Running a managed service provider (MSP) business is no small feat. It’s like balancing multiple spinning plates—efficiency, client satisfaction, employee productivity, and, of course, revenue growth. But how do you really know if your efforts are paying off? The answer lies in tracking the right performance metrics.
Without these metrics, you’re essentially flying blind. Metrics empower MSP owners to understand the health of their business, identify weak spots, and make decisions that lead to growth and profitability. Think of them as your business's dashboard—illuminating how each part is performing and where you need to focus your attention.
This guide will walk you through the essential metrics every MSP business owner needs to track, how to effectively collect and analyze them, and how metrics can transform your business planning and decision-making. By the end, you’ll have actionable insights to take your MSP to the next level.
Not all metrics are created equal. Measuring the wrong ones can waste time and provide little value, but focusing on the right ones? That’s where the magic happens. Here are the core metrics that paint a picture of your MSP’s overall health and performance.
Why it matters:
MRR is the backbone of any MSP business. It provides a consistent stream of predictable income that enables better financial planning. On the flip side, churn rate shows how many clients are leaving your service, which directly impacts MRR.
Pro Tip: Aim for upselling and cross-selling strategies to increase MRR while maintaining low churn rates. Happy customers rarely leave!
Why it matters:
How much are you spending to win new clients, and how much revenue does each client bring over their lifetime? Comparing these metrics is crucial to assess whether your marketing and sales strategies are paying off.
Example: If your CAC is $3,000 and your LTV is only $2,500, you’re spending more on acquiring clients than you’re earning from them. Time to optimize your sales funnel!
Why it matters:
Clients don’t just pay for IT services—they pay for peace of mind. SLA metrics track whether you’re delivering on your promises, especially response and resolution times.
Falling behind on SLA commitments can lead to churn and damage your reputation. Track these metrics to maintain high client satisfaction.
Why it matters:
Your employees and clients are your two biggest assets. Employee utilization measures how effectively your technical team’s time is being used, while CSAT reflects customer happiness.
Pro Tip: Strive for a balance—overworked employees lead to burnout, which can affect CSAT scores. Happy employees = happy clients.
Tracking metrics is only half the battle. To truly thrive, you need an effective system for collecting and analyzing data.
There’s no shortage of software designed for tracking MSP metrics. Tools like ConnectWise, BrightGauge, and DataBox offer real-time data dashboards that enable better decision-making.
Look for tools that integrate seamlessly with your existing business management software. Bonus points for software that includes customizable reporting features, so you get insights tailored to your unique needs.
So, you’ve collected your data, but now what? Metrics are much more than numbers on a spreadsheet—they are your blueprint for making informed, strategic decisions.
Metrics reveal patterns that you might otherwise miss. For example:
By identifying these weak spots, you can implement targeted strategies to address them and boost overall performance.
Forget gut instincts or guesswork—data-driven decisions are proven to yield better results. Whether it's setting pricing strategies, allocating resources, or identifying cross-selling opportunities, your metrics arm you with the insights you need to act confidently.
For example, if your CAC is too high, you might revisit your marketing campaigns to focus on organic growth strategies. Or if your LTV is high, but churn is an issue, you might focus your resources on customer retention strategies like loyalty programs or proactive account management.
Tracking metrics isn’t a luxury—it’s a necessity for MSP owners who want to remain competitive and profitable. But where do you start if your metrics are all over the place or you’re not sure which ones to prioritize? That’s where Bering McKinley comes in.
Our expert consultants specialize in helping MSPs just like yours make sense of their data, optimize performance, and grow their businesses. With years of experience guiding MSPs through data-driven decision-making, we offer strategies that deliver measurable results.