Five Ways to Measure Your Company's SuccessFive Ways to Measure Your Company's Success
As a solution provider, how do you measure the success of your business? Is it purely on revenue growth? Is it tied to overall profit margins? Is it on customer satisfaction and retention? How about breaking into emerging technologies? Is it employee loyalty and providing a secure and opportunistic work environment?
February 15, 2013
elliot markowitzAs a solution provider, how do you measure the success of your business? Is it purely on revenue growth? Is it tied to overall profit margins? Is it on customer satisfaction and retention? How about breaking into emerging technologies? Is it employee loyalty and providing a secure and opportunistic work environment?
Well, Penton Media, which publishes The VAR Guy, just released its MSPmentor 501 report, gathering data on a global basis and recognizing top MSPs in a variety of categories including: international; small and medium businesses; North America; Europe, Middle East and Africa; and Asia, Australia and New Zealand. It is a comprehensive survey and tremendous undertaking, to say the least, taking into account managed services revenue growth, revenue per employee, managed services offered and customer devices managed.
But there are many successful solution providers and managed service providers that didn’t make these list. Are you one of them? It all comes down to how you measure success. Here are five areas every solution provider should evaluate and consider:
1: Right Revenue Growth
What is right revenue growth? It’s simple, really. First, is your company’s revenue increasing year over year? If so, in what areas? Today’s solution provider should be focusing on growing revenues in recurring ways across managed services, cloud and hosting environments and less on hardware and software installation and support. They also should be building expertise around growing IT trends such as mobile device management, telecom integration, cybersecurity and disaster recovery/business continuity. Not all sales are healthy sales and your business model should be migrating constantly and capitalizing on managed services and solid reoccurring revenue streams.
2: Walk Away from Bad Business
I’ve spoken with many solution providers over the years that just can’t seem to shake some bad business relationships. A solution provider’s business needs to be based on trust and a deep understanding of the customer’s operations and goals. It also should be profitable. I hate to say it, but sometimes you need to fire your customer. Some customers can be a huge time-suck and nickel and dime you to death. Your business with them doesn’t grow and you seem to be reacting to the crises of the day and always justifying billing. Walking away from bad, low-margin, high-needs customers is sometimes a wise business decision to focus on healthier and more profitable relationships that grow your business. Bad customers also can be a morale-buster and cause internal problems. VARs should evaluate their customer list yearly and determine if there is business that is prohibiting growth.
3: Customer Retention
A good way to measure your company’s success, even if it may not be growing at the clip you envisioned, is to take a look at your customer satisfaction levels and whether you are getting renewed and more business from core accounts. By nature, a solution provider’s role is to help other businesses, and that is extremely rewarding and valuable if you are retaining your core customer base every year and aren’t losing accounts. Revenue growth will come if you are doing a good job of taking care of your existing accounts.
4: Develop Strong Partnerships
I don’t know of one successful solution provider that always goes it alone and can be all things to all customers. Strategic partnerships is a cornerstone of successful solution providers’ business and being able to play nice in the sandbox with other service organizations to solve their customers’ needs is critical. Being able to partner with other organizations—whether they be a telecom reseller, hosting company, security or data center expert—is a true measure of a successfully run business. Solution providers need to check their egos at the door and realize that bringing in outside expertise actually strengthens their customer relationships, not jeopardizes them. Look to partner. And if you don’t know where to start, attend industry conferences and begin networking.
5: Create Employee Opportunities
Business is business, but it can’t be all about money. Most solution providers are small-business owners themselves. Their employees are usually like an extended family. To be successful you need to invest in your employees and they will be loyal back. Send them to training and education courses frequently, and be sensitive to both their professional aspirations and personal priorities. Invest in them and they will take care of your business as if it is their own. No customer likes to deal with a revolving door of professionals. Take a look at your employees and see if you are creating opportunities for them. If you are, you are a success and your top line will show it.
How many of these criteria are on your list?
Knock em alive!
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