5 Metrics MSPs Should Track for a Smooth Sales Operation
It’s true that MSPs need to be metrics-driven if they want to succeed. Without knowing the health indicators of your business, you don’t know what to change. However, it’s possible to get overwhelmed by tracking too many metrics or getting caught up in following vanity metrics, like number of calls made or followers gained on social media. If you’re new to the IT service game, you may not even be sure what to track at all.
Let’s solve that. Here are five key metrics you need to track to make sure your sales engine runs on all cylinders.
1. Net New Appointments
While it’s tempting to check process metrics, like the number of phone calls you make or emails you send, the goal at the end of the day is to get a sit-down with a prospect. Knowing this number is crucial for your sales pipeline.
When you track this, perhaps weekly, you can start figuring out where to shift your efforts. If net new appointments are down, you can increase lead generation and prospecting activities to right the ship.
Once you have your foot in the door with net new appointments, you’ll need to track how successful those appointments were. That’s where the proposal metric comes into play. Track how many proposals you send per month after your appointments—if you’re not sending enough, consider what you need to change to reach the proposal stage more often.
3. Proposal Success Percentage
Your number of proposal “at bats” matters, but so does your “batting average.” This data can tell you a lot. If the numbers go up each month, you can take fewer appointments and still grow your business. If your numbers seem to go down, you need to diagnose what went wrong—such as a change in market demand, pricing issues, or perhaps a slip in proposal quality.
Additionally, if you’re starting out and you’re coming from a more technical perspective, you may not be particularly adept at writing proposals. (Who would be?) In this case, picking up a book on proposal writing or taking a course might help.
4. Average Deal Size
Whether you want to grow or stay around your current revenue level, tracking your average deal size tells you whether or not you’re on track. It can also give you a good sense of which prospects provide the largest paychecks to your company. This can guide your prospecting efforts and suggest a niche, if you’re so inclined.
Increasing your average deal size might not entirely come down to the customer—you might want to offer additional services like managed security or managed backup to boost your average deal size. However, it’s important to consider these changes in the context of the other metrics. For example, if you land bigger deals, but your win percentage on proposals plummets, you either have to drop the service or change the way you frame it in proposals.
5. Time to Close
In general, you want to try to reduce the length of time between your first bid and your closes. Any number of variables could affect this—your proposals may not be persuasive enough, your prices could be off, or your clients in a specific industry may have a longer buying cycle. However, tracking this metric can also be helpful in trying to forecast your revenue and how far ahead you need to start booking work.
Where Do You Stand?
While it may seem tempting to track everything, it’s important to focus on a few key metrics for your business. You might be wondering at this point what sort of benchmarks you should set for each of these metrics. Stay tuned—we’ll cover some ballpark estimates in our next post.
Eric Anthony is Sales Engineer Manager at SolarWinds MSP. Before joining SolarWinds Eric ran his own managed service provider business for over six years. You can follow Eric on Twitter at @EricAnthonyMSP.
This guest blog is part of a Channel Futures sponsorship.