There’s a lot of noise about measurement, accountability and using data to make better business decisions. Everyone has a theory about how you should be doing it, and this varies 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?”
To help make data-driven decision making easier for you, we’ve put together a list of KPIs that every MSP should be tracking with their PSA tool to ensure their business's success.
- Profitability: First, you need to know exactly where you are making money and where you are losing it. This is especially important for managed services contracts because underlying costs can significantly impact your profitability. Profitability should be examined by breaking it down at the client, contact and service levels. To gain an accurate understanding of profitability, start by identifying your current revenue stream and possible losses.
- Customer Satisfaction Score: Customer satisfaction, also known as CSAT, is the measure of knowing if your clients are satisfied with the services you deliver, but also an indication of how likely they are to recommend you. CSAT scores 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. This measure gives you the opportunity to take action immediately when client relationships are at risk.
- First Call Resolution: The ability to meet promised response and resolution timeframes defined within your Service-Level Agreements (SLAs) is crucial, but 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. FCR can also be a great indicator for customer satisfaction and keeping a close eye on FCR helps MSPs meet client expectations and deliver great service in a timely manner.
- 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.
- Resource Utilization: There are three main aspects to look at when measuring resource utilization: performance vs. projections, resource scheduling, and visibility into underlying costs. When addressing performance vs. projections, MSPs should have a general understanding of how much time it will take to complete common services, such as new employee onboarding. This 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 is the first step to securing the environment.
- Contract Renewal: To prevent churn, you’ll need to know ahead of time when your contracts are up for renewal. In an MSP’s world, the longer the contract the better. The longer a customer is locked into a contract, the better the MSP can forecast. Additionally, if mergers or acquisitions (M&A) are of any interest to the MSP, longer contracts allow them to demonstrate future bookings, which helps boost the company’s valuation.
- Project Status: How you deliver projects is core to your service portfolio. Track projects to determine which ones are behind or ahead of schedule. Prioritize tasks that are due this week and uncover which projects are at risk, so you can proactively address issues and get things back on track quickly.
- Sales Pipeline: While a forecast offers a short-term view, like what deals are likely to close in the next few months, a pipeline offers the overall view of all opportunities that are still at play at various stages of the buying cycle. Be sure to aim for a 4X pipeline for each dollar you spend in order to be profitable in your forecast. Why forecast like this? Only one in four opportunities is likely to close.
- Sales Conversion: 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. Comparing the primary reasons why you won or lost an opportunity over a period of time can help you identify the strengths and weaknesses in your sales efforts.