3 MSP Metrics (Beyond Profitability) That Indicate Success
It’s tempting for MSP business owners to gauge their success based solely on profitability. And, while this highly important metric shouldn’t be ignored, it doesn’t offer the total picture of a company’s success — especially if you’re a VAR that’s only recently made the transition to selling managed services. Before you make a judgment about the success of your company, consider how you fare in the following three areas.
1. Customer Satisfaction
Many MSPs like to brag about their customer wins and what they’ve been able to accomplish for customers, but the big question is: Are your customers bragging about working with your company? To objectively gauge customer satisfaction, consider using your Professional Service Automation (PSA) tool to assist with customer surveys. What’s nice about this is that it makes it easier to get feedback immediately after you’ve delivered value, such as closing a ticket after fixing a computer problem.
Using a PSA, a short survey can automatically be emailed to your customer after the ticket is closed, and with most tools you can see when the email’s been opened. Additionally, filters can be added, so that the same person doesn’t receive more than one survey within a 30-day window, for instance. A simple format of five to 10 questions with a one to 10 satisfaction scale and at least one open-ended question allowing customers to leave comments is a good place to start. Any responses below an acceptable satisfaction level present an opportunity to immediately follow up with a customer and fix whatever’s preventing them from giving you a better score. Positive feedback presents a good opportunity to thank a customer personally and get permission to quote them on your website or in your marketing collateral.
Customer retention is another important metric that goes hand-in-hand with customer satisfaction — especially when you consider the cost of acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. Focusing on customer retention can help you set SMART goals for your MSP that are specific, measurable, achievable, relevant and timely. Highlight what you want to achieve with your customer retention goal, and be specific. For example, do you want to limit customer churn to 5 percent over the course of year? Decide how often you’re going to track your progress toward this goal and how you’ll measure your success. Make sure you’re setting yourself up for an achievable and relevant goal that will help your MSP grow, and give your team enough time to achieve the results you’re striving for.
2. Employee Satisfaction
If finding and retaining good customers is the top MSP challenge, finding and retaining good employees is a close second. With such high demand for skilled technicians in the industry, every staff member counts. Keeping your employees happy can take time and effort, but the reality is employees’ attitudes are contagious, not only with one another but with customers, too.
One of the biggest mistakes MSPs make with their employees is treating them like their business automation tools (i.e., “set it and forget it”). This can lead to boredom, burnout and employee churn, all of which have a negative impact on your MSP. To avoid these scenarios, MSP business managers must meet with employees one-on-one to establish goals. Where do they want to take their career? Is there a clear path for growth? What skills can they work on developing that will help both your business and their career? Focusing on development goals together can help build employee morale and create a more positive atmosphere for customers and employees alike.
3. Offering Multiple Solutions
For MSPs that address the first two areas (customer and employee satisfaction), the next area to work on is being able to offer multiple solutions that address a wide range of customer business challenges. Many industry reports show that when a customer buys multiple products from an MSP, retention rates increase significantly–and continue to increase as more products are added.
So, an MSP that chooses to sell only backup and disaster recovery (BDR) solutions is at a big disadvantage to an MSP that bundles BDR with network security and other complementary solutions like desktop and mobile management. Not only does the latter MSP gain better protection against churn, it needs fewer total customers than the BDR-only MSP to reach the same revenue goals. As an MSP, you should be tracking how many multi-solution customers you have and set goals around this metric. This will help you focus on growing and strengthening your existing relationship in addition to bringing on new customers.
Whether you are new to selling managed services or have more than a decade of experience, measuring your success and tracking key performance indicators (KPIs) is important. By expanding your view beyond immediate profitability metrics, you’ll put your MSP in a better position to run more smoothly, sustainably and profitably for the long term.
Brian Babineau serves as General Manager, Intronis MSP Solutions, for Barracuda Networks. In this role, he is responsible for the company’s managed services business, a dedicated team focused on enabling partners to easily deliver affordable IT solutions to customers.
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