholders accountable. For more detailed information on each of the above metrics, click here for our, “10 PSA KPIs All MSPs Should Be Tracking” ebook.
Joe Rourke is Director, Product Management, Datto.
This guest blog is part of a Channel Futures sponsorship.